The evolution of NFT: higher storage standards, higher economic value
As the enthusiasm for NFT investment continues to grow, so do the prices of individual NFTs. As the first trigger of the NFT market, the work Everydays-The First 5000 Days by the venerable digital art creator Beeple, which sold for $69 million in March 2021, has become a topic that cannot be detoured when referring to the NFT market.
This sale has already surpassed the second most expensive work by a living traditional artist, and in March 2021, almost at the same time as Beeple’s Genesis sale, Sacha Jafri’s The Journey of Humanity sold through an auction for a final price of $62 million — This painting of the pandemic was 1,595.76 square metres — the size of four basketball courts — and took seven months to paint, using 1,065 brushes and 6,300 litres of paint, compared to Beeple’s work, which was a single JPG image.
In fact, two other works by Beeple, Crossroads and Ocean Front, had sold for $6.6 million and $6 million respectively before that. The recognition and desire for the concept of a metaverse have given digital artwork a value that rivals traditional artwork, which is beyond most people’s understanding of artwork, where a JPG image that can be reproduced and distributed at will is worth more than a painting the size of four basketball courts that took a huge amount of labour. While people do not understand this, they are also attracted to the high short-term returns that digital art in the form of NFTs can bring, and the value of NFTs traded and the price of individual NFTs sold are at record levels.
In this enthusiasm for investment, some factors that can have a significant impact on value are often overlooked — such as storage methods.
The importance of storage methods for works of art has long been appreciated in the traditional art world, most notably in the case of Leonardo da Vinci’s The Virgin and Child With Saint Anne. Due to the low storage standards used at the outset, this heirloom painting, created in 1503, accumulated a great deal of dirt over the centuries. The Louvre cleaned it, causing irreversible damage to the painting.
Because of the need for long-term preservation, artworks require an extremely demanding storage environment, where temperature, humidity and lighting must all be controlled within certain limits, and dust and insects must be kept at bay, so that a mere error in detail could lead to the destruction of the work. In contrast to the traditional art sector’s demanding storage methods for artworks, the NFT sector has equally high standards for the way in which metadata is stored.
NFT is essentially a smart contract recorded on the chain, with a one-to-one relationship with the media data images under the chain. The on-chain smart contract is protected by the decentralization of the blockchain and its security does not need to be questioned too much, but its metadata and media data are stored in a variety of ways, most of which are currently stored on a centralized server.
The centralized storage method carries a greater risk of data loss, as the links to the common web pages to which the contracts point often expire in 3–5 years. Once the link expires, the value of that NFT item goes to zero, even if its original price was high. There have already been cases of NFT media data loss in the short period of time that NFT has been bursting at the seams.
Therefore, as with traditional artworks, a valuable artwork that is not stored well will have a shortened life, be destroyed or even lose its value to zero. The higher the value of the artwork, the higher the standard of storage required, and the higher the standard of storage necessary to ensure that the value lasts forever.
In the traditional art market, there is a need to protect against external theft in order to preserve value, as well as against damage caused by one’s own environment. In the NFT space, it is necessary to protect against both hacking to steal and corrupt metadata and against data loss due to its own server failures. The best way to prevent hacking and server failure is to adopt decentralized storage. 18 August 2021, the development team of NFT’s star project CryptoPunks Larva Labs announced that CryptoPunks is fully on Ethereum, having spent a significant amount of money to do so. CryptoPunk’s high value is closely related to its improved storage standards.
The value of NFT is inevitably affected by the way it is stored, and a high value inevitably needs to be matched by a high standard of storage. On the Opensea trading platform, some of the projects disclose the storage method. As can be seen, high-value projects generally use decentralized storage methods, while lower-value projects generally use centralized storage methods.
A new storage option for NFT: MEFS
The higher the standard of storage, the higher the economic value, the law of value has been manifested. CryptoPunks has put all the NFT data on the chain, not hesitating to pay a high cost for it. But in addition to public chains such as Ether, MEFS is a more cost-effective new option for NFT storage. MEFS is a MEMO decentralized storage file storage system, using the district blockchain as the underlying technology, using the concept of sharing economy and layered storage strategy, which can effectively reduce on-chain redundancy and increase scalability and availability while ensuring secure storage, helping to store NFT safely and permanently. As the world moves towards digitalization, assets are also moving towards digitalization, which is an inevitable part of the development of the digital world. In the process of preserving and perpetuating the value of digital assets, decentralized storage will play an important role, and MEFS will give NFT a higher value with its high standard of decentralized storage.