Blockchain

Even among cryptocurrency enthusiasts, non-fungible tokens (NFTs) aren't the most well-known or understood piece of the decentralized ledger system. 
NFTs may seem abstract and difficult to understand, but many applications for these tokens make them essential in the crypto space and beyond. If you're unfamiliar with this type of token, you came to the right place as this post breaks down everything you need to know about NFTs! Give it a read and discover what NFTs are and how they relate to blockchain and cryptocurrency technology.

### What are non-fungible tokens (NFTs)?

Blockchain and cryptocurrency are two buzzwords that have been thrown around for a while now. Although NFTs combine both of these emerging technologies, there's still a lot of confusion about what exactly they are. Keep in mind that even though the NFTs are based on the same blockchain technology as cryptocurrencies, they are not a currency. So let’s get right on it and let’s see what Non-Fungible tokens actually are.

The term non-fungible refers to something that another similar object cannot replace i.e they can only ever be replaced by themselves — or not at all. And that is precisely what makes them unique.  **A non-fungible token (NFT) is a one-of-a-kind digital asset that represents ownership of physical or virtual items such as art, video clips, music, and so on.**  

Simply put, NFTs are digital proof of ownership for any given item. NFTs are securely recorded on a blockchain — the same technology that lies behind cryptocurrencies — ensuring that the asset is unique. To shed some light on the whole thing, let’s have a look at some of the examples of NFTs.

![Picture2.jpg](https://strapi.suprabit.eu/uploads/Picture2_45375cdc1c.jpg)
Source: [Instagram (@adamsackstoons)](https://www.instagram.com/p/CVK066CPshA/)

### Examples of NFTs

[Cryptokitties](https://www.cryptokitties.co/), [CryptoPunks](https://www.larvalabs.com/cryptopunks), [Rare Pepes ](http://rarepepedirectory.com/) are all examples of non-fungible tokens.  NFT was first introduced on the Ethereum blockchain protocol as a concept that allows you to mint and trade virtual assets that are unique, but now many other blockchains like Polygon, Cardano, or Kusama, to name a few, have also their own NFT implementations. 

Let’s have a closer look at Cryptokitties, digital cats that have unique genes. Think of them as crypto-collectables. Each is a one-of-a-kind digital asset built on Ethereum's blockchain and entirely owned by you. They can't be replicated, taken away, or destroyed. They can be, however, transferred from one digital wallet to another.

As defined by the Ethereum ERC721 standard, non-fungible tokens like Cryptokitties can be identified via a specific token ID - and only exist once within Ethereum blockchain. 

NFTs are today what football cards were back in the day - the latest collectables. While the latter was traded in person, NFTs are easily bought and sold online. Which, in turn, quickly made them a lucrative business. [The art world particularly profited from the sale of NFTs](https://www.nftsstreet.com/most-expensive-nfts-ranked/). Below are a few examples you probably heard about:

●	[Beeple](https://cryptoart.io/artist/beeple), a digital artist, sold the first purely digital work of art called "Everydays—the First 5000 Days" at Christie's for $69.3 million.
![Picture3.jpg](https://strapi.suprabit.eu/uploads/Picture3_42b577f7ff.jpg)
Source: [Wikipedia](https://en.wikipedia.org/wiki/Everydays:_the_First_5000_Days)

●	For $2.9 million, Twitter CEO auctioned off an NFT of his first tweet.
![Picture4.png](https://strapi.suprabit.eu/uploads/Picture4_aadbe91d09.png)
Source: [Twitter (@jack)](https://twitter.com/jack/status/20?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E20%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.cnbc.com%2F2021%2F03%2F22%2Fjack-dorsey-sells-his-first-tweet-ever-as-an-nft-for-over-2point9-million.html)

●	At Sotheby's first curated NFT sale, a CryptoPunk NFT was sold for $1.8 million.
![Picture5.jpg](https://strapi.suprabit.eu/uploads/Picture5_a062679f34.jpg)
Source: [Twitter (@Sothebys)](https://twitter.com/Sothebys/status/1402996062474760193?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1402996062474760193%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fmarkets.businessinsider.com%2Fnews%2Fcurrencies%2Fcryptopunk-nft-covid-alien-draftkings-sothebys-auction-fungible-token-2021-6)

●	$208,000 was paid for 20-second footage of LeBron James' "Cosmic Dunk #29."

