Why NFTs Need a Scalable Storage Solution

A non-fungible token (NFT) is a physical or digital asset recorded on the blockchain.

In 2022, an estimated four percent of Americans (9.3 million people) said they own NFTs– a 100% increase from 2021 shows that NFT ownership is rising.

As ownership continues to increase, so will the demand for scalable storage solutions. Many of the current storage solutions lack scalability, which limits how many NFTs people can own- particularly if they have larger collections.

In this article, we’ll cover four different storage solutions, which are the most scalable, and the benefits and challenges of each. 

Let’s get started. 

Software Wallets- MetaMask

MetaMask was launched in 2016 by Consensys, a blockchain software technology company based in New York City. It’s the most popular decentralized wallet in the world, with around 21 million monthly active users. 

Although the wallet was created for cryptocurrency, MetaMask is also popular for buying and storing NFTs. It lets users store and manage their private and public keys, connect to decentralized exchanges such as UniSwap and PancakeSwap, and buy and sell NFTs. 

MetaMask is relatively friendly for new investors and can be installed through the Google Store. MetaMask also has an in-depth FAQ Page for investors who want to learn more about the wallet, how to trade cryptocurrency, and how to store NFTs. 

MetaMask is consistently connected to a decentralized ledger and, in theory, shouldn’t have any issues regarding scalability on the backend. As long as the blockchain is scalable, operations between the wallet and the blockchain should be scalable too. 

The only area where MetaMask falls short is when it comes to security. MetaMask is constantly online and, as a result, can never be as secure as hardware wallets (which we’ll cover below.) Though MetaMask has never been hacked, its users have been prone to phishing scams, including one that cost a wallet holder $650,000 after believing they were giving their details to an Apple employee.

Other popular hardware wallets for NFTs include Math Wallet, Coinbase Wallet, and Trust Wallet, which Binance owns. However, for decentralized NFT storage, MetaMask remains the best option. 

Hardware Wallets

Hardware wallets are the most secure option for NFT storage as all digital assets are stored offline- making them impossible to hack. This makes hardware wallets a great option for collectors who want to store their NFTs for the long run. 

The most popular hardware wallets are Ledger and Trezor, which will cost anywhere from $80 to $300+ for the latest models. Once an NFT has been stored in the wallet and the wallet unplugged, nobody can transfer the data to or from the hardware wallet. When you buy a hardware wallet, you’ll also be provided with a secret phrase of 12 words and can set additional passwords if you want even more security. 

However, there are two downsides to hardware wallets. Firstly, if you lose your wallet, you lose your assets. For example, in 2013, James Howells threw away a wallet with 7500 Bitcoins (around $56 million.) He was refused access to the landfill where it was and, as a result, lost his millions. As of September 2022, Howells hasn’t managed to retrieve his wallet.

The other downside to Hardware Wallets is that they’re not scalable. They’re limited to the spec of the wallet you’ve purchased, which could impact NFT storage as NFT files begin to demand more storage space. 

Nonetheless, hardware wallets are the perfect option for collectors planning to make long-term NFT investments. 

InterPlanetary File System

InterPlanetary File System (IPFS) is a relatively new way to store NFTs. It’s an open-source project founded by Protocol Labs and was originally designed for storing and accessing websites, apps, files, and other data. 

With IPFS, users’ NFTs are stored off-chain through platforms like Pinata, significantly reducing the likelihood of their assets being stolen. It also uses content identifiers (CIDs), which are broken down aspects of your data linked directly to your NFT. Instead of your NFT data being stored through an HTTP link, your data is broken down across several storage solutions; this way, if one fails, a different solution backs up your data. 

IPFS solutions are also highly scalable. Additional nodes can always be added to deal with additional data, which means users will never have any problems with storage. 

The only downside is the technology is still somewhat in its early phase and technically wasn’t created for NFTs. This means that although it has a lot of potential, it hasn’t been in the market long enough to be tested.

BitKeep

BitKeep is Asia’s most popular NFT storage method, with over 6 million users, 70 mainnets, and 220,000 supported crypto assets. Much like MetaMask, you can download the BitKeep wallet through the Google Store and use it to store NFTs. 

However, unlike MetaMask, BitKeep has its own NFT store. The store has launched projects such as Kaju Legends and OutSad, and lets users buy other collections such as Bored Ape Yacht Club (BAYC.) 

