{"id":309398,"date":"2021-07-27T19:12:00","date_gmt":"2021-07-27T16:12:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/blockchain-tech-is-holding-nfts-back-because-of-these-three-design-flaws\/"},"modified":"2021-07-27T19:12:00","modified_gmt":"2021-07-27T16:12:00","slug":"blockchain-tech-is-holding-nfts-back-because-of-these-three-design-flaws","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/blockchain-tech-is-holding-nfts-back-because-of-these-three-design-flaws\/","title":{"rendered":"# Blockchain tech is holding NFTs back because of these three design flaws"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a4130dabe25e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a4130dabe25e\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/blockchain-tech-is-holding-nfts-back-because-of-these-three-design-flaws\/#The_thorny_issue_of_ownership\" >The thorny issue of ownership<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/blockchain-tech-is-holding-nfts-back-because-of-these-three-design-flaws\/#Protecting_content\" >Protecting content<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/blockchain-tech-is-holding-nfts-back-because-of-these-three-design-flaws\/#Ownership_bound_to_identity\" >Ownership bound to identity<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Blockchain tech is holding NFTs back because of these three design flaws <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDcvZjcwOWZiMTAtMmRmNC00MTcwLWExYjUtYTNiNzY1ZmViYjhiLmpwZWc=.jpeg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>Years after CryptoKitties were released to the masses, the nonfungible token (NFT) sector is finally going places.<\/p>\n<p>Coveted collectibles are selling for millions of dollars in some of the world\u2019s finest auction houses. Top-flight soccer and basketball teams are releasing once-in-a-lifetime moments that fans cherish. Movie studios are starting to issue NFTs as memorabilia too, unlocking new revenue streams when they are needed most.<\/p>\n<p>It\u2019s little wonder that NFT-focused companies are attracting eye-watering valuations. Just take a look at Sorare, which is on track to secure a price tag of at least $3.8 billion through its latest funding round. Although there have been endless proclamations that a bubble is forming in this nascent space, big brands are convinced these assets have staying power. Let\u2019s not forget the countless use cases for NFTs that have yet to be discovered, too.<\/p>\n<p>Unfortunately, a dark cloud is hovering on the horizon \u2014 and it\u2019s one that risks holding the NFT sector back. Right now, blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> doesn\u2019t provide anywhere near enough value propositions to motivate a user to own these crypto collectibles. If the market is going to proliferate \u2014 and attract everyday users \u2014 the industry needs to tackle three key design issues.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_thorny_issue_of_ownership\"><\/span>The thorny issue of ownership<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Let\u2019s imagine you own an NFT that represents a beautiful piece of artwork by a celebrated painter. In all likelihood, you would have paid a pretty penny for it.<\/p>\n<p>But here\u2019s the problem: That crypto collectible is completely worthless without the existence of the underlying asset it\u2019s meant to represent. Right now, there is a huge cost to permanently store the high-resolution image data that gives such NFTs their value. The problem is exacerbated even further when you take videos into account.<\/p>\n<p><strong><em>Related:<\/em><\/strong><strong><em> <\/em><\/strong><strong><em>NFTs make it possible for <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>rs to have digital property rights<\/em><\/strong><\/p>\n<p>Without the right incentives, blockchain nodes responsible for protecting these files may not function as they should, and this could cause NFT data to be lost irretrievably. It\u2019s one thing to pay $1 million for a rare nonfungible token \u2014 it\u2019s quite another to lose that investment because of circumstances that lie out of your control.<\/p>\n<p>The best <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roach to solving this problem is to ensure that economic incentives are more widely distributed whenever NFTs are sold \u2014 beyond the token\u2019s original creator, the seller or the marketplace facilitating the transaction. Nodes should be given a cut of the profits too.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Protecting_content\"><\/span>Protecting content<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Even if this design flaw is speedily addressed, others arise that could undermine the value of a rare NFT. At present, most content protection mechanisms used for digital assets are either nonexistent or weak. The data underpinning digital collectibles is typically stored on centralized file servers, which increases the likelihood of hacking \u2014 or exclusive data being shared illegally.<\/p>\n<p><strong><em>Related:<\/em><\/strong><strong><em> <\/em><\/strong><strong><em>To change the art industry, NFTs must be more secure<\/em><\/strong><\/p>\n<p>For an NFT to be truly valuable, only its owner should be able to see and enjoy the data that\u2019s contained within. Implementing digital rights management, or DRM, would help to protect an investment, and it could help assuage some of the concerns surrounding what marketplaces are actually selling. This approach wouldn\u2019t be too dissimilar to the approach that Apple took when it launched its iTunes Store, adding DRM to music to ensure that it was rightfully the owner\u2019s track and nobody else\u2019s.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Ownership_bound_to_identity\"><\/span>Ownership bound to identity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Last but by no means least, we need to reflect on the fact that NFTs cannot be exchanged \u2014 and this means that once they\u2019re lost or stolen, the damage is permanent.<\/p>\n<p>If nonfungible tokens are going to become a dominant force in the coming decades, we need to create a mechanism where NFTs can be inherited \u2014 allowing coveted digital assets to be passed from one generation to the next. We shouldn\u2019t bind the ownership of an NFT to a private key \u2014 instead, a blockchain should tie these rights directly to someone\u2019s identity. This will help future-proof this asset class and ensure that control is never lost.<\/p>\n<p><strong><em>Related:<\/em><\/strong><strong><em> <\/em><\/strong><strong><em>Will regulation adapt to crypto, or crypto to regulation? Experts answer<\/em><\/strong><\/p>\n<p>We already live in a world where information is lost at alarming rates. Millions of web pages \u2014 filled with vivid stories, photos and videos \u2014 have already been taken down and lost forever. To let the same thing happen to NFTs would be a travesty.<\/p>\n<p>Now is the time to act. The NFT industry is still at an early phase, and sweeping improvements can be made before we advance to mass adoption. Failing to tackle these design flaws could ultimately stymie the size of this industry years down the line and cause sizable headaches for those who have invested in tokens worth more than houses.<\/p>\n<p><em>This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.<\/em><\/p>\n<p><em>The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Phantom Seokgu Yun <\/strong>is the CEO and chief scientist of SWN Global. He has over 25 years of experience in cryptography, algorithms and security architectures. Phantom has provided security solutions to Davos and G20 summits, LG, Samsung and Yahoo, among other multinational corporations. He currently leads the MetaMUI CBDC and NFTs platform, the first identity-based blockchain.\u00a0<\/div>\n<\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/blockchain-tech-is-holding-nfts-back-because-of-these-three-design-flaws\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Blockchain tech is holding NFTs back because of these three design flaws &#8221; Years after CryptoKitties were released to the masses, the nonfungible token (NFT) sector is finally going places. Coveted collectibles are selling for millions of dollars in some of the world\u2019s finest auction houses. Top-flight soccer and basketball teams are releasing once-in-a-lifetime&#8230;<\/p>\n","protected":false},"author":1,"featured_media":309399,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDcvZjcwOWZiMTAtMmRmNC00MTcwLWExYjUtYTNiNzY1ZmViYjhiLmpwZWc=.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,77892,74863,77169,79786,76320,76174,95118,117,4965],"class_list":["post-309398","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-crypto-collectibles","tag-cryptocurrencies","tag-cryptokitties","tag-digital-asset","tag-identification","tag-identity","tag-nft","tag-business","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/309398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=309398"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/309398\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/309399"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=309398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=309398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=309398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}