Fasttoken (ftn) 
KnownOrigin has announced its imminent shutdown, sparking fresh debates about the reliability and longevity of NFT storage solutions.
KnownOrigin Bows Out
Since its inception in 2018 in Manchester, England, KnownOrigin has been a significant player in the digital art space, offering an avenue for artists to mint, sell, and trade NFTs. The platform seemed poised for even greater heights when eBay acquired it in June 2022. The acquisition was seen as a strategic move for the e-commerce giant to enter the burgeoning NFT market.
Despite the initial promise, KnownOrigin is now closing down less than two years after the acquisition. Signs of trouble surfaced on February 20, 2024, when the platform laid off 30% of its staff, following a cooling off of the NFT frenzy that characterized the crypto space from late 2020 to mid-2022.
On July 17, KnownOrigin announced through a series of posts that it would be winding down its on-chain marketplaces and minter, redirecting users to secondary marketplaces.
The IPFS Debate: On-Chain vs Off-Chain Storage
One of the significant discussions following KnownOrigin’s shutdown revolves around the longevity and security of digital assets. The news has raised concerns about the sustainability of the InterPlanetary File System (IPFS) as a storage solution for NFTs.
Digital artist Ella, also known as BrightLightArt, expressed her concerns on social media, highlighting a critical issue in the NFT ecosystem: the misconception that NFTs and their associated media are entirely on-chain.
Are eBay going to pay the IPFS storage bill forever? If they stop paying, the art will eventually die.
Tech experts explain that most NFTs are not stored directly on the blockchain but contain metadata pointing to an off-chain file stored on platforms like IPFS. While IPFS aims to be more resilient than traditional web servers, it has limitations. If the entity hosting the IPFS node goes out of business or stops maintaining the node, the data could become inaccessible, rendering the NFT effectively worthless.
Understanding What You “Own” with an NFT
In a past post, Jonty Wareing, a critic of the current state of NFT storage, shared the results of an extensive analysis on how NFTs reference the media they represent. According to him, purchasing an NFT means buying a token pointing to a URL on the internet or an IPFS hash. This URL often points to a JSON metadata file that includes information about the media, which is hosted on a server controlled by the NFT platform. If the platform shuts down, the token would point to a non-existent file.
Even NFTs using IPFS hashes for storage are only partially secure. IPFS serves files as long as there is a node in the network hosting the file. If the entity responsible for pinning the file to IPFS goes out of business, the file could vanish, leaving the NFT pointing to an inaccessible file. This dependency on third-party platforms for the longevity of NFT data is a significant vulnerability.
Right now, NFTs are built on an absolute house of cards constructed by the people selling them.
Sam, an Ethereum engineer with extensive IPFS experience, acknowledged these criticisms, stating that the technology is evolving and the industry needs better tools and practices to ensure the security and permanence of NFTs.
However, not all NFTs face this issue. Some projects are entirely on-chain, meaning they have a decentralized system to store both NFT metadata and their visual media. The biggest hindrance to more projects adopting such measures is the cost of full on-chain storage, especially for larger media files.
Potential Solution and Future Considerations
The KnownOrigin shutdown has prompted introspection within the NFT community. Some artists and collectors are advocating for storage solutions like Arweave, a blockchain-based storage solution that aims to provide permanent data storage for a one-time fee. When you store a file on such platforms, it is stored across a decentralized network of computers, ensuring its availability as long as the network exists. This makes it a more reliable option for storing digital art in the long term, though it still relies on the health and continuity of the underlying network.
The closure of KnownOrigin should serve as a wake-up call for the NFT community, highlighting the importance of understanding how NFTs are stored and the risks associated with current practices. As the technology evolves, it will become imperative for NFT platforms, artists, and collectors to advocate for and adopt more secure and sustainable storage solutions for digital art.
Hopefully, the discussions sparked by this event may lead to significant improvements in how digital art is stored and preserved, benefiting the entire crypto art community.
For more updates and news on the evolving world of NFTs and cryptocurrencies, explore Global Crypto News.