BitKeep also has a comprehensive education center, where new collectors can learn how to trade NFTs, sell them, and use the BitKeep wallet. BitKeep is connected to a decentralized ledger and shouldn’t have any problems with scalability. It’s only limited by the scalability of the blockchain. 

Final Thoughts: Are Scalable Storage Solutions a Must Have?

As the NFT market grows in popularity, scalable storage solutions will become important for larger collections. However, for the average NFT investor, hardware wallets should be more than enough for a small NFT collection. 

These wallets are a great way for collectors to store their NFTs if they have no plans to sell them. Both software wallets and IPFS are also great ways for collectors to get involved in the industry and offer scalable storage options for larger collections. 

The best option for you will depend entirely on your preferences. 

How to Display NFT Art (In Real Life & Online)

NFTs are digital art pieces stored on the blockchain. They can be bought and sold online in NFT marketplaces such as OpenSea or minted directly from a project’s contract. 

Throughout 2021 the NFT market took off, with total sales reaching over $14 billion and art pieces such as The Merge selling for $91.8 million.

Many of these art pieces were showcased on social media profiles, with some art making it to decentralized metaverses such as Decentraland.

NFTs have now made it to the real world, showcased in museums such as the Picasso museum in Barcelona and in real-world homes through innovative digital frames.

This article will cover displaying your NFT art, including real-life and online display methods. 

How To Display NFTs in Real Life

Although NFTs are primarily an online technology, there are several ways you can showcase your digital art without needing the internet. Here are four of the most popular options. 

Digital Frames

Photo frames have always been used to showcase family photos and art. Now digital frames are changing the way we display NFTs. Innovative new frames are used to bring NFTs to life in your home.

For example, the Infinite Objects “Video Print” frame features video NFTs on loop in your home. They’re available as 5” and 7” displays and don’t require any apps or additional software to work. 

Another example is NetGear’s Meural Canvas, available as a 13.5” x 7.5” frame and a gallery-sized 19” x 29” canvas. Owners can download Netlink’s proprietary Meural app for iOS or Android, add their NFT images or videos to the frame, and showcase them around their homes.

Physical Prints with QR Codes

Collector Andrew Coathup first used this innovative NFT concept. It’s when a collector prints off the image of the NFT alongside a custom art label- similar to many of the art pieces in modern art museums. 

Labels include everything from the title of the NFT, the collection from when it was purchased, and a QR code that opens an information page about the NFT on OpenSea (or the platform the NFT was purchased from.) 

This solution is cheaper than digital frames and appeals to collectors who want to combine classical displays with modern art. 

Looking Glass Holograms

Looking Glass Holograms are an exciting new way to showcase 3D NFTs. These holograms are futuristic for displaying NFTs, letting users show holographic videos and 3D characters. Options include the Looking Glass Portrait, Looking Glass 4K Gen2, and Looking Glass 8K Gen2, with prices starting at $399. 

TV Display

This option is for collectors who want to combine their NFTs with their love for TV. With the Samsung QLED 4K Smart TV, you can showcase your NFTs when the TV is off. When the TV is on, it works like any other TV, but when switched off, it works as a digital frame for your NFTs.

The TV resembles a sizeable digital frame and works perfectly with the rest of your decor. It has an “Art Mode,” which uses motion sensors to showcase art when someone is in the room. It then turns off when nobody is around to save energy. 

How To Display NFTs Online

With NFTs primarily being online pieces of art, most display options are currently online. Here are three of the primary options for displaying your NFTs online. 

NFT Galleries

The most popular option for displaying NFT art is through online galleries. Galleries and marketplaces such as OpenSea and Lazy let NFT owners put their NFTs on display without charging them. These displays work similarly to an Instagram page and usually include social media features for owners to share their collections with a broader audience. 

The Metaverse

Despite being in its early phase, the Metaverse has quickly become a popular option for NFT collectors to showcase their collections. Virtual worlds such as Decentraland let users create huge digital art galleries displaying their own and other collectors’ NFTs. 

Another famous virtual world is Cryptovoxels. Built on the Ethereum blockchain, Cryptovoxels is a simpler version of Decentraland that loads faster and is more accessible to NFT collectors with less advanced computers. Despite being less popular than Decentraland, Cryptovoxels has become home to many NFT collections, with exhibits throughout the digital world.

