File storage for NFTs, data, operations, etc. A new backbone for off-chain storage and operations


I’ve been kicking this idea around for a while and I think there is a lot of merit to it. I don’t have the technical skills to build such a system, but wanted to throw the idea out there and highlight some of the challenges I see with it.

One issue with NFTs is where the image files are stored and how they are accessed. In effect most NFTs are truly just a unique code which gets traded around and part of that may include a URL or link which points to a file such as an image.

Charle’s has talked at length about the IP issues and the lack of true ownership in terms of control over an NFT in one’s wallet having no relationship in any jurisdiction with ownership of a given artwork or other thing an NFT unique code points out, such as a ticket to a concert.

I’m not addressing that topic, though I think at least having a distinct and sacrosanct location where that item actually is stored would help in those legal processes and concerns. Far better than what we do now where an NFT only gives ownership of unique code which is no more than a finger pointing at ‘something’ which you do not control.

Beyond that, there is the core issue of what most of us know well across the internet. Broken links and changed content at a given link. You may own an NFT and it may point towards some database or URL where an image is located, but who controls that database or website? Might they readily swap out that image or simply delete that entry?

It would be like showing up to the Louvre to see the Mona Lisa and some other painting is there instead…your NFT just points to that location in a Museum which you don’t control. An NFT is more like a geographic coordinate…but if you don’t own the land there, then whoever does could make changes to that location.

Most NFT oriented projects aim to host servers on Amazon or Google and run some sort of centralised group using some coin sale or fee model to obtain a percentage of the value each time an NFT is bought or sold or is traded on their marketplace.

But is this sustainable, is it decentralised, is it good enough? I think not.


My idea, which has probably been pondered by others before, is to develop a truly decentralised system for file storage and functional database services to run code which is accessible online.

This would support NFTs and operate as a backbone for many other projects who need to run code of some kind on a server plugged into the internet. Otherwise we’re just trading around unique codes on-chain which go out to some centrally controlled off-chain operation. Is there a way we can link on-chain execution of code into off-chain operations?

I’m imagining some decentralised network of server space and code running operational capacity where in a decentralised way anyone can join the network offer up the storage, bandwidth, and processing power this network needs. They’d have a node model and be paid out in fees for a novel coin created for this ecosystem. Others would pay that fee in order to create items for storage or to run code.


Now I see a few very big problems with this concept.

Redundancy would be an issue and what would it mean to store a file on a random server running in one person’s bedroom? That’s not good enough, so there would need to be some level of redundancy for file storage with multiple copies of the same item or multiple snapshots of the network being stored - basically we’d face all of the issues a regular server operator has in terms of redundancy and scaling up to demand, plus a few more caused by decentralisation.

But the advantage is you’d gain true ownership and reliability which is not tied to a single company. Would it be competitive? Could a network of small and probably slow servers really compete with the advantages had by big centralised server farms run by companies using specialist hardware and bulk discount prices when they buy equipment? I don’t know.

Longevity is also an issue, and if we were to host NFTs and processes for our businesses in such a network and it goes down or the coin supporting it goes to zero or low enough that server space is lost…then what? Our files are gone? Our websites shut down? Mind you the same is true of centralised groups as well, Amazon AWS could shut down tomorrow and everything there could be lost. Still…tying this to a coin and aiming for decentralisation might have worse outcomes than just having devs host everything on google or amazon servers.

Code does not stand still and looking at database models and computer science from even 10 years ago makes one think that it would be a big mistake to lock in any given storage or operational system. Charle’s talks about this often as a key downside to fully decentralised or DAO run operations when they are truly headless, they can only lead to stagnation unless they hit a critical mass of engaged users, are well designed, etc. and still they’ll be weaker than a centralised operation.

To combat this, I think such a system would have to be a mix with a centralised group operating to update code, servers, capabilities, etc. Essentially how Cardano is organised right now with a company which tends a decentralised network. There would be some relationship and fee sharing or treasury/fees system between that organisation and the node operators who provide the server space.


I’m not sure if you know it, but the project Theta and Theta Labs are doing something like this with a focus on bandwidth for video hosting and processing video formats, but I don’t think they’ve done much of anything in terms of file hosting which is still centralised and they are very B2B focused. Still they show how this model could work with servers all over the world, or Edge Nodes in their case, who provide bandwidth and some computation in exchange for the Tfuel coin on their network. They claim to offer bandwidth and file processes to give 1080,720, 480, etc. reprocessing of original video files for around 1/10th of the costs which Youtube or Netflix experience to do the same.

Anyhow I could pontificate a bit more, but I’ll leave it here as I think I’ve covered the key concepts.


In summary the idea is to have a decentralised network which operates as a backbone for files and processing capacity which anyone can plug into and anyone can use. This would solve one of the big issues/dependencies of NFTs and other computation heavy processes which are all run off-chain at the moment on Amazon or Google servers in most cases.

It would be some sort of Frankenstein combination of Theta, Filecoin, and Singularity AGIX’s systems where a need and interface exist to purchase storage, processing, and server bandwidth functions as a service.

In a near future where we want to use NFTs in some zero knowledge Midnight privacy side chain on Cardano and we will rely on these tools in the future for our passports, driver’s licenses, and online identity for all sorts of purposes from getting loans to entering age restricted physical locations, etc. It would be good if those off-chain components were run through some on-chain controlled coin and set of rules. Likely this whole thing would be its own Cardano side chain to control fees and give the flexibility needed to do all of this.

It just makes sense to me that we are going to need a permissionless and decentralised solution for where all that information is stored when it is too big to be on-chain or is not static information such as one’s credit score for loans or updates to the expiry date of some government ID or a new picture of yourself to go alongside that ID.

This solution faces many issues and would require a lot of innovation to build such a system, but it seems something like this will be necessary if we are to ever get away from extremely centralised transnational companies running and hosting all of our services.

We may be nothing more than a fancy ledger and glorified ledger-finger which points at servers which we do not control. Self-custody or ownership of any digital asset not stored on-chain would basically be a falsehood where we just have to hope that Open Sea and Amazon faithfully store our pixel art jpegs or our essential identity documents and that they never peek at those IDs or other membership/subscriptions in order to sell advertisements to us or figure out who to disappear for wrongthink.

In many ways, we would never truly escape from or surpass the innovative ideas of Satoshi with Bitcoin where the ledger is the only thing we can say we truly own and everything else is off-chain in some trusted non-crypto company. So far we really haven’t done much more than that in terms of the ownership and centralisation fundamentals of on vs off chain.

I hope something like this idea comes to fruition and already many attempts along these lines are being made with parallel or partial concepts such as filecoin or theta. I just don’t think those projects go far enough, but even something like a filecoin solution for NFTs would be an improvement. For Cardano or for any blockchain.

Whoever makes a solid filecoin type system for CNFTs will also make a fortune, alongside an essential service we need for crypto and true zero knowledge backend file storage systems for anything too big to be on-chain. Or maybe this isn’t an issue at all with encrypted servers and I have no idea what I’m talking about! That’s also possible.

But beyond the technical aspects of encrypted files, when you really think about who owns, controls, and can shut down those servers, even if they can’t read what is on them…I think there is room for what I’m talking about.

Cheers if you made it to the end! And thanks for reading.

Hi there @Cardanoisgreat,
have you checked out they are building what you have discussed.