What is NFT Metadata
NFT metadata is a set of data that makes up the content of an NFT, and is usually specified in a JavaScript Object Notation (JSON) format. The metadata of an NFT can describe its characteristics and properties, such as its name, description, transaction history, traits, link to the hosted image, and more.
As technology evolves, new buzzwords enter our vocabulary and become part of our daily lives in a matter of seconds. The latest trend is the term “meta”, which has recently gained prominence after Facebook’s rebranding. While it’s exciting to explore the endless possibilities of metadata, it’s essential to prioritize our crypto fundamentals before jumping onto the bandwagon.
Non-Fungible Tokens (NFTs) are an example of such crypto fundamentals. They represent a unique digital asset, such as a .JPEG file, .GIF, .MP4, or anything else. However, these files cannot be stored on the Ethereum blockchain, which is why NFT metadata serves as a workaround. It specifies data, including the visual or auditory asset and transactional history, allowing the digital asset to exist on the blockchain while keeping the data off-chain.
But why can’t we store the files natively on the blockchain? Well, the Ethereum blockchain already surpasses a whopping 1,050 GB. Considering DeFi, NFTs, and dApps constitute only a fraction, it’s impossible to store larger files natively on-chain without causing technical and financial chaos. Storing just 1 GB of data on Ethereum’s blockchain costs an estimated 17,500 ETH or $75.75 million, according to Gemini.
However, as with any solution, there come problems. NFT metadata existing off-chain poses a few other challenges that we’ll explore in further detail below. So, while metadata may be all the rage, let’s not forget the fundamentals that make crypto work.
Let’s Get Technical: NFT Metadata
Blockchain technology has enabled the creation of non-fungible tokens, or NFTs, which are unique digital assets that can be bought and sold like any other collectible item. Ethereum’s ERC-721 token standard is a popular choice for creating NFTs because it includes a “metadata” string in its definition. This metadata is what defines the non-fungible token and distinguishes it from others.
The metadata for an NFT can include a pointer to a specific digital file, such as a .JPEG image. This is where things can get tricky, as the value of an NFT can vary greatly depending on the specific file it points to. For example, a CryptoPunk .JPEG and a DeadFellaz .JPEG may be of similar file size, but their respective values can be vastly different.
One key aspect of NFT metadata that can be confusing is where the actual digital files are stored. While the metadata itself is stored on the blockchain, the file it points to is typically stored off-chain in a separate location. This could be a file storage service such as Google Drive or Amazon Web Services, or it could be hosted by the creator or seller of the NFT. When someone purchases an NFT, it makes a request for the file content at a specific location, which is returned so the user can see or hear the digital asset. The location of the file is often referenced using an IPFS hash or an HTTP URL on the internet.
In order to ensure that token metadata is securely and efficiently stored on the Ethereum blockchain, developers have chosen to utilize Universal Resource Identifier (URI) technology. The data is embedded within the contract, rather than stored as traditional JSON files. This decision was made intentionally to avoid incurring excessive costs and depleting resources.
Although the metadata is stored within the Ethereum contract in URI format, it is easily accessible to users who can follow the path pointed to by the URI string. This location houses the complete JSON description of the token, including descriptive information about the token, as well as ownership records and complete transaction history.
As a permanent and immutable record on the blockchain, the metadata associated with a token is fully transparent and verifiable. By examining the metadata, interested parties can learn a wealth of information about the token, including its URI string, the asset it represents, and even granular details like the project’s total supply and encryption type. The metadata is a critical element in creating trust, as it allows users to better understand and authenticate the asset, thus making it more valuable to those seeking to invest in it.