### How do NFTs work?
To understand NFTs, we could look at fungible and non-fungible items from a financial perspective. Today, most people think of cash as fungible—if I give you a $5 bill and you give me back another $5 bill, nothing really changed in terms of value as all the 5$ bills are the same. We don’t care about the dollar bill as a paper-based physical item, we care only about its value.
In contrast, collectables and antiques provide value as individual units; these kinds of goods aren't interchangeable with others with similar or even the same features (like dollar bills). 
Non-fungible tokens work on blockchains like Ethereum, but they are totally different blockchain assets with different features. 

### How are NFTs used?

There are three main ways NFTs can be used: as collectables, for identity, and ownership. 

**Collectibles** are non-fungible assets that can be owned and traded on NFT marketplaces. 

**Identity** refers to non-fungible personal information about an individual or business, such as educational history or employment background. 

**Ownership** refers to the possession of a physical or digital asset represented by an NFT. By trading NFT you’re actually transferring ownership of those assets. This could include things like real estate, art, intellectual property, etc. 

As time goes on, we will likely see many more creative uses for digital NFTs.

### Difference between cryptocurrency and NFTs

Cryptocurrencies and NFTs both rely on the same blockchain technology. As a result, NFT markets may also compel customers to use cryptocurrencies to acquire NFTs. 
Cryptocurrencies aspire to function as currencies by holding value or allowing you to purchase and sell items. Cryptocurrency tokens are fungible, and comparable to conventional currencies like the US dollar. 
On the flip side, NFTs are tailored to generate one-of-a-kind tokens that may be used to demonstrate ownership and communicate rights over digital products.

### Online exchange and marketplaces to buy NFTs

[OpenSea](https://opensea.io/) and [Nifty Gateway](https://niftygateway.com/) are widely known marketplaces to trade NFTs. With a user base of close to 2 million accounts on OpenSea, it is by far one of the biggest marketplaces for NFTs at the moment. 

**Foundation**: Foundation happens to be an NFTs marketplace, and in order to join the platform, a user must be invited by another user who is already a member.

**Nifty Gateway**: This is an art-focused NFTs marketplace that works with athletes, brands, and creators.

**OpenSea**: When you want to mention one of the largest marketplaces for a wide range of NFTs collectables, you can think about OpenSea.

**Rarible**: If you're looking for an art-focused NFTs platform, Rarible is an ideal choice that rewards members with its own token - RARI.  

### Key takeaways

When you think of cryptocurrencies, your mind surely jumps to Bitcoin and other alt-coins. But blockchain is more than just digital currencies; it's a protocol for creating unique data sets within a network that are time-stamped, cryptographically secured, and immutable. 
In other words, it is also about taking physical assets—diamonds, Picassos, gold, and digital assets like artwork and turning all of them into non-fungible tokens (NFTs). NFTs can be stored on an Ethereum or a number of other public ledgers. Each token would be identified by a unique ID number and tied to everything from value to ownership rights. 
In the future, the idea is that you'll have NFTs representing everything from your passport, driver's license, game collectables, real estate ownership, you name it! So, is there any reason we shouldn't extend the concept of NFT beyond its borders? We think not! Stay tuned and wait to see what the Suprabit team has been working on.

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We want you to enter the world of non fungible tokens! A new type of blockchain based asset is taking some of the well established markets by storm. Find out why and what is our stake in it.

Non-Fungible Tokens (NFTs) Explained


## Motivation
Modern Smart Building Management solutions are fairly complex, comprising of a number of software modules supporting a variety of, often proprietary, protocols. When you add in all the front and back-end devices, automation stations, sensors and gateways, it can all seem like a real pain in the neck. But there is a clear economic benefit as functional smart building solutions are able to optimize energy consumption, provide better living environments and better security for building occupants, bringing your business closer to achieving that net zero goal. However, there are new issues regarding data security popping up every day, due to complexity, Internet integration and, more often than usual, slow adaptation to the newest technology stack. Traditional solutions relied on private networks where security was not such a big deal, but now, as every smart building solution provider offers Internet connectivity, the security paradigm changed. That left most solutions vulnerable to inside and outside attacks as well as data breaches. On the other hand, with the advancement of the Internet, many new use cases emerged that have the potential to significantly improve the ROI of smart building management solutions and enable more building automation in favour of building occupants and investors.  