Social Media

If you own a Twitter account, you can almost guarantee that you’ve seen an NFT used as a profile picture. Twitter is a popular social media platform to flex NFTs and is commonly used by collectors to network with people who own an NFT in the same collection. 

Social media has been used by celebrities such as Justin Bieber, Snoop Dogg, Paris Hilton, and Eminem, who have used NFTs as their profile pictures on both Twitter and Instagram. Meta has also announced that it will soon release a feature where users can showcase and sell their NFTs through Instagram, creating a new digital art marketplace. 

In addition to the classic social media platforms, new platforms are being designed to showcase NFTs. For example, Showtime has slowly become the first NFT-driven social network. Users can connect their crypto wallets to the site, and Showtime will automatically generate a profile featuring all the NFTs you hold. 

Closing Thoughts: Have NFTs Become The New Modern Art?

As NFTs continue to grow in popularity, we may start seeing them in homes worldwide. But do they have the power to replace modern art?

When showcasing your NFTs, you have several options for displaying them in your home. However, that doesn’t necessarily mean you will. NFTs remain somewhat niche, with only hardcore collectors showing them around the house. Most people still don’t know what an NFT is or how it works, so it may be a while before we see them replace modern art. 

Despite this, NFTs have become a popular part of creating your online avatar, and as use cases grow, the number of ways you can display NFT art both in real life and online will grow too. 

How Permanent NFT Storage Can Prevent Disaster

A permanent NFT storage combines blockchains and InterPlanetary File System (IPFS) designed to create a secure place to hold NFTs. 

Throughout 2021 NFTs (non-fungible tokens) became popular assets, with projects such as Bored Ape Yacht Club (BAYC) and Cryptopunks making headlines for their large price tags. 

At the same time, NFT scams and theft also reached an all-time high, with over $100 million worth of NFTs stolen since July 2021. Due to the decentralized nature of cryptocurrency, most investors never had their NFTs returned and lost their investments. 

As the market continues to develop, new ways of protecting NFTs are being created. One such way is permanent NFT storage, which combines two leading storage methods to protect users from theft and scams. 

In this article, we’ll cover why it’s important to properly store NFTs, the different storage types, what is permanent NFT Storage and how it can save you from an investment disaster. 

Why Should You Properly Store NFTs?

With any piece of art, storage is extremely important. In the past, art collectors would pay upwards of $100,000 a month for their art to be secured. With NFTs, things are a little different. 

Some NFT platforms will allow you to store your NFTs inside their built-in wallets, while others will let you store NFTs in your external wallet, such as MetaMask. However, storing with a platform isn’t always safe. 

In March 2021, hackers stole thousands of assets from accounts held by Nifty Gateway. Although the company’s security wasn’t compromised, hackers used a lack of two-factor authentication to their advantage, using users’ credentials to steal assets. 

This made investors realize how important it is to use your own storage and not rely on third parties. Instead, NFT investors need to take full ownership of their assets. 

What Storage Types Are Available?

Online Storage

Currently, most NFT collectors store their NFTs using blockchain-based storage solutions such as MetaMask and OpenSea. These are completely decentralized and secure, giving owners full ownership of their assets. 

However, it’s important to note that these wallets don’t technically hold your NFTs. Instead, they provide you with a private key that gives you access to them on the blockchain. With this key, you own a cryptographic address and everything in it. 

Nonetheless, this storage method can still be hacked as it’s online 24/7.

Offline Solutions

Offline solutions are an extremely secure way to store NFTs. As they’re not connected to the internet, they’re less prone to cyber-attacks, digital scams, and unauthorized access. The most popular offline storage solution is a hardware wallet such as Trezor or Ledger. NFTs can be stored in these wallets offline and require an ID and password for extra security. 

The only downside is if you lose the physical wallet, you’ve lost your assets. 

What Is IPFS?

InterPlanetary File System (IPFS) is an open-source project created by Protocol labs. It’s used for storing and accessing websites, files, apps, and data; however, it has the potential to impact the way we store NFTs. Currently, IPFS works by breaking down data across different storage solutions, so if one should fail, the data will be backed up elsewhere. 

