Users can produce and trade digital goods with different values using non-fungible tokens (NFTs). With the help of services like Pinata (opens new window) and nft.storage, you can go from nothing to a freshly created NFT token that you can store on IPFS (opens new window).
Because IPFS isn't a blockchain, we'll be using the Ethereum blockchain for this tutorial. The techniques outlined here, however, can readily be extended to different blockchains.
What is an NFT?
The term "non-fungible token" is an abbreviation for "non-fungible token." We can develop tokens and deploy them on a blockchain using smart contracts.
A fungible token, like a dollar or Bitcoin, can be used interchangeably. Everywhere, the value is the same. Bills, for example, are fungible in actual currency. This indicates that a ten-dollar bill can be exchanged for ten one-dollar ones. Because one ten-dollar bill is not more valuable than another, its value remains the same and is interchangeable.
What is IPFS?
InterPlanetary File System (IPFS) is an acronym for InterPlanetary File System. It's a decentralized file system for sharing and storing files. IPFS uses content-addressing to uniquely identify each file in a global namespace, according to DataDrivenInvestor. Linking the NFT information to where the asset or artwork is housed is critical for our NFT marketplace development.
IPFS is similar to Google Drive and Dropbox, but not identical. Google Drive and Dropbox are centralized storage solutions, meaning the photographs on the servers are controlled by the website's owners and can be modified anytime.
How IPFS helps
When an NFT is formed and linked to a digital file on another system, how the data is linked is critical. Traditional HTTP links aren't ideal for many reasons.
Anyone can fetch the contents of my-nft.jpeg using an HTTP address like https://cloud-bucket.provider.com/my-nft.jpeg, as long as the server owner pays their costs. However, there's no way of knowing whether the contents of my-nft.jpeg are identical to what they were when the NFT was produced. At any time, the server owner can easily replace my-nft.jpeg with something completely different, causing the NFT's meaning to shift.
This issue was demonstrated in NFTs he made by altering their pictures after they were minted and sold to others.
Because of Content Addressing, IPFS is able to solve this issue. When you add data to IPFS, it generates a content identifier (CID) that is derived directly from the data and relates to other material in the IPFS network. We know that no one can change or alter the content without breaking the link because a CID can only ever refer to one piece of material.
Anyone can get a copy of the data from the IPFS network using the CID as long as there is at least one copy on the network, even if the original source has vanished. As a result, CIDs are ideal for NFT storage. All we have to do now is wrap the CID in an ipfs:/ URI like this.