This presents an obvious need to introduce a new data infrastructure layer to your solutions that will guarantee data security and data availability within a smart building management market. 

## Lavsa
Lavsa is a decentralized storage solution for smart building management, developed using blockchain and IoT technology. Our solution is taking in a stream of data and then replicating that data to every node in a private blockchain network. The newly added data sets are hashed and the hash is published on permissionless public blockchains like Ethereum, Polygon etc. By using blockchain(s) as an additional layer of security, we are improving integrity, immutability and availability. This is a step up from the traditional database model because, in Lavsa, every piece of data is distributed across a number of nodes and additionally hashed on a public blockchain, making it virtually impossible to fake, change or delete the data. At the same time, smart contracts are used to improve data relevancy, white and black lists and support new use case scenarios.  




![blockchain.svg](https://strapi.suprabit.eu/uploads/blockchain_77fbf6c69c.svg)





## Lavsa Goals
- Put the building data security, integrity and availability at the forefront of the Smart Building and IoT initiatives
- Establish trust among stakeholders of the building automation projects
- Enable higher level of automation
- Support integration with third-party building automation and business solutions
- Enable new disruptive business models 
 

## Lavsa Use Cases

Lavsa puts the data produced by a variety of smart building devices at the forefront of the Smart Building economy enabling new disruptive business models like 
- Data monetization and data markets
- AI solutions based on relevant building data
- Regulatory compliance
- Support for ESG initiatives 
- M2M payments
- Building Automation Infrastructure As a Service

If you have any questions regarding Lavsa, or if you are interested in discussing various Smart Building use cases - feel free to [contact us](https://suprabit.eu/contact) and let's give it a thought together.



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Back in 2018., the blockchain hype started to gain traction outside of the crypto scene and a number of enthusiasts proposed using blockchain for different business use cases. We had a vision to provide every party with relevant and tamper-proof data delivered by smart building sensors and devices. That data has to be so good that somebody wants to pay for it. Once you bought it, you want to have it ready at your disposal for further processing. And you want to be sure of its integrity.

Lavsa - a new kid on the Block

Development

Internship


**First thing first: the team and the brainy stuff**

Before starting the internship, I wasn’t really feeling nervous as I felt I had a good understanding of the basics of both Solidity and blockchain. Also, my colleague shared some insider information with me regarding the atmosphere, so I wasn’t surprised by the openness of the team and their willingness to help me and the other interns.
Firstly, we slowly studied the stack and the task itself. Then we got familiar and learned to work with the new blockchain technology that enables easier management of smart contracts. We were excited to start developing our own solutions!

Since blockchain is still a quite new technology, you can learn something new about it every day, as long as you know what to search for. Us interns were involved in the whole development cycle starting from the very beginning. First, we went back and forth researching the technologies and deciding which ones would be the best for this project and the internship, before deciding on Scaffold-ETH.

**You’ve heard it several times already: tHErE aRe No STuPid qUEsTioNs!**


![mulan-mushu.gif](https://strapi.suprabit.eu/uploads/mulan_mushu_9349847d61.gif)

 

Well, I’m going to say it again, there really are no stupid questions in Suprabit. Around here, everybody is eager to help each other, be it solving a bug or replacing the coffee pod. Don’t waste your time asking yourself “What will they think of me asking many questions or the same question many times?” because nobody will turn their back or roll their eyes at you. They all know the common goal is gaining understanding and moving forward.
 
The atmosphere is chill and most enjoyable. Once you've had enough of the keyboard tapping, you can make your way to our local table tennis station situated inside the office. Ask away, someone will surely join you! (Beware of the boss, you have to let him win, otherwise...).
 
 
**Future opportunities**

The internship program was well planned and adapted to students with or without previous knowledge of blockchain technology. The people were great, and I enjoyed the entire experience. I'm grateful for the things that I’ve learned during the internship and I'm happy that I was able to stay at Suprabit as an employee after the internship had finished. I know that Suprabit will continue to support my growth and make me a better blockchain developer (and a better table tennis player)!
 
