Is Current NFT Storage Truly Decentralized?




Apr 14, 2023

Considering virtual assets are on the rise, there is a need for dependable storage. Some of the main reasons for this development are safety and ensuring that virtual assets have no central control.

This article will explain if NFTs storage is truly decentralized or not.

Contrary to popular misconception, NFTs are not stored on the blockchain. During the minting process of NFT, a digital signature is generated in reference to the NFT. Each digital signature is unique and is a token with its own address which indicates the digital assets.

The token which represents the digital signature is saved on the blockchain while the digital assets are stored on an NFT marketplace. And this is where decentralization or not comes to play.

A good majority of the NFT marketplace is built on the Ethereum blockchain, which is a decentralized blockchain – this is where tokens are kept. The tokens are non-fungible and by extension decentralized. The actual digital assets on the other hand are not stored in the same place as the token. They could be stored on some other server that does not have the same decentralized nature.

This is where buyers tend to get confused, deciphering the not-so-straight line of the token and its decentralized nature from the actual digital asset and its storage.

Understanding Web3

Web3 or web3.0 seems to be the trending buzzword in the internet ecosystem, with everyone trying to get into it early enough to avoid being left behind.

Web3 is preceded by its forerunners, Web1 and 2. The latter presented interactive webpages and the social web, while the former was mostly a proprietary property that featured read-only static pages.

Web3 is the ongoing project of the internet that presents decentralization as the main idea of its existence. It’s free of all forms of external control from the government, corporations, or regulations.

There would no longer be a need to access the internet through company services like Google, Yahoo, or Facebook. Individuals will personally own parts of the internet.

What’s interesting about web3 is that it is open-source software, that is, it does not require permission. This means leading authorities don’t have a say as to who accesses what services.

It is also trustless, which means transactions are enabled without the need for a third party to authenticate them

This ensures that the privacy of users is observed and protected.

Another element of Web3.0 is Decentralized finance, also known as DeFi. It allows for real-life financial dealings on the blockchain without the input of external bodies.

It's impossible to talk about Web3 without mentioning the metaverse. The metaverse represents a virtual reality environment where users are able to relate with each other and with the digital world.

The metaverse uses technologies such as 3D, virtual reality (VR), and Augmented reality (AR) which will allow us to interact with the virtual world.

The introduction of metaverse technology will change the way we interact with some applications in many ways.

Distributed Apps and Web3

Distributed applications or DApps refers to a system where all the parts of that system are located and run in different locations concurrently.

These dispersed systems are spread across many nodes on the same network and are able to communicate with each other to realize specific tasks.

As a result of the distribution, DApps are more secure and are less susceptible to attacks as a failure in one of the access points does not result in the failure of the entire system. An example of this distributed system is AWS.

Many financial operator institutions are now looking to integrate DApps into their operation and the reason for this is not far-fetched—to reduce the number of third parties involved in the transactions ensuring the privacy of its users.

Unlike the traditional way, the applications in web3 are not run on a single server. Instead, the applications are built on blockchains, decentralized networks of multiple peer-to-peer nodes also known as servers, or a union of the two. These applications are what are referred to as DApps and are used frequently in web3.

When working with web3, you will notice there’s a constant reference to cryptocurrency and this is because of the huge role it plays in web3 protocols. The protocol takes on a number of duties including hosting, storage, and computing.

Some advantages of DApps include reliability, scalability, and increased efficiency brought about by the distribution of the load on the network.

The system is also more secure as there is no single entry source to take down the system.

NFT Storage: Decentralized vs Centralized

NFTs (Non-Fungible Tokens) are usually considered digital assets that are unchangeable and where the owners have full, unrevoked, and permanent ownership. But is it really so?

There are two ways to store NFT:

  • Decentralized

  • Centralized

Decentralized storage of NFT refers to the system where data is encrypted and stored in different locations.

In a decentralized system, no one has the access to the asset’s data except for the owner. The asset’s file is usually stored in several locations for added protection.

Decentralized data storage makes use of blockchain to monitor and observe the storage transactions.

The advantage of decentralization includes privacy and security. The data is also unchangeable.

In centralized storage of NFT, the digital asset is located in a centralized location, which can be a server, and where the sysadmin has complete control over the state of the NFT. This is so because most NFT platforms are centralized and so ownership of the NFT does not automatically translate to ownership of the digital asset it represents.

In a centralized system, there is a central authority that holds absolute control of the assets and can choose to update or change them at any time.

An example of this is a social media platform like Facebook where such control is exerted. Features could be changed, updated, or altogether removed. With the storage of NFT in a centralized platform, you run the risk of losing your collection or getting them tampered with.

After purchasing a token, the token itself gets stored in a decentralized way. But due to the size of the digital asset, it gets stored off-chan, i.e off the blockchain.


To sum up, NFT storage can be centralized and decentralized. Also, considering Web3 is already in the works, it’s only a matter of time before NFT storage becomes truly decentralized.

Assets will only be accessible to its owners. This will usher in a more liberal era of the internet – free of control from authorities.

About Arcana Network

Built for Ethereum and EVM-based chains, Arcana is the web3 infrastructure to easily onboard dApp users and enable user data privacy and ownership. Web3 developers use Arcana’s SDKs for a seamless, familiar user onboarding experience via social authentication and passwordless login. All user data is encrypted, secured with data access fully controlled by the users, and powered by blockchain.

Arcana has raised 2.7Mn USD from some of the leading investors and founders in the ecosystem such as Balaji Srinivasan, Founders of Polygon, Woodstock, Republic Crypto, and Digital Currency Group.

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Copyright © Arcana Technologies Ltd. All rights reserved.

Schedule a Demo

The call is completely free and no commitment is required.

Schedule a Demo

The call is completely free and no commitment is required.

Schedule a Demo

The call is completely free and

no commitment is required.