kodadot/nft-gallery

---
date: 2023-04-27
tags: NFTs
image: /blog/exploring-the-superiority-of-on-chain-nfts.webp
title: Exploring the Superiority of On-Chain NFTs
subtitle: In today's digital world, Non-Fungible Tokens (NFTs) have become a hot topic. They've been the talk of the town, with many people drawn to their unique characteristics and potential for representing ownership of digital assets. However, not all NFTs are created equal. One important distinction lies in how they are stored — either on-chain or off-chain. In this comprehensive guide, we'll delve into the world of on-chain NFTs, exploring their advantages and why they're considered superior.
---

## Unraveling the Concept: What are On-Chain NFTs?

Before we dive into the nitty-gritty of on-chain NFTs, let's first understand what they are. On-chain NFTs are digital tokens that are fully written and stored on the blockchain. This includes the metadata and the smart contract associated with the token.

To put it simply, the entire "information" of these NFTs exists on the blockchain. This information includes unique traits, descriptions, and even the transaction hash of the generated NFT, making it unique. In contrast to off-chain NFTs, which store part of their data outside the blockchain, on-chain NFTs live and breathe entirely on the blockchain.

## Distinguishing On-Chain and Off-Chain NFTs

The fundamental difference between on-chain and off-chain NFTs lies in their storage location. As mentioned earlier, on-chain NFTs live entirely on the blockchain. Contrarily, off-chain NFTs have their data stored outside the blockchain, hence the name "off-chain".

In the case of off-chain NFTs, the smart contract resides on the blockchain, while the actual digital asset, such as the image or video file, and its metadata, are stored off the blockchain. This could be on a server, cloud storage, or a decentralized file storage system like IPFS (InterPlanetary File System).

## Evaluating the Challenges of Off-Chain NFTs

Storing NFTs off-chain might seem like a feasible option, considering the cost-efficiency and widespread use of cloud storage. However, this approach comes with its share of challenges.

Primarily, cloud storage is internet-dependent. Your NFTs are technically stored on the internet, which means they are susceptible to disruptions if the host (for instance, Google) experiences any issues. This lack of control over your stored assets could pose a risk.

Additionally, off-site server storage, which is another option for off-chain storage, comes with its own set of drawbacks. Physical servers are expensive to purchase, run, and maintain, making them a less than ideal choice for NFT storage.

Furthermore, both these options face a crucial flaw: security. It's challenging to put complete trust in a cloud susceptible to hacking or centralized servers that could shut down at any moment, resulting in potential loss of your NFTs.

## Embracing the Future with On-Chain NFTs

Given the challenges associated with off-chain NFTs, on-chain NFTs stand out as a more secure and reliable alternative. By storing your NFT entirely on the blockchain, you eliminate the need to rely on any third-party systems. As long as the blockchain exists, your NFT remains intact.

Moreover, the value of your NFT is inherently tied to its uniqueness and authenticity. With on-chain NFTs, all the necessary data is stored on the blockchain, making it easier to verify the token's originality. This enhanced security and transparency can contribute to increasing the perceived value of your NFT in the market.

## Pioneering On-Chain NFT Projects

Despite the clear advantages of on-chain NFTs, not many projects have fully embraced this concept yet. However, some have taken the leap and are paving the way for the future of on-chain NFTs.

### LarvaLabs' CryptoPunks

CryptoPunks, created by LarvaLabs, is one of the most well-known on-chain NFT projects. Initially launched as off-chain NFTs, LarvaLabs later moved CryptoPunks onto the Ethereum blockchain, despite the hefty cost of 73M gas. The move cemented the longevity and accessibility of the CryptoPunks images and attributes on the Ethereum blockchain.

### OnChain Monkey

OnChain Monkey (OCM) is another innovative on-chain NFT project that claims to be the first Profile Picture (PFP) NFT collection to be generated on-chain, all in a single transaction. The project has gained solid community backing and has ongoing endeavours like the Monkeyverse, a soon-to-be metaverse, and Metagood Moments.

### Nouns WTF

The high-profile Nouns WTF project, created and promoted by crypto and NFT celebrities, has also embraced the on-chain concept. They have successfully executed projects like pairing up with well-known organizations, naming a rare frog species after Nouns, and even sending a Noun to the International Space Station.

## Discovering On-Chain NFT Projects

As on-chain NFT collections are still a relatively unknown concept, finding hidden gems might seem challenging. However, resources like the list of Generative on-chain art projects compiled by [emrecolako](https://twitter.com/@emrecolako), [0xchainart](https://twitter.com/0xchainart) can serve as a valuable tool for discovering promising on-chain NFT projects.

## Are On-Chain NFTs the Future?

The future of NFTs seems to be leaning towards on-chain storage. While off-chain NFTs are generally cheaper and more widely used, on-chain NFTs offer greater security and permanence.

In the end, the choice between on-chain and off-chain NFTs boils down to the specific requirements of the project and the preferences of the investors. As the NFT space continues to evolve, we can expect more projects to explore the benefits of on-chain storage, further solidifying its place in the future of NFTs.

## Wrapping Up

In conclusion, understanding the distinction between on-chain and off-chain NFTs is essential for anyone involved in the NFT space. While both have their own set of merits and demerits, on-chain NFTs stand out for their enhanced security, transparency, and longevity. As we move towards a more decentralized future, the trend of on-chain NFTs is likely to gain more traction, shaping the future of the NFT market.