Compressed NFTs (cNFTS) are not NFTs - NO, Because NFTs Aren't Diamonds

Solana to Launch State Compression: Store 100 Million NFTs for Only $1193

^{100 Million NFTs for only $1193? Really? That's your marketing ploy for this centralized shit?}

First Things First, What Are cNFTs?

Compressed NFTs, or cNFTs as they're called, are NFTs that are stored using the Merkle tree structure, where one NFT is the Merkle root and is kept on-chain, while the Merkle leaves (representing individual NFTs) on the tree are stored off-chain and managed by RPC providers.

This solution addresses the issues of cost and block space - supposedly. Compressed NFTs (cNFTs) was pioneered under the Solana blockchain by Solana labs merkle tree program (Gummyroll) via the Metaplex Foundation’s compressed NFTs program (Bubblegum).

Solana really is the company for shitty projects right?

It's just business.

But Why Are We Compressing NFTs?

I'm not the one to hate on emerging technologies or advancements but something about the idea of "compressed NFTs" gives me the ultimate ick. If you've been around the DeFi space for a while then NFTs isn't a new acronym to you.

If you haven't, well the concept of NFTs is no different than your regular Amazon online store (NFT marketplace in this case), only that the products there (the NFTs in this case) are stored on a blockchain, and oh, they're generally way more expensive and mostly have little to no real world use cases.

Compressed NFTs (cNFTs) on the other hand are just like the regular NFTs but way more cheaper to mint and thus way more likely to be minted in very large quantities and that right there is the ick for me.

^{Plus if only the root is stored on-chain, the rest are just not NFTs then, or am I missing something here?}

The acronym NFTs stands for Non-Fungible Tokens, "Non-Fungible" because unlike Bitcoin, Ethereum, Litecoin, and Solana, their exchange rate is not standardized like it is for the cryptocurrencies aforementioned. Which means they are unique and not interchangeable on a one-to-one basis like fungible assets.

The uniqueness of every NFTs is one of the reasons it is called Non-Fungible and I feel like they're on the path to losing that uniqueness if I can mint 100 million NFTs that aren't even on-chain all in the name of "saving space and cost."

I mean come on? why would anyone want to mint 100 million NFTs that aren't really NFTs? How idealistic will that be? How profitable will that be? How unique will that be? Isn't compressed NFTs compromising the whole concept of NFTs in the first place?

Why Would Anyone Buy Or Own An NFT In The First Place?

To understand why I think compressed NFTs is a bad idea we first need to retrace to why anyone would want an NFT in the first place.

Investment

The value of every NFT is not standardized and it depends on various fluctuating factors and this presents an opportunity for two of the most expensive NFTs to be sold at $91.18 million and $69.4 million respectively. It however also presents an opportunity for an NFT that was once worth $1.3 million to slip to a loss of a little less than $60,000. But yeah, the point is NFTs are known to store value much more than any one single cryptocurrency can.

Status Symbol

Once upon a time, everybody that owned a BAYC NFT no doubt wasn't worried about losing their jobs or the price hike in groceries or the next global pandemic. The least rarest BAYC NFT sold for over $344,000 and the rarest sold for millions of dollars. Owners of a Bored Ape NFT included celebrities and exclusive events and an online club came with the package of owning a BAYC NFT.

Digital Ownership

NFTs are used to authenticate ownership digitally without the interference or involvement of a centralized authority.

It can serve as a very effective medium of owning intellectual rights that is verifiable on a public distributed ledger which is known as the blockchain.

So aside from serving as a profit making and status symbol, it can also serve as proof-of-ownership. So now imagine that "proof" being stored off-chain and ultimately linked to one original piece that might not even have anything to do with what your NFT represented, I mean, isn't that fucked up?

NFTs Aren't Diamonds So, Compression – Nah!

If you're making a hundred million of a product, you should be certain of at least 200 million or, at the very least, 150 million in demand for the product, right? Because that would be profitable for you as the supplier.

And if it's a "Non-Fungible" digital collectible, it only makes sense for me to know that I'm paying a lot of money for a limited product that us actually unique to itself – one that isn't in circulation with a quantity of 100 million, at the very least. It's barely even in circulation because a hundred million people won't be willing to hold NFTs in the current bear market, I stand to be corrected.

NFTs aren't diamonds, compression potentially does to them exactly the opposite of what compression does to diamonds. Yeah yeah, Metaplex actually addressed this concern via one of their articles about compression saying;

"Compressed NFTs can also be losslessly decompressed into uncompressed Metaplex NFTs — which means users don’t sacrifice quality at any step of the process. The original quality is never compromised."
Source

Does that really solve the fact that these NFTs are custodially managed off-chain?

If we're already trying to reduce the cost of a technology in its Alpha stage, also considering that we haven't even achieved reasonable global adoption of that technology yet, and we're already looking for cheaper and lighter means of making the technology more marketable, what is the potential negative or positive impact on that technology's longevity and value sustainability? How long before another Web3 – you know what, never mind.

But ultimately, cNFTs will go from being Compressed Non-Fungible Tokens to Compressed Fungible Tokens; a standard will be created to aid their inevitable transformation into a fully functional cryptocurrency or, even worse, because with 100 million NFTs being minted for a little over $1000? What liquidity would back 100 million NFTs that were minted for a little over $1000?

I can't even set this question straight because it's fuckin stupid. You want to store NFTs off-chain? Talk about the easiest way to make them not NFTs.

Change my mind.