Platforms such as Pinata and Filecoin combine the benefits of blockchain storage with IPFS to create a permanent storage solution. This solution is designed so NFTs can’t be lost, even if the marketplace where they are stored goes down. 

It removes all external dependencies while providing decentralized storage solutions for NFTs. But, the technology still has some flaws. If an NFT has been sold independently (outside of a platform) and the owner chooses to stop providing the NFT data, the NFT will disappear. 

However, on-chain solutions are being designed to fix this problem. Marketplaces such as Pastel are implementing native storage solutions where assets will always be fully recoverable. Pastel Network uses its Cascade protocol for this, helping recover all NFT data if anything is ever lost. It breaks up NFT data into chunks and distributes it amongst a network of SuperNodes. This means if any nodes go down, NFTs are always recoverable. 

Why Permanent Storage Is Important

As NFT sales continue to grow, a secure way for everyday investors to store their assets is essential. In the current market, NFTs are continuously missing, with scams rising. 

In November and December 2021 alone, over $30 million in NFTs had been lost due to rug pulls and scams. For the market to continue to thrive, users need peace of mind that their assets aren’t going to go missing. If scams continue to increase, the NFT market will have difficulty attracting new investors, significantly slowing the widespread adoption of these digital assets. 

Permanent storage solutions provide investors with a much better storage solution than any available on the market. One where data is broken down across nodes to prevent theft and scams. 

Final Thoughts: Is Permanent Storage The Future For NFTs?

Although IPFS technically isn’t designed solely for NFTs, it’s being integrated by projects like Pinata to provide users with a security solution that’s easy to use and completely safe from digital threats. 

As the technology continues to develop, it’s fair to assume that permanent storage solutions, or similar technology, will be the future of NFT storage should widespread adoption occur. 

Despite still being an early development, permanent storage gives investors peace of mind that their assets are completely safe, even if there’s an issue with nodes. In the current market, no other storage solutions provide this level of safety, making it a no-brainer for NFT collectors worldwide. 

On-Chain Vs. Off-Chain NFTs Explained

Non-fungible tokens (NFTs) are digital or physical assets recorded on the blockchain. They can be sent from one individual to another, used in video games, or held in cryptocurrency wallets as an asset. 

On-chain NFTs refer to tokens written solely on the blockchain, with all metadata and smart contracts being stored on-chain. On the other hand, off-chain NFTs store their smart contracts on the blockchain, though their media is stored off-chain. 

Both methods have their pros and cons, though on-chain NFTs are the trending option in the industry. 

This guide will explain both on-chain and off-chain NFTs, their pros and cons, and how you can distinguish between them online. 

What Are On-Chain NFTs?

On-chain NFTs are both written and stored on the blockchain. Their information is written on the mainnet (the primary public Ethereum production blockchain), then stored on the blockchain. It includes data such as the hashtag of the generated NFT, metadata, and smart contracts. 

Smart contracts are self-executing programs that react when certain criteria have been met- for example, a certain payment has been made. They’re native to the Ethereum blockchain and can be used to generate on-chain NFTs. 

Metadata refers to the core information of a particular NFT. This includes its unique traits, the NFT description, and where it’s stored. All metadata is stored on-chain with the NFT. 

What Are Off-Chain NFTs?

Off-chain NFTs host their smart contracts on the blockchain, but their media is off-chain. Instead, the data is stored on cloud servers such as Dropbox, Google Drive, or IPFS (interplanetary file system) nodes. 

IPFS is a web data protocol designed to solve the problems of Hypertext Transfer Protocol (HTTP) and File Transfer Protocol (FTP), both of which are the foundation of the internet. When searching for an HTTP or FTP system, we search for its location. We then connect to this to access the file for viewing or downloading. 

However, if the server goes down or the cloud is no longer operating, the link will break, and access to the file will be removed. IPFS is looking for ways to fix this by hosting such files across several nodes, meaning it no longer relies on a single server. 

Some off-chain NFT projects run their own IPFS nodes, whereas others use commercial IPFS nodes such as NFT Storage or Pinata. Storing NFTs off-chain can reduce gas fees during transactions; however, only the smart contract data is used whenever a transaction occurs, and not the data for the NFT media as its off-chain. 

This creates several problems, which we’ll go into below. 