![DSC00401-min.jpg](https://strapi.suprabit.eu/uploads/DSC_00401_min_4b49f3e364.jpg)



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This summer, I decided to spend my summer-break gaining as much knowledge on blockchain as possible. After a couple of hours of research, a few interviews and one solved solidity smart contract task, I landed my internship at Suprabit.

My Blockchain Internship at Suprabit!



## Introduction

In today's world trust is everything, but unfortunately, different parties, more often than not, do not trust each other. Therefore, it is crucial for one party to prove something to the other party - in that case, trust is not required, but only sophisticated mechanisms that would almost guarantee the truth. 

Data anchoring with Merkle tree when implemented correctly can make a zero-knowledge proof. To find out how, first you would need to get familiar with those three terms - Data anchoring, Merkle tree and zero-knowledge proof.

### Data anchoring

Data anchoring consists in creating a timestamped proof of existence for data and storing it to a tamper-resistant blockchain.

Key point is that having the data enables the recreation of the proof, but not the other way around. This way whoever is in possession of the data can verify if the data has been tampered with since its anchoring on the blockchain.


### Merkle tree

Merkle tree or hash tree is a binary tree in which every leaf is labeled with cryptographic hash of a data block, and every node that is not a leaf is labeled with cryptographic hash of the labels of its child nodes. 

![merkletree.png](https://strapi.suprabit.eu/uploads/merkletree_78340c824f.png)
Source: [Wikipedia](https://en.wikipedia.org/wiki/Merkle_tree)

Similar to data anchoring, with knowing all data blocks it is easy to construct a Merkle tree and find the label of the root node or simply called root hash (top hash), but it is not possible to find data blocks knowing only root hash. That is why Merkle tree is used in data anchoring where root hash is the proof that the data is stored onto blockchain.

Another key feature Merkle tree has is that it can be partially created with only subset of data and a receipt for that subset. It is important to note that only those who possess all the data are able to generate such receipts. For example: if we only have L1 and L2 data blocks from the picture above, and we have "Hash 1" inside the receipt, we are able to construct the left side of the Merkle tree with data blocks, and with "Hash 1" from the receipt we are able to calculate root hash.

### Zero-knowledge proof

Zero-knowledge proof is a method by which one party (the prover) can prove to another party (the verifier) that a given statement is true while the prover avoids conveying any additional information apart from the fact that the statement is indeed true. The essence of zero-knowledge proofs is that it is trivial to prove that one possesses knowledge of certain information by simply revealing it; the challenge is to prove such possession without revealing the information itself. - from [Wikipedia](https://en.wikipedia.org/wiki/Zero-knowledge_proof)

## How is it done?

Now that you have gotten familiar with these terms, I am guessing you got a hang of it - how could Merkle tree be used to achieve data anchoring and zero-knowledge proof? First, to anchor your data you would simply order your data blocks and construct a Merkle tree. It is important to arrange data blocks in deterministic order because later data blocks will need to be ordered exactly the same. The root hash of this tree has to be stored on a public blockchain and that is it - you anchored your data.

Second thing you want to do is to ensure you are able to recreate Merkle tree with only subset of your data blocks and an according receipt. You would have to write two algorithms - first algorithm, based on the subset of data blocks and all data blocks, creates the receipt for the subset; second one, given the subset and an according receipt, recreates the Merkle tree. First algorithm is used internally when you want to share a portion of your data, and second algorithm should be open source that would be used by the receiver of the data to verify whether the data has been tampered with since its anchoring.

## Conclusion

Data anchoring is useful mechanism that finds its applications in various industries. There are a lot of ways to implement data anchoring, but in our case we used Merkle tree to do so. Merkle tree is a binary tree in which leaf nodes are labeled with hash of data blocks, and each non-leaf node is labeled with hash of its child nodes. Hence, Merkle tree algorithm can create a single hash (root hash) out of multiple data blocks. Also, root hash of a Merkle tree can be recreated either with all data blocks it contains, or with a subset of the data blocks and an according receipt. 

Data anchoring using the Merkle tree algorithm creates the ability to prove certain data is valid without sharing all the data. This makes it zero-knowledge proof.


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Find out what data anchoring is and why is it beneficial. This article will teach you basic principles and simple usage so you can start thinking of ways to apply data anchoring in your business.

