Decentralization lies at the heart of crypto, its benefits plainly desirable in a multitude of areas. But, how much of crypto ought to be decentralized? Is it possible to have an entirely trustless industry? Would we want it to be? And are all NFTs really decentralized in the first place?
Token Gamer and NFT Insider have decided to combine forces to launch a WAX-centric, weekly podcast, WAX Lyrical. John Nichols of NFT Insider and I will discuss a new topic every week, as well as feature special guests in the near future. If there’s a topic you’d like us to cover, make sure you let us know through the Token Gamer Discord or Twitter, or the NFT Insider Discord or Twitter.
In last week’s episode, John and I had a special guest, Michael Rubinelli, Head of WAX Games Studios and one of the key figures in the development of Blockchain Brawlers. This week, we turn our attention to a broader subject after OpenSea made a misstep or two and raised some questions for the long-term of crypto.
Episode 14: Are NFTs Really Decentralized?
Decentralization was a vague term to me before I joined crypto some years back. It still can be wildly confusing and is applied loosely in the industry. In crypto, decentralization typically refers to power or control moving from a centralized entity (a person, a company, a group, and so on) to a distributed network.
Networks tend to be centralized, in which there is (for all intents and purposes) a single point of failure and control; distributed, in which the information is spread across multiple data points; or decentralized where it is distributed but without a central controlling entity.
The benefits of a decentralized blockchain are many, with transparency and trustlessness being somewhere near the top, but what about when it comes to major players within crypto? The community as a whole shuddered at the thought of Zuckerberg’s Meta taking over and controlling the space, but there will always be frontrunners.
OpenSea made a rather large misstep recently by imposing several limitations on creators, which after severe backlash, they reversed in under 24 hours. But, it served as an important reminder that while much of crypto is decentralized, the organizations running it aren’t, and it’s unlikely they could be. So, as we vet projects and collections within blockchain gaming and NFTs, we must also assess marketplaces and exchanges by the same standard. That is, do you trust the marketplace you are using, and can you see the direction they are going?
Then there is the question of whether the NFTs we buy and sell are even truly decentralized to begin with. A common criticism of NFTs is that you are simply buying a digital receipt to say you own an image (for example) and that the image itself isn’t on-chain. William Quigley, co-founder of WAX, has been chanting the mantra of “not IPFS, not your NFT” for some time. In that, if the media — the NFT itself — is managed by a private server, in what way is it decentralized?
John and I tackle this difficult subject and more in this week’s episode, with a slight tweak in format!
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