Thread by @Nahiiko

Wanna know why your NFTs will be worth 0$ soon ?

A Thread 🧵👇 (0/15)

1/15
First I need to make sure you understand what NFTs really are, to do that we'll use Michael here.

Michael works in an Open Space called "Ethereum Blockchain".
His job is being the Cryptopunks Smart Contract.

So he sits at his desk, and waits for people to call him.

2/15
His answers are all written down by his management on a small page on his desk, like the call centers all have you know ?

This page is the Smart Contract Code !

Alright, let's look at a typical day for Michael :)

3/15
9AM:
- Jim calls Mike to transfer a punk
- Mike looks at his page, which says he needs to make sure Jim owns the punk before transferring it
- He looks at the owners List and sees Jim doesn't own punk 55 but punk 69, so he answers "No"

Easy right ?

4/15
1PM:
- Dwight calls to see what punk 69 looks like
- Mike checks the page, which states he can show a punk to anybody, no requirement !
- He then sends the punk to Dwight

Right ? NO ! This is incorrect

5/15
In fact what happens is this:

Mike will send a LINK to Dwight, not the data itself (I'll get to why very shortly)

6/15
Now once Dwight CLICKS on the link, the server on the other side of that link (which can be a Google Cloud server for example) will send the punk's data (Image etc.) to him

7/15
The issue is, what if I, as the owner of the server, forget to pay my subscription ?

You guessed it, your NFT is empty now ! You technically still own it, but nobody can tell what it contains.

It may aswell be worth nothing at that point.

8/15
Nowadays most NFTs use IPFS to mitigate this risk, this is how it works.

Instead of asking one server, Dwight now asks multiple servers for the data.
If they don't have it, they ask a friend, etc. etc. Until someone does !

Now even if one server goes down, you're OK.

9/15
BUT.
This assumes someone in the network will host your 5MB or whatever data (the image, title etc. of the NFT).

Why would they do so...for FREE ? You guessed it, they ask for payment ! in fact most IPFS hosted data is done so from companies like Pinata.

10/15
To summarize you either:
- Host your own data, but if your computer goes down ➡️ so does the NFT

- Pay IPFS node companies like Pinata, but if they go down ➡️ so does the NFT.

- Use a blockchain called arweave to host the data, but if it goes down ➡️ so does the NFT.

11/15
Such a headache 😭 right ?
All this because damn Mike doesn't just directly send the NFT's data !

But why ? Why does Mike send a link and not an image ?

Well, Remember that Mike only knows stuff that's on the page. And that page is goddamn small ! in Fact it's 24KB max !

12/15
And if that sounds like a lot,
Well this here, the small avatar, is 32KB ! So that doesn't fit inside the page ! which remember also has to contain ALL the info for Mike to answer to people calling

13/15
So.. You're fucked if you want to have NFTs stored on chain ?

Well... not really !

14/15
You can use text, which look like nonsense, but when looked at using a browser will end up as images !

This for example is ECHOES, an on-chain visitor's book I created.

You can see why I'd like signatures from people I love not be hosted on some server, but on Ethereum!

15/15
And if that looks limiting, hang on, dive deeper into code, and you'll see, you can create beautiful stuff with .SVG & co

Like these, and many others you may already know !

FYI: There's a lot of simplication happening here, but it's a good summary of why #onchain art exists (and I love it)

Last but not least there are neat initiatives like @club_nft by @artnome that raise this issue for existing NFTs and help everyone backup their collection (not a shill, just like the initiative).

Oh, and this is a twitter adaptation of a talk I did at @NFT_NYC.

Photo credit: @kazmapp