Although the majority of NFTs are stored on IPFS, it’s not as safe as you think.

Let’s look at how NFTs store their image and which collections should be concerned. 🧵

Blockchains are not designed for storing large image files. That will be very expensive in comparison to centralized hosting services like AWS and Google Cloud.

Contracts, transactions, account balance, and other information are among the things they are designed to store.

What NFTs(Which is a contract) actually store are just links. The link can contain an image file or metadata. Metadata is data that provides information about other data.

So if the link is pointing somewhere empty. Your precious NFT could turn into this 👇

You can check this link at Etherscan.

In any NFT (ERC-721) contract page, go to “Contract” tab, click the “Read Contract” button, you’ll see the “tokenURI” function. Put a token number there, then the link will appear as seen below.

This one doesn't look decentralized enough🤔

And if you access that link, you’ll either see an image or metadata in JSON format.

CloneX’s link is pointing to Metadata as seen below. This Metadata should include an image link that leads to the image file.

It seems like the image is in a centralized database as well.

You can also check this information in OpenSea by clicking the Token ID number.

I discovered that the majority of NFTs are using IPFS links after looking into the TOP 100 most traded NFT collections on Ethereum. And 27% were in the hands of centralized databases.

So what is IPFS? Are they safe?

IPFS is a scheme to name a file with a unique hash, then allow a peer-to-peer network to find the nearest copy of the file with that hash. It works similar like BitTorrent.

So in this analogy an NFT is just a wrapper for a torrent file.

IPFS only functions as a long-term data storage option if someone, somewhere, and at any given moment, is online and hosting the data.

So the files are only retained if somebody found them valuable enough to store a copy.

It’s decentralised, but not an ultimate solution.

So what happens if no one is hosting the image?

There’s an NFT project launched in 2018 but not maintained anymore.

It’s dragoneth.com

Just look at how the images are not rendering anymore.

So we have to be careful about this when purchasing an NFT.

Otherdeed was stored in assets.otherside.xyz
RENGA -> nfts.renga.app
Cool Pets -> metadata.coolcatsnft.com
VeeFriends -> cdn.veefriends.com

The complete list for TOP 100

The gold standard should be on-chain storage for sure and it should be taken into account for any data that is small enough to allow it.

But If on-chain storage is not an option, distributed storage systems should be considered. And we should check this before we buy an NFT.