Data anchoring and verification using zero-knowledge proof

## Introduction

In our introductory [NFT blog post](https://www.suprabit.eu/article/nfts-explained), we explained what NFTs are and what they are used for. In the meantime, we delivered [Suprabit Giant NFT](https://opensea.io/collection/suprabit-giant-nft) to our business partners and employees and hopefully opened a new era of NFT corporate gifts 👍. <br/>
Suprabit Giant was a small but very interesting project that included a digital artist, full-stack and blockchain devs, a business developer, and a legal officer who jointly delivered a unique experience to our partners.

This post will help you get into the technical details of the Suprabit Giant implementation. 

## NFTs

As a quick technical introduction to NFTs, we will compare fungible and non-fungible tokens with simplified pseudocodes for the most basic functions, keeping track of the account balance, adding funds to the account, and removing funds from the account. In the examples below, fungible tokens are on the left, and non-fungible tokens are on the right. Notice how we don’t distinguish individual fungible tokens on the left - we store balance as a number, while with the non-fungible tokens on the right, the balance of an account is defined as a collection of token ids - each token has its unique id. Transferring fungible tokens means just decreasing the sender’s balance, and increasing the receiver’s balance. Meanwhile, transferring non-fungible tokens means removing specific tokens from the sender’s collection and inserting them into the receiver’s collection.

<table style="font-size: 0.75em; display: flex; justify-content: center;">
<tr>
<td style="max-width: 50vw;">

```js
// Account balance - integer
account.tokens = 100;
// Add 10 funds
account.tokens += 10;
// Remove 10 funds
account.tokens -= 10;
```

</td>
<td style="max-width: 50vw;">

```js
// Account balance - set of token ids
account.tokens = [1, 3, 100, 200];
// Add tokens with id 99
account.tokens.insert(99);
// Remove token with id 99
account.tokens.remove(99);
```

</td>
</tr>

<tr>
<th>Fungible Token</th>
<th>Non-Fungible Token</th>
</tr>
</table>

<br/>

## ERC721

[Ethereum Improvement Proposals](https://eips.ethereum.org/) (EIPs) describe standards for the Ethereum platform, including core protocol specifications, client APIs, and contract standards. Among EIPs there are Ethereum Request for Comments (ERCs) which tackle application-level standards and conventions.

[ERC721](https://eips.ethereum.org/EIPS/eip-721) introduces a standard interface for the implementation of an NFT smart contract. It defines a set of methods that each smart contract needs to implement to be ERC721 compliant. Below we can see the simplified ERC721 interface, this is not a full ERC721 interface, we only extracted a few basic functions.


<table style="font-size: 0.75em; display: flex; justify-content: center;">
<tr>
<td style="max-width: 90vw;">

```solidity
/// @title ERC-721 Non-Fungible Token Standard
/// @dev See https://eips.ethereum.org/EIPS/eip-721
///  Note: the ERC-165 identifier for this interface is 0x80ac58cd.
interface ERC721 /* is ERC165 */ {
    /// @notice Count all NFTs assigned to an owner
    /// @dev NFTs assigned to the zero address are considered invalid, and this
    ///  function throws for queries about the zero address.
    /// @param _owner An address for whom to query the balance
    /// @return The number of NFTs owned by `_owner`, possibly zero
    function balanceOf(address _owner) external view returns (uint256);

    /// @notice Find the owner of an NFT
    /// @dev NFTs assigned to zero address are considered invalid, and queries
    ///  about them do throw.
    /// @param _tokenId The identifier for an NFT
    /// @return The address of the owner of the NFT
    function ownerOf(uint256 _tokenId) external view returns (address);

    /// @notice Transfers the ownership of an NFT from one address to another address
    /// @dev This works identically to the other function with an extra data parameter,
    ///  except this function just sets data to "".
    /// @param _from The current owner of the NFT
    /// @param _to The new owner
    /// @param _tokenId The NFT to transfer
    function safeTransferFrom(address _from, address _to, uint256 _tokenId) external payable;

    /// @notice Transfer ownership of an NFT -- THE CALLER IS RESPONSIBLE
    ///  TO CONFIRM THAT `_to` IS CAPABLE OF RECEIVING NFTS OR ELSE
    ///  THEY MAY BE PERMANENTLY LOST
    /// @dev Throws unless `msg.sender` is the current owner, an authorized
    ///  operator, or the approved address for this NFT. Throws if `_from` is
    ///  not the current owner. Throws if `_to` is the zero address. Throws if
    ///  `_tokenId` is not a valid NFT.
    /// @param _from The current owner of the NFT
    /// @param _to The new owner
    /// @param _tokenId The NFT to transfer
    function transferFrom(address _from, address _to, uint256 _tokenId) external payable;
}
```
</td>
</tr>
</table>
<br/>

