Pinata
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Pinata

Who Is Responsible for NFT Data?

Is Da Vinci Responsible for Maintaining the Mona Lisa?

What Makes an NFT?

The creation of an NFT can really be broken into two sections. First, there is the blockchain which handles the minting and accounting of the NFT. Blockchains are really good at ensuring that tiny amounts of data are immutable and secure by replicating the data across thousands of computers across the world. However, blockchains are really bad at storing large amounts of data because it becomes extremely expensive to replicate large amounts of data across those thousands of computers. So, this is where the second part of NFTs comes in, data storage.

The importance of content addressability

Who Pays for the Data Off-Chain?

While storing data using “off-chain” solutions like IPFS is certainly better than using traditional servers / URLs, an important question needs to be considered when doing so:

In order for off-chain data to be retrievable, somebody has to be hosting that data on the IPFS network.

When an artist creates a painting, that painting is not permanent by nature. Typically, the artist will sell that painting to a buyer. At that point, the buyer owns the painting and is then responsible for its permanence. If the buyer enjoys the painting, they will take care of it, maybe sell it to someone else, and then that buyer will take care of it. However, if the buyer doesn’t take care of it, it might be thrown away, severely damaged, or just forgotten about over time. This is a very familiar, intuitive life of a physical asset.

Is Da Vinci Responsible for Maintaining the Mona Lisa?

How does this translate to NFTs? Typically, what NFT creators ask us at Pinata is how they should handle long-term storage of the data. As the creator, they want the NFT data to last forever. There is an expectation in the NFT space for the data to be permanent. But, there is a cost for permanence. And, it certainly isn’t free. There are costs to hosting data that make permanence difficult, especially at scale.

As Is? Warranties?

When an NFT is sold, there should be clear guidelines on who maintains the data and for how long. Let’s look at two simple examples.

An F1 NFT for sale on OpenSea

How to Transfer Responsibility?

Okay, so we’ve created an NFT and we’ve clearly defined how long we are willing to maintain the data associated with the NFT for the buyer. Now, how do we transfer the data? Well, with Pinata and IPFS, that is extremely easy.

Pinata “Pin By Hash”

Define Who Is Responsible

NFTs present amazing functionality for digital assets backed by blockchain. They track digital rights and ownership in a secure and immutable way. However, the data of that NFT not on-chain isn’t permanent. To solve for this, NFT creators need to clearly define who and for how long someone is responsible for maintaining NFT data. With the help of Pinata and IPFS, transferring this responsibility is easy and secure for anyone buying and selling NFTs. Happy Pinning!

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