If you’ve minted NFT’s, chances are almost certain that your tokenization service uploaded your intellectual property to IPFS. Okay, so what the heck is “IPFS” and why does it matter?
“The InterPlanetary File System (IPFS) is a protocol and peer-to-peer network for storing and sharing data in a distributed file system. IPFS uses content-addressing to uniquely identify each file in a global namespace connecting all computing devices.”
Sound familiar? Let me give you an analogous definition…
“BitTorrent is a communication protocol for peer-to-peer file sharing (P2P), which enables users to distribute data and electronic files over the Internet in a decentralized manner.”
Heck, Wikipedia even says “IPFS allows users to host and receive content in a manner similar to BitTorrent.”
Anyone can sign up to run an IPFS node. And they do. Tens of thousands of people globally have downloaded the software and are happy to host (custody) your content on their personal computers.
Now, while this technology marvel sounds amazing to engineers and decentralization evangelists, it appropriately terrifies anyone who cares about the integrity of their intellectual property.
Remember that an NFT is really just a key that unlocks data in a filing cabinet (database). Eventually your personal health records, thanks to the CURES Act requiring hospitals, insurance companies and healthcare institutions to open their databases via API’s, will be unlocked via an NFT. Do you want your xrays, MRI’s, prescriptions, and other information stored on countless personal computers around the world? No, of course not. And the same goes for content creators; nobody wants their music, film, art, photographs, writings, games, real estate deeds, contracts or other intellectual property distributed across countless personal computers that are owned and operated by people who aren’t paid, aren’t supervised, and aren’t regulated.
Scary. And at the moment it’s pretty much the only option in the NFT world. Which is part of the reason that it’s still a bit too early for people who care about their IP to jump in and start tokenizing music, art, film, real estate, and other valuable content. Using a BitTorrent (er, IPFS) they are essentially just giving away the thing they’ve spent a career building.
So what’s the solution? Easy…ensure that the content your NFT unlocks is held at AWS or Azure by a regulated financial institution. Thus the data is in a resilient database system that is compliant with PCI, SOC2, HIPPA, and other security and privacy standards (read: Data Protection at AWS). And it is overseen by a trust company or bank such that it is SOC2 certified, staffed by professionals, subject to annual audits by the banking commissioner, as well as independent financial, security, risk, and BSA audits.
Using a “centralized” regulated custodian instead of a network of tens of thousands of unpaid “decentralized” custodians may not be cool, but it will protect your content.
Is the team at Fortress Blockchain Technologies building this solution and delivering it via API’s? Of course we are.
– Scott Purcell, Founder & CEO