That's not the only thing to look at in an NFT
NFTs include fully on-chain types, which store all information on the chain, and proof-of-ownership types, where the NFT proves ownership. A simple comparison of the two makes fully on-chain look superior, but to understand NFTs you need to consider all the other factors together as well. It's easy to assume that fully on-chain must be better, but NFTs on Ethereum and Polygon, which hold value worldwide, are currently proof-of-ownership NFTs by deliberate choice, after weighing the trade-offs between fully on-chain and proof-of-ownership.
Our conclusion is that "both have their strengths," and HEXA believes that issuing and owning NFTs with an understanding of the strengths of each will lead to market growth
In conclusion, HEXA also plans to support fully on-chain NFTs through a system with no gas fee problems or upfront costs. Rather than saying one is better than the other, HEXA wants to use each where it fits and help both thrive as NFTs.
Why is proof-of-ownership (as on OpenSea and others) more common than fully on-chain?
The reason is that the most important function is the essence of an NFT: proving ownership and originality. The data an NFT is based on can easily be copied on the internet and multiplied endlessly. This is true whether the NFT is fully on-chain or proof-of-ownership. But once it is an NFT, the ownership itself cannot be copied. Showing that ownership is the essence of an NFT, and the currently mainstream proof-of-ownership type focuses on exactly that. This is presumably why OpenSea and others use the proof-of-ownership method rather than fully on-chain (OpenSea's metadata freeze also stores data on decentralized servers rather than putting it on-chain, so it is not fully on-chain).
Reason 1: blockchain reliability
A blockchain is called a distributed ledger, and its ledger data is held by computers called nodes, which guarantee the blockchain's reliability. Because these nodes are distributed, the blockchain's reliability is guaranteed. If the information written to the blockchain grew bloated, the amount of data each node computer must hold would increase explosively, and there is concern that in the end only a few large corporate nodes could operate, causing the blockchain to lose its meaning and reliability. Of course, there are many different blockchains in the world, such as chains whose nodes don't hold all ledger data, but similar reliability concerns arise for such chains. The mainstream Ethereum and Polygon place heavy limits on the amount of information written to the blockchain, and are designed mainly to record ownership and prove the most important thing: ownership of the original.
Reason 2: practicality of NFTs
Making video data or large image data into a fully on-chain NFT incurs very high gas fees (costs). Because these fees reward the nodes that run the blockchain, they grow in proportion to