Ryoji Kashiwagi
NRI
Expert Researcher
NFTs’ functionality and structure
NFTs are one-of-one (nonfungible) tokens minted on a non-falsifiable blockchain. Endowing a digital asset with nonfungibility ensures the asset is uniquely identifiable. Meanwhile, NFTs’ transaction history is preserved on a non-falsifiable blockchain as proof of the transactions’ authenticity.
NFTs have a multilayer nested structure1) (see diagram). The first layer contains information about the tokenized digital content itself (e.g., artwork, video clip or other collectible). The second contains the layer-one information plus registration information that points to where the layer-one data is stored. The third layer stores metadata pertaining to the NFT, together with the registration information. The fourth contains index data stored on a blockchain, in addition to the metadata layer. The key point is that only the index data is stored on chain (i.e., on a non- falsifiable blockchain) while the other three layers of data are stored off chain.
Want to keep reading?
You are trying to access premium content, currently reserved for Qorus members only. See all the benefits of joining the world’s leading peer-to-peer intelligence organization in financial services.