One of these problems, however, is somewhat resolved by IPFS. With any centralized server or storage, the owner can shut down the storage anytime, meaning investors lose their NFTs. IPFS overcomes this by distributing the NFT data across several servers. If one storage location fails, it will be backed up to another. 

Pros & Cons of On-Chain NFTs

Pros

Reliable Storage

With on-chain NFTs, your metadata, smart contract, and NFT are all stored on the blockchain. This means you don’t need to rely on third-party or external systems for your NFT to exist. As long as the blockchain is functioning as it should, your NFT collection will always be available. 

Greater Liquidity 

NFTs on the blockchain are also technically more valuable. All on-chain tokens meet Ethereum network requirements and therefore have greater liquidity. They can be transferred easily, which makes investing in them a better option for traders looking to profit from NFT collections. 

Cons

Complex For New Investors

Even though being on the blockchain is a benefit, it can also be a little complex for investors without experience in the blockchain market. Complex terminology may turn away many new investors, significantly slowing widespread adoption. 

Pros & Cons of Off-Chain NFTs

Pros

No Need For Blockchain Experience 

Investors who want to buy off-chain NFTs don’t need much blockchain experience. They can bid for NFTs with fiat currency, avoiding gas fees and complex crypto bidding systems. On off-chain platforms, investors don’t need a crypto wallet for their NFTs. For example, Top Shot investors leave their Moments in a custodial wallet managed by Top Shot. 

No Gas Fees

Every NFT investor knows the pain of gas fees. They fluctuate dramatically daily, with some transactions costing over $100 in fees alone. Off-chain NFT transactions remove these fees, making it cheaper to buy and own NFTs. 

Cons

Security 

As off-chain NFTs store their data offline, smart contracts are only used to link individuals to the storage location of their NFTs. If there’s ever a problem with the off-chain network, the link itself will be useless, and the NFT will no longer be available. 

IPFS Flaws

IPFS helps to overcome some security problems with off-chain NFTs; however, the NFT creator still has the power to delete the NFT file. By doing this, they break the link between the file and the blockchain. This means the NFT still exists on the blockchain; however, owners won’t have access to it. It’s similar to owning a jar of air. You own it, but it technically doesn’t exist. 

How do I see if an NFT is Off-Chain?

To check if an NFT is on-chain or off-chain, you’ll need access to MetaMask, OpenSea, and Etherscan. 

For MetaMask, open your wallet and click on “NFTs”. If you don’t see this option, check out how to toggle NFT visibility on MetaMask. Select the NFT you want to review and click the link opposite “Asset Contract.” You’ll automatically be taken to Etherscan.

For OpenSea, open the webpage for the NFT you want to review and click on the “Details” section. This will take you to Etherscan.

Once you’ve opened Etherscan, head to the “Contract” tab below the “Contract Overview” box. 

Click “Read Contract” from here and scroll to “tokenURI.” This will create a dropdown box where you can enter the token ID. This can be found in the name of your NFT. 

If a link appears, the artwork is stored off-chain. 

Final Thoughts: Which NFT Option Is Better?

Both on-chain and off-chain NFTs have several pros and cons, and the better option will depend on your personal preferences. 

While on-chain NFTs are the easier option for storage and trading, understanding blockchain technology is required to get started. 

On the other hand, off-chain NFTs are easier for new investors, though they lack the security of their on-chain alternatives. 

If on-chain NFTs can appeal to new investors and reduce the fees associated with trading, they may become the more popular option in the future. However, personal preference and research should always guide your investment decisions. 

The Story of Cryptopunk #9998: Did It Really Sell for $532 Million?

CryptoPunk #9998 is part of the CryptoPunks NFT collection with wild white hair, green clown eyes, and black lipstick. Its features make it one of the rarest Cryptopunks available. 

The collection was originally launched in June 2017 by Larva Labs, and was free to collect for anyone interested with an ETH wallet. There are 10,000 Punks in total, each with its distinct characteristics, with no two being the same. 

Though initially free, the collection became one of the most popular in the NFT space, with an all-time trading volume of 515,220.24 ETH and half of the top 10 NFTs sold as Punks.  

CryptoPunk #9998 is one of many Punks to make headlines, though its story isn’t all it appeared to be. Initial headlines stated that the NFT sold for half a billion dollars, though the money from the trade ended up where it started. 

