The debate over on-chain and off-chain storage of Non-Fungible Tokens (NFTs) in blockchain ecosystems has become a focal point for Web3 executives and content creators. They are considering which NFTs deserve a position on blockchain networks and which should remain off-chain. The discussion revolves around the unique advantages and disadvantages of each storage method.
In 2022, NFTs were not stored as data on blockchain networks, and the system indicated that NFT data was kept off-chain. Jana Bertram from Rari Foundation highlighted that off-chain storage relies on network accessibility and the availability of the storage layer, which poses potential security risks and affects the permanence of NFTs.
The introduction of Bitcoin Ordinals has changed the game, allowing NFT data to be stored on-chain, leading to different processes. While this provides benefits like permanence to Bitcoin-based NFTs, it also sparked a debate about whether NFTs should exist on the Bitcoin network, with opinions divided between those who see it as causing congestion and others who advocate for their continued presence.
With various storage options available, Web3 content creators must decide how they want to store their NFTs. This decision can be confusing, but professionals in the NFT space have provided insights on how to make this choice. Witek Radomski, co-founder and CTO of Atlas Development, stated that off-chain storage is the most cost-effective method for processing large amounts of data.
Radomski also mentioned hybrid options like Filecoin and the InterPlanetary File System (IPFS), which offer decentralized storage solutions designed for storage, unlike Bitcoin. He emphasized that storing images on IPFS still provides the benefits of decentralization but at much lower costs.