Over the last few months, the non-fungible token (NFT) space has heated up and NFTs have become a topical conversation in the cryptocurrency community. Many supporters believe that NFTs are going to be huge and transform everything from the art industry to online gaming. Others believe that NFTs are completely worthless and nothing more than the hype seen during the initial coin offering (ICO) phase in 2017.
Non-Fungible Token Assets and Reliable Immutability
Data shows that to-date, more than 5.3 million non-fungible token (NFT) asset sales have been recorded on nonfungible.com’s market history. Out of all these sales, artists, blockchain firms, and NFT dealers have sold $414.5 million worth of NFTs. Out of all 5.3 million sales recorded on nonfungible.com’s list, NFTs sell for an average of $76 per unit.
Furthermore, NFTs have gathered mainstream attention and on March 11, 2021, the popular NFT artist, Beeple, sold his work at the world-famous Christie’s auction house. The Christie’s online auction 20447 dubbed “Beeple: Everydays- The First 5000 Days,” saw the artwork sell for a staggering $69.3 million.
It seems that every day, a new NFT project is being released and a new celebrity endorses their own non-fungible token collectibles. Many crypto supporters believe NFTs will be a transformative idea that will shake up a number of industries like art, music, and online games.
Meanwhile, NFT’s are not popular with everyone, and the hype is getting a lot of online criticism these days. For instance, when Jack Dorsey endorsed the NFT application called Valuables, which was created by a startup called Cent it caused a stir. The Valuables platform allows people to purchase a digital certificate of a tweet and sell it on the open market for ethereum.
But the Valuables concept came with immense scrutiny and controversy. “What happens if you buy someone’s tweet and then they delete it?” software developer Jameson Lopp said after it launched. Following this criticism from Lopp and many others, the Twitter account dubbed @slvtrmndi proved that this could happen.
The very next day, Dennison Bertram from withtally.com explained how he created some NFTs stored on the Interplanetary File System (IPFS) and they eventually vanished.
“Fun fact,” Bertram said. “I minted NFTs a few years back for my hybrid metapunks,” he explained. “I stored them in IPFS. I still have them. Because I also stored them on AWS S3. All the IPFS versions have disappeared,” he added.
Bitcoin solved double spend, NFT reinvented it.
— Paul McKellar (@pm) March 9, 2021
Additionally, the recent Banksy burning NFT transformation had also sparked controversy earlier this week. In an email to news.Bitcoin.com, the cofounder of myartbroker.com, Joey Syer, said the burned Banksy NFT sale raises the idea that “the only morons in this transaction are the buyers and stunt artists themselves.”
Syer also insisted that the Banksy NFT was no different than swiping a free copy (jpg or png image) from the open web. “You could right-click on the same image that floods the internet and have your very own version for free,” Syer scathed.
‘Pulling the Rug’ – Creator Hosting NFTs on Opensea Changes the Images
Following the Banksy NFT critique and the controversial debates about selling NFT tweets, the Twitter account @neitherconfirm explained to his followers that he pulled an NFT rug trick this week. He simply swapped the images he had listed on Opensea for images of oriental rugs after the fact the NFTs were minted.
“I just pulled the rug at my NFT collection on Opensea,” he tweeted. “Nobody got hurt. It is pretty easy to change the jpg, even if it does not belong to me or it is on auction. I am the artist, my decision, right? A thread from somebody making his living with art irl about the value of NFTs. All discussions about the value of NFTs are meaningless as long as the token is not inseparable from the artwork itself,” the NFT artist @neitherconfirm wrote.
The Twitter account @neitherconfirm added:
I [have been] in Bitcoin since 2014. My 9-5 is making sculptural art. For more than a decade I worked with a large team for one of the top selling artists worldwide. Some artworks we produce are selling in the double digit millions. With every work of art we sell comes a certificate of authenticity. The paper without the artwork is worthless. The artwork without the certificate remains the same, but may not be (re-) sellable.
Furthermore, @neitherconfirm said that if a person obtained an artwork rightfully and can prove it but lost the paper, a person would likely get a new one. “A blank signature is an autograph, not a certificate,” he said. Moreover, he added that every certificate of authenticity includes a title, year of production, the artist’s name, materials used, dimensions, number of items produced, number of the item itself, date of signature, and the artist’s signature as well.
‘NFTs Need to Be Backed by an Immutable and Permanent Storage Provider’
Another Twitter account called @checkmynft has been discussing NFT issues like this on the social media platform as well. “Based on the FAQs on the Cent website, the NFTweets metadata is being stored on Matic (now Polygon),” @checkmynft wrote. The author of the Twitter thread explained how Cent’s NFT platform works and how it could be done better.
“While the author, date, and tweet content are saved on Matic, the image URL and tweet URL are stored off-chain on Twitter and Cent respectively,” the Twitter account detailed. “Centralized storage of NFT assets and metadata pose an extreme risk to the underlying value and longevity of the NFT. Storing an NFTs metadata and assets on centralized platforms makes the NFTweet highly vulnerable to loss of the assets if Twitter or Cent were to shut down. The underlying assets of the Tweet will survive only as long as the providers do,” @checkmynft added.
The Twitter account continued:
Storage of the assets is an easily overlooked aspect of NFTs but one that is fundamental to their value. In the case of the person bidding $2.5 million for Jack’s first tweet, you can see why this would be terrible if the assets were lost due to closure or for other reasons. With no reliable backup, the NFTweet would essentially be rendered worthless. The metadata, tweet URL, and image file should be backed by an immutable and permanent storage provider.
The @checkmynft Twitter account further said that a project called Arweave provides this very utility by backing up “NFT assets, files, apps, and blockchains permanently through an endowment mechanism.” Ardrive.io or Arweave is a project that aims to provide immutable and permanent storage.
On May 30, 2020, Arweave wrote about the subject of “NFT permanence” and utilizing Arweave as a solution. “Oftentimes NFTs’ actual digital assets, metadata, and code are stored off-chain on centralized servers,” Arweave’s blog post details. “This information is sometimes seeded to IPFS, but remains at risk of being lost forever if the wrong hard drive fails or node goes offline— just like the centralised web. Without their associated data and assets, such as digital graphics for an NFT-based art piece, NFTs themselves become functionally worthless to the end-user.”
According to Arweave’s claims, the protocol the team designed is meant to permanently store virtually unlimited quantities of data onchain. “Due to Arweave’s ‘pay once, store forever’ data storage model, NFT creators using Arweave can rest assured that their NFT’s assets will be available hundreds of years in the future,” the project’s blog post insists.
Another project that is similar to Arweave is Filecoin, an open-source digital payment system aimed at providing blockchain-based cooperative digital storage. In addition to those looking to harden the NFT concept, in general, many developers are leveraging alternative chains instead of ethereum. Blockchain competitors who could serve the NFT space include projects like Filecoin, Cardano, EOS, Tron, Komodo, Qtum, Polkadot, Cosmos, and Avalanche.
What do you think about the controversy about non-fungible token (NFT) asset immutability? Let us know what you think about this subject in the comments section below.