Here’s the story of CryptoPunk #9998. 

What Happened To CryptoPunk #9998?

We need to go back to the initial transaction to understand the story. CryptoPunk #9998 was initially transferred from a cryptocurrency wallet starting with 0xef76 to a wallet starting with 0x8e39. 

The transfer was made for 124,457 ETH, equal to around half a billion USD at the time, making it the most expensive artwork in all historical records. Before this, the most expensive CryptoPunk was CryptoPunk #7523, which sold for $11.8 million.

The transaction quickly made headlines; however, the Punk was soon sent from 0x8e39 to a wallet address starting with 0x9b5a- which headlines didn’t pick up on. 

When looking at the transactions, it was clear that the transaction was an example of wash trading- when an investor simultaneously sells and buys the same financial instruments to create misleading activity in the marketplace. The initial transaction was made with a loan sent to a smart contract and transferred to the seller. The seller then sent 124,457 ETH to the buyer, who repaid the loans. After the transaction, an NFT collector made an offer of 250,000 ETH for the NFT.

Despite the transaction being legit, they were made to create hype around the NFT market and further drive the price of CryptoPunks. CryptoPunk #9998 was technically never sold; a mix of transactions were just made between addresses. Larva Labs later made a statement about the transaction, stating that notifications would be removed for them in the future. 

As of September 2022, nobody can bid on the asset, which means CryptoPunk #9998 technically isn’t the most expensive NFT ever sold, nor the most expensive Punk, which is  CryptoPunk #5822, selling for $23.7 million.

How Is Wash Trading Used In The NFT Market?

Wash trading is when a trader buys and sells an NFT to create hype and false information about a particular project or market. Though this type of trading occurs in traditional markets, the NFT market is particularly prone to such techniques, with projects such as Shiba Inu being created on hype alone. 

Wash trading frequently creates fear of missing out (FOMO), which pressures new and inexperienced NFT collectors to buy from projects that are either a scam or have little to no potential to bring a return on their investment. In the NFT market, the definition includes the purchase of an NFT for external reasons (such as an influencer buying to hype up a project, only to sell when the value increases.) 

Although there are no exact figures, wash trading has hugely impacted the industry, creating a sense of skepticism for new investors prone to scams. However, this is also having a somewhat beneficial impact. 

With so many scams and fake information in the market, NFT projects are forced to be transparent with the owners. To maintain a good reputation, they need to clearly state their real transactions, provide utility for investors, and have a long-term roadmap to show investors what they’re getting for their money. If they fail to do so, their projects will fail in a more educated NFT market.

A report by blockchain analyst firm, Nansen, found that a similar practice is occurring with the release of new cryptocurrencies. The founders of many new projects hold a large percentage of their tokens while hyping the project. Once the project increases in value, they sell their stake and take their profits. This process is also known as a rug pull. As of September 2022, an estimated $25 billion has been lost to cryptocurrency, and NFT rug pulls and scams.

CryptoPunks Continue To Break Records

Despite the somewhat confusing sale of CryptoPunk #9998, CryptoPunks continue to break NFT records. The collection has a market cap of around $2 billion, with a floor price of 61.95 ETH ($108,487.46), making it the most valuable worldwide. 

As of September 2022, the most expensive CryptoPunk is CryptoPunk #5822, which sold for $23.7 million in February 2022 to Deepak Thapiyal. It’s one of nine alien Punks. 

Despite the market for NFTs slowing throughout 2022, CryptoPunks has remained the most popular collection, with owners having a somewhat celebrity status amongst NFT holders. 

Final Thoughts: Can Wash Trading Impact CryptoPunks?

The story of Cryptopunk #9998 was a clear example of how the NFT market can be manipulated by headlines and hype. Despite being frowned upon by Larva Labs, similar stories have been used by other NFT collections to falsely promote projects with little to no utility. 

Although this will impact the crypto market as a whole, newer projects will suffer as a result. Projects such as CryptoPunks already have the reputation to thrive and are less likely to be influenced by the skepticism caused by wash trading. 

Nonetheless, stories such as Cryptopunk #9998 are a great way to spread awareness of wash trading, using their leverage to educate new cryptocurrency and NFT investors and reduce the risk and impact of scams.