How Are NFTs Stored?

Propel
2 min readFeb 8, 2023

Non-fungible tokens (NFTs) are cryptographically unique tokens that are linked to digital (and sometimes physical) content, providing proof of ownership. Have you ever wondered how NFTs are stored? NFT holders may not own much more than a URL or token ID. So it’s worth taking the time to understand how NFT storage works before you think about buying or making an NFT.

On-chain vs off-chain storage

NFTs (Non-Fungible Tokens) can be stored either on-chain or off-chain. On-chain storage means that the NFT data is stored directly on the blockchain, making it immutable and accessible at all times. Off-chain storage, on the other hand, refers to storing NFT data outside the blockchain, but still having a unique identifier linked to it on the blockchain. This approach can offer faster access times and lower storage costs, but it is less secure than on-chain storage because the NFT data is not stored on the blockchain and could potentially be lost or altered. The choice between on-chain and off-chain storage for NFTs depends on various factors such as accessibility, security, cost, and performance.

On-chain storage can be preferable because it means that users can verify all facets of the NFT. However, very few NFT projects opt for this method of storage.

Centralised and decentralised hosting

As we discussed, NFTs can be stored either on-chain or off-chain. In the case of off-chain storage, the NFT’s smart contract contains information that points to the location where the NFT image is stored, usually in a hash form. This hash can be linked to centralized hosting providers like Amazon or Google, but these come with the risk of being shut down and potentially losing the NFT.

To overcome this, many projects opt for decentralized solutions like hosting NFT data on the InterPlanetary File System (IPFS). IPFS is a decentralized network that stores files across multiple nodes, making them resistant to single points of failure. NFTs stored on IPFS are not technically on-chain, but they are safer and censorship-resistant as no single entity has the power to shut down the network.

Conclusion

In conclusion, the choice of NFT storage depends on the trade-off between accessibility, security, cost, and performance. On-chain storage offers immutability and accessibility, but at a higher cost. Off-chain storage is faster and more cost-effective, but comes with the risk of being lost or altered. Decentralized solutions like IPFS offer a good balance between security and cost-effectiveness, making it a popular choice for NFT storage. Ultimately, the decision on NFT storage will depend on the specific requirements of each project and the priorities of the creators and owners of the NFTs

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Propel

MaaS(Metaverse as a Service) & DaaS (DeFi as a Service) Infrastructure Provider