But why is this even important for us? Can’t we create our own NFT smart contract without any fuss with standards? In theory, we can, no one forces us to be ERC721 compliant, in practice, a short answer - no. Now for the long answer, we need to enable interoperability between our NFT contract and other applications. A primary example of this interoperability is a wallet application. The general expectation is that users can see and manage their tokens in their wallet application - this is generally a mobile app. A wallet application can check which tokens the user owns only by reading the NFT smart contract directly. Now imagine what would happen if every NFT smart contract was implemented differently - a wallet application would need to develop an interface for each smart contract which doesn’t make sense. This is why we accept ERC721 and other EIPs and implement smart contracts accordingly. Any application can integrate with our NFT just by fetching the address of our smart contract as everything is publicly available.

Now that we have a better understanding of what we need to implement it’s a good time to introduce OpenZeppelin, an open-source library of standardized smart contracts that were developed following best security practices, and are extensively audited. Within the library, we have an implementation of the basic ERC721 compliant smart contract which tackles all the standard functionality of the NFT, minting, fetching balance, transferring, etc. As smart contracts are object-oriented, we can just inherit OpenZeppelin’s basic ERC721 contract and extend it with our business logic that is specific to our NFT.

At this point, we have a smart contract with basic NFT functionality - we have the tokens, but what differentiates them? Where is the uniqueness, the praised non-fungibility? This is where the token metadata comes into play, and if we consult the ERC721 interface we can spot the metadata extension which describes a way to attach metadata to the contract and each token individually. This allows us to attach some assets to tokens, like images, videos, and other media, or data in general. Below you can see the interface of the metadata extension. The main function here is the tokenURI which allows us to specify a distinct URI for a specific token. The idea is that the tokenURI points to a JSON file that contains all the metadata related to the specific token.

<table style="font-size: 0.75em; display: flex; justify-content: center;">
<tr>
<td style="max-width: 90vw;">

```solidity
/// @title ERC-721 Non-Fungible Token Standard, optional metadata extension
/// @dev See https://eips.ethereum.org/EIPS/eip-721
///  Note: the ERC-165 identifier for this interface is 0x5b5e139f.
interface ERC721Metadata /* is ERC721 */ {
    /// @notice A descriptive name for a collection of NFTs in this contract
    function name() external view returns (string _name);

    /// @notice An abbreviated name for NFTs in this contract
    function symbol() external view returns (string _symbol);

    /// @notice A distinct Uniform Resource Identifier (URI) for a given asset.
    /// @dev Throws if `_tokenId` is not a valid NFT. URIs are defined in RFC
    ///  3986. The URI may point to a JSON file that conforms to the "ERC721
    ///  Metadata JSON Schema".
    function tokenURI(uint256 _tokenId) external view returns (string);
}
```
</td>
</tr>
</table>
<br/>


Below is the example of the token metadata in JSON format, tokenURI should point to this data. In this example we modeled an NFT for a football player card, the metadata contains a URL to an image of a player, and a couple of attributes assigned to the token. Observant among you may have already noticed a link to an image hosted on the hns-cff.hr domain,  oh no. It’s completely valid to question the integrity of our NFT at this point, we promised you full control of your NFT, but then you find that someone else has full control of the essential part of the NFT - the digital asset it encapsulates. What happens when the owners of the hns-cff.hr domain decide they don’t want to host the image anymore a few months or even a few years after you received the NFT? They have the full right to do so, they don’t have any incentive to continue hosting the image for free. The NFT without the digital asset becomes just an id assigned to you in the smart contract, practically useless.

