How to get NFTs right — Architecture and Roadmap — Part 1

Published in

VideoCoin

5 min readApr 13, 2021

A few days back, we announced our intent to bring VideoNFTs to the market by integrating VideoCoin with Filecoin. In this series of posts, I will be covering in-depth the technical architecture and the roadmap of our integrated platform.

Problem: Today’s NFTs are deeply tied to the issuing company and longevity is not guaranteed

While NFTs are very hot in recent times, the technology powering NFTs has shortcomings and the biggest one is how an NFT references the media that you “own”.

This very informative and entertaining thread by Jonty Wareing on Twitter is a great summary

Like Jonty notes, a famous artwork sold by an NFT company is directly hosted on the company’s servers. If for some reason the NFT company ceased to exist, the NFT will go down along with the company. While the person who bought the token may still hold the ERC-721 token because Ethereum is more resilient, the underlying media itself would have vanished rendering the token all but useless. Check out this SNL’s NFT from their NFT skit “What the hell’s an NFT?” and see if you can find where consumers and the media actually reside.

Some projects use IPFS to store the files, but the problem remains the same. If the IPFS node decides to not host a media file, the NFT that you just purchased will be worthless as you can no longer access the media file.

The amazing NFTs that are being created today will be seen by future humans as a cultural and historical record. If these NFTs are not stored properly, we are looking at another GeoCities in the making.

Solution: VideoCoin + Filecoin NFT Proof of ownership

We solve this problem by implementing a novel and irrefutable “Proof of Ownership” that uses a combination of VideoCoin and Filecoin technologies to store these NFTs with much more control over the longevity. With over 4100 PiB available for storage across 1800+ Miners (at the time of writing), Filecoin provides a form of decentralized storage that is more resilient than any centralized storage system.

VideoCoin uses video DRM technologies, along with ephemeral key exchange and encoding to create and record an irrefutable proof of ownership on the VideoCoin and Filecoin blockchains. By using Filecoin to store these media files and proofs, we will ensure the longevity of the NFT.

A detailed explanation of how this proof work will be published shortly.

Problem: Creating, sharing, and managing Video NFTs is a technically arduous experience

Solution: Our Platform

We are building the first platform specifically designed for creating and trading Video NFTs. And not just that, our platform is fully open source and developed with transparency, which lets anyone make a platform to create and trade VideoNFTs on VideoCoin + Filecoin blockchains. The software is open-sourced with a permissive license (dual-licensed under Apache and MIT as permitted) and any company, or individual can create their own marketplace or integrate the NFT functionality into their products or even better — build advanced video applications using the NFT platform.

This open-source platform will use VideoCoin for:

Establishing and verifying NFT Proof of Ownership
Implementing token contracts, providing standard ERC-721 and ERC-1155 interfaces
Encode, re-encode and manage video assets by creating thumbnails, mobile-optimized videos, and create gifs
Act as a layer-2 solution to bridge VideoCoin, Filecoin, and Ethereum and provide a low gas cost transaction engine

and will use the Filecoin blockchain for:

Storing and retrieving the media files
Storing, retrieving, and establishing the NFT’s Proof of Ownership

Problem: Scalability and GAS

A typical NFT takes about $90 in GAS fees to change hands on the Ethereum Mainnet. See the example here. This level of GAS fees becomes unsustainable for any real large-scale NFT operation, which explains the industry shift towards layer-2 solutions to scale up NFT solutions. However, a completely isolated NFT solution that lives entirely on a new blockchain that's not fully decentralized like Ethereum, adds to the same risks as the NFT issuing company going down. The blockchain project itself can go down taking the centralized blockchain solution and the NFT along with it.

Solution: VideoCoin + Filecoin NFT Trust and Scalability Layer

VideoCoin’s VideoNFT platform provides Ethereum compatible scalability layer that removes the need for high GAS fees. The NFT contracts, tokens, and all mechanics are provided by the VideoCoin blockchain, consuming GAS fees in VID, which is a fraction of the cost compared to ETH. A typical transaction on the VID network takes 50000x lower fees.

But this obviously does not solve the trust issue because if for some reason VideoCoin Network goes down, then the NFT goes down with it. To solve this, we are implementing a trust layer that syncs NFT transaction data back to Filecoin blockchain and any other ETH compatible blockchain, like the Ethereum mainnet.

This provides an unparalleled level of trust and security for our NFT platform and in case of a catastrophic event, any entity can use the open-source software, the data available on Filecoin and ETH mainnet, and reconstruct an NFT’s life.

Summary: Differentiators

Novel Proof of Ownership: Guarantees longevity of NFTs created on our platform
Ease of use: Video NFT creation platform that anyone can use or deploy themselves
Scalability and trust: Low GAS fees via VideoCoin Native Blockchain and trust and interoperability by syncing data with Filecoin and ETH

Roadmap

As an open-source project, we will be developing this product on our Github. All project code, architecture, and documentation will be published and linked to from this Github repository https://github.com/videocoin/videonft

The following dates are the ones we are tracking presently:

VideoNFT Architecture Specification v0.1— April 21, 2021
Product Design Preview — May 3, 2021
Alpha — July 1, 2021
Beta and Launch — TBD

In part 2 of this series, we will look deeper into NFT Proof of ownership and how we expect to keep the confidence of the NFT holders without us in the middle.