NFT stands for non-fungible token. Unlike money which is highly fungible down to a unit of cents, the beauty of an NFT is that it represents one whole unit of account and that unit of account can also be pre-programmed by the creator.
There are lots of resources out there on what NFTs are, but I particularly like Jesse Walden of Variant Fund’s framing as shared in “NFTs make the internet ownable.” A short clip from his excellent blog post sums NFTs up well:
NFTs make it possible to own digital media assets in the same way that you can own a digital currency asset, like Bitcoin.
The Hiro team has always been invested in building a user-owned internet, and the rise of NFTs on Ethereum and Flow have been proving this thesis out. With Hiro’s narrowed focus on developer tools and apps, there’s opportunity to address some of the challenges to minting NFTs on existing Layer 1s. Minting NFTs can be costly and introduce scaling challenges, as we saw with the early Cryptokitties experiments.
That’s part of the reason why the Stacks chain is built the way it is — as a layer one blockchain connected to Bitcoin. Stacks transactions are cheap and scalable, and metadata for transactions and associated ownership settle on the bitcoin blockchain. Bitcoin is the source of truth for Stacks transactions, and Stacks present a secure and cheap alternative for minting NFTs in comparison to blockchains such as Ethereum.
NFTs on Stacks 2.0
Examples of Clarity contracts to mint NFTs include radicleart’s contract Minting Non Fungible Collectibles Contract and Friedger’s clarity contract Clarity Marketplace which allows people to trade NFTs.
NFTs in any ecosystem must decide how to handle on-chain metadata as compared to off-chain metadata. For most NFTs, it is recommended that the images themselves are not stored on-chain but rather ownership credentials specifically are stored on-chain instead.
Dialing in a bit further here, on-chain metadata permanently resides with token, and changes with on-chain logic. Most projects store most data off-chain, with some indication of TokenURI that provides additional information for the NFT.
As an example we’ll walk through an NFT minted on Boom.money. You can see the contract on the Stacks explorer. Off-chain metadata for the token on Stacks is stored in AWS and centralized, but in the future can be decentralized and stored on Stacks decentralized Gaia storage. The TokenURI in this instance leads to the image URL and the image itself is not stored on-chain. In this instance, the fact that I am the creator of the token and thus ownership by my address are stored on the Stacks chain and included in the Bitcoin blockchain as well via a hash as shown under the “Bitcoin anchor” section as seen in the Stacks explorer. Also note, it cost me 0.000575 STX to mint this NFT. At today’s STX price of $1.29, that is $0.0007 cents!
The other cool thing about NFTs minted on Stacks is that there may be a world in which NFTs could interplay with Stacks token lockings and Stacking, where both the creators and owners of an NFT could potentially participate in Stacking rewards and earn bitcoin while holding a token as well. While that concept is still in the idea and scoping phase, highlighting it as another possible feature of building on Bitcoin, powered by Stacks. The Boom team just released an exciting announcement on Stacking NFTs on Twitter as well.
The Stacks NFT Ecosystem
NFTs on Stacks are live today, and interested developers and creators should look into both Boom.money and Clarity smart contracts, as shown in the Stacks docs. Stacks 2.0 went live with all of the features of Smart Contracts only ~8 weeks ago, and we’re still in early days of ecosystem development.
Liquidity, network connectivity, and community are serious considerations for creators looking to deploy NFTs on any network. The Ethereum ecosystem has developed over the past years offers many wallets to choose from and compatibility for those looking to move, swap or trade NFTs. It’s awesome to see our friends at OpenSea (link) in the spotlight after years of hard work and building.
From the Hiro perspective, we continue to want to solve for cost and scalability issues we have seen in other networks, and grow a robust solution that can serve creators and bitcoiners alike more natively in the bitcoin ecosystem. Encouraging NFT development furthers both the Hiro team’s and Stacks ecosystem dream of the future user-owned internet.
NFTs on Bitcoin
We’re often asked what would happen to Stacks if something happened to Bitcoin. Jude, core Stacks blockchain contributor succinctly answered this question earlier:
If something happens to Bitcoin, then it’s quite likely that open-membership p2p blockchains as a general model for distributed computing will be shown to be non-viable. Something that can kill Bitcoin can almost certainly kill any other open-membership p2p system.
Muneeb added the following context:
PoX consensus can theoretically work on other proof of work blockchains as base layer but realistically if Bitcoin breaks then several other PoW chains will also break. Theoretically you can use any stable PoW chain as base layer. Bitcoin by far is the best and most secure option.
Dialing in here, blockchains are only as strong as 1) their design and 2) their network participation. It has taken nearly a decade for us to get to record levels of bitcoin all time highs. The state of the Bitcoin network today has taken the culmination of years of interplay between Bitcoin miners, users, educators to get to this point.
Bitcoins total hash power has been growing exponentially since 2010. Per this Coindesk article “What does hashrate mean,” hashrate is the total computational power to mine and process transactions. Bitcoins network capital and hash power are combined forces that make the network more resilient to attack than any other network.
Lastly, Bitcoin’s network is the most battle tested. Other consensus mechanisms could theoretically be more secure, but you couldn’t say that without more of a test of time (and incentive to attack).
There is >$1 trillion dollars of capital in bitcoin. Bitcoin has proven itself as a store of value protocol, but the next phase in its evolution is using it as a secure base layer for development and enabling unique business models on top of bitcoin. Enter the Stacks ecosystem and developer tools built by Hiro, and the possibility for creators to mint NFTs backed by Bitcoin.
- Advanced Clarity Smart Contract Examples
- Stacks documentation https://docs.blockstack.org/
- Developer Discord: https://discord.gg/C8ycHu4
Have questions about NFTs on Stacks? Please comment below!