<table style="font-size: 0.75em; display: flex; justify-content: center;">
<tr>
<td style="max-width: 90vw;">

```json
{
    "name": "Luka Modric",
    "image": "https://hns-cff.hr/files/images/luka-modric.jpg",
    "attributes": [
        {
            "trait_type": "country",
            "value": "Croatia"
        },
        {
            "trait_type": "kit_number",
            "value": 10
        },
        {
            "trait_type": "position",
            "value": "midfielder"
        },
        {
            "trait_type": "captain",
            "value": "true"
        }
    ]
}
```

</td>
</tr>
</table>
<br/>


You might wonder why don’t just store all the metadata in the blockchain? Storing data in the blockchain is expensive, storing just 1MB of data to the Ethereum blockchain costs roughly 4 ETH which is, at the time of writing, equivalent to roughly $13,000. We won’t dig deeper into what is the reason behind this, but for anyone interested, a description of the Ethereum Virtual Machine (EVM) and its opcodes might be a good starting point. Nevertheless, don’t worry, we won’t stop here, there is a solution for the issue, this is where IPFS comes to save us.
<br/>

## IPFS

InterPlanetary File System is a protocol and peer-to-peer network for storing and sharing data in a distributed file system. It doesn’t sound like something that would solve our issues, but IPFS uses content-based addressing as opposed to location-based addressing which is a standard on the web today. If we look at the standard URL, let’s take an URL for the image of our football player as an example. Location-based addressing strictly defines on which domain is the image hosted, and where exactly is the image stored on that domain, in our example the domain is hns-cff.hr, and the image itself is located in the directory files/images/. Any change in either the domain name or the directory structure would result in this URL becoming invalid, alongside our NFT that depends on it.

![URL Example](https://strapi.suprabit.eu/uploads/URL_example_7209f2a836.png)


On the other hand, IPFS takes a completely different approach. As its name already says, content-based addressing addresses files based on their content. Imagine if the URL address for the image would be the hash of the image, it wouldn’t be convenient for humans as the URL wouldn’t be readable, and the links would be error-prone. But in our case we would greatly benefit from content-based addressing as we wouldn’t be vulnerable to any domain or directory changes, as long as someone has the original file, the URL can be resolved. Let’s try to check what would an IPFS URL look like. Content identifier (CID) is based on the hash of the file so for simplification, we can think of it just like a hash. A consequence of the CID is that any change in the file’s contents results in a different CID, which means that the file we are addressing with an IPFS URL is immutable. The file itself can be updated, but that would also update the CID so the original IPFS URL will point to the old version of the file. This is a great property for our use case, with IPFS CIDs we get addressing that preserves the integrity of the content.

![IPFS URL Example](https://strapi.suprabit.eu/uploads/IPFS_URL_1a3c9c8b76.png)

As IPFS is also a distributed file system, multiple peers in the network can host the same file, as the CID of the file would be the same there wouldn’t be any integrity violations. Multiple peers hosting the same file would only help others retrieve the file. If we try to retrieve the file from the peer that doesn’t have a file with that CID locally present, the peer will query neighboring peers if they have a file with that CID - this query propagates through the network until the file is found. A consequence of a peer-to-peer system is that the query for a file can take a long time to resolve as we need to propagate through the network until we find a peer that hosts this file.

Ok, now we know how to immutably address the metadata, but did we solve the issue if the original author stops hosting metadata? At least one peer in the IPFS still needs to host this file if we want NFT to work properly? True, at least one peer needs to host metadata for NFT to function, but now we at least have the ability to host data ourselves which is surprisingly easy as multiple cloud services offer us IPFS storage service - some of them even have free tiers that are more than sufficient to accommodate the storage of NFT metadata. This property comes from the fact that the metadata is not hosted by some server behind a domain, rather it’s hosted on IPFS, any IPFS peer should be able to find this file if at least one peer in the network hosts it.

You might be confused by some IPFS URLs looking like the example below. This link represents an HTTP gateway of an IPFS peer - ipfs.io in this example, it allows us to access IPFS files from the browser. You might wonder, didn’t we return to the beginning as we still need to use the HTTP gateway of some peer - what happens if that peer stops working? This is the exact reason why it’s strongly recommended to address IPFS files using ipfs://<cid> URL format as this allows consumers of that link to use any peer they want to access that file. We can even specify a list of IPFS peers that we use, so we have alternatives if one peer stops working.

