Non Fungible Tokens (NFTs) -Scaling Problems & a Solution
The mass adoption of Non-Fungible Tokens have the potential to revolutionize every market and every industry in the world. Anything and everything, both physical and non-physical items can all be tokenized. A picture, an apartment in a large building, a sound or song, a fraction of a video, or even a game piece can all be turned into a non fungible tokenized asset, opening the doors for intellectual property to be revolutionized in the burgeoning digital age.
Almost all the current implementations of Non-Fungible Tokens (NFTs) are either using the ERC-721 or the newer ERC-1155 standard. Well the problem is that both standards are built on the Ethereum Network, which as everyone knows by now is NOT a suitable scaling or cost effective solution for NFTs. Have you been waiting on ETH2.0 to launch your token? Yes, so has everyone else.
Another worry NFT developers have is the potential issue of Ethereum being able to be forked.
The bottom line with Ethereum is it is completely unsuitable for high volume token trading, as it lacks the required transactional throughput, as well it is completely not cost justifiable.
$.50 to $4 for gas (transactions) is just completely unacceptable and NOT scalable, in addition to the high gas cost you also have the unpredictability of gas cost, one transaction may cost $.50 usd and the next one will cost $4.00 usd. Even if ETH 2.0 is launched, it will not solve the fixed cost problem.
Hedera Hashgraph has created the “Trust Layer of the Internet”. If you have not heard about, well that is because it only launched in September 2019.
What exactly does it accomplish for the NFT space and offer that the rest of the DLT’s including Ethereum don’t ?
- Trust — The decentralized, diversified & limited-term 39 governing council members, who actual govern the public network are all very well respected organizations and enterprises. Some current example members include IBM, Boeing, LG Electronics, Google and many more.
- Scalability — Currently they have the network throttled to 10,000 transactions per second (TPS). Once justified TPS will be un-throttled. Infinite TPS are possible with sharding. For example, Ethereum is currently limited to about 12–15 TPS.
- Cost Justified — Transactions (Gas) cost are fixed at .0001 cents usd. Yes, that is 3 zeros. Having a fixed transaction fee in USD’s is a HUGE benefit to NFTs and is the only DLT in the market offering this feature.
- Decentralization — Nodes are currently permissioned and are being run by governing the council members. Publicly ran non-permissioned nodes will come online once all 39 council members are in place.
- Non-Forkable- the Hedera Network and its cryptocurrency (HBAR) have a no-fork guarantee. This means application builders can count on long-term confidence in the network.
Hello Future! All the above positive characteristics tell me one thing. Winner Winner, Chicken Dinner. It tells me that NFT developers finally have a workable, scalability and trustworthy network solution that they can count on to bring NFT’s into the mainstream.
Hedera has even gone so far as making it easy to migrate over your current NFT by setting up an ERC-721 Equivalent Contract for the Hedera Consensus Service over at Github.
Finally, Non Fungible Tokens are free to take over the world.