<img alt="IPFS Peer Gateway" src="https://strapi.suprabit.eu/uploads/IPFS_peer_gateway_URL_779096ba1d.png"  height="70"/>


All in all, IPFS solves our issue of storing and linking metadata. Before deploying a smart contract we need to generate metadata, and media assets that will be linked with NFTs so that we can configure what the tokenURI method of the NFT returns. Below is the example of our metadata for one of our NFTs, we followed [OpenSea’s metadata format](https://docs.opensea.io/docs/metadata-standards#metadata-structure).

<table style="font-size: 0.75em; display: flex; justify-content: center;">
<tr>
<td style="max-width: 90vw;">

```json
{
    "name": "Suprabit Giant #0",
    "description": "This Suprabit NFT represents one of 100 unique frames of Suprabit Giant digital artwork.",
    "image": "ipfs://bafybeigp6cki2w7v26coqecxa5iohadhjg345n5b7ukkesbvq3kqeguvs4",
    "animation_url": "ipfs://bafybeig77wew3xfhejgatekmah5t46btoeteugaa2maynicyctl4zxwp6m",
    "external_url": "https://suprabit.eu/nft/giant/0",
    "attributes": [
        {
            "display_type": "boost_number",
            "trait_type": "Mobile",
            "value": 5
        },
        {
            "display_type": "boost_number",
            "trait_type": "IoT",
            "value": 10
        },
        {
            "display_type": "boost_number",
            "trait_type": "Blockchain",
            "value": 4
        },
        {
            "display_type": "boost_number",
            "trait_type": "AI",
            "value": 25
        },
        {
            "display_type": "boost_number",
            "trait_type": "Cloud",
            "value": 9
        },
        {
            "display_type": "boost_number",
            "trait_type": "Table Tennis",
            "value": 47
        }
    ]
}
```

</td>
</tr>
</table>
<br/>

The next step is to pick a blockchain network to where the NFT smart contract will be deployed to. As we used ERC721 which is an interface for Solidity smart contracts, we need to choose a network that supports Ethereum Virtual Machine (EVM). Naturally, Ethereum is the first network to be considered, but at the time of writing Ethereum’s high transaction cost due to high network traffic is not suitable for our case. Polygon is a few orders of magnitude more efficient than Ethereum at the moment so it was an easy decision to select it over Ethereum.
<br/>

## Minting

Lastly, we need to figure out an easy and intuitive way for users to claim their gifts. This is a hard task as the blockchain ecosystem introduced a new way of interaction with online services which is fairly complex for new users. We have to anticipate that a majority of users won’t even have a crypto wallet so we need to guide them through the whole process, not just the interaction with our smart contract. We utilized WalletConnect to help us connect users’ wallet applications with our NFT website where users redeemed their gift NFTs. The last thing we needed to do is to actually create and assign NFT to the user, this process is called minting. In order to mint the NFT, we need to call the smart contract and pass the token id we want to mint, and the address of the owner’s wallet. This operation is packed into a transaction that will require a small fee in order to be executed on the blockchain. As NFT is a gift we wanted to handle all minting fees ourselves which is why we created a small minting service that mints NFT at the user’s request - of course, we had to protect this service against unauthorized requests.

Along the way, we stumbled upon a hurdle of connecting a user’s wallet to the Polygon network which at the time of publishing NFT had to be manually configured in the wallet application, and this hurt the user experience a bit. Fortunately, this won’t be the issue for so long as there is already a [standard proposal](https://eips.ethereum.org/EIPS/eip-3085) that should fix this issue - the wallet applications just need to implement support for it.
<br/>

## Conclusion

To wrap it up, we successfully launched our first NFT and delivered it as a gift to our business partners and employees. It was awesome to hear positive feedback regarding the user experience of redeeming the NFT as we invested a lot of time to make it as easy, and as intuitive as possible. The general idea behind the gift was to give people first-hand experience with blockchain and introduce them to the concept of NFTs and help spark their ideas for NFT use cases. 

If you have any questions regarding this project, or if you are interested in various NFT use cases, and where can it be used in your field of work - feel free to contact us and let us give it thought together.



Non-Fungible Tokens (NFTs) Explained

Lavsa - a new kid on the Block

My Blockchain Internship at Suprabit!

Data anchoring and verification using zero-knowledge proof

Making of Suprabit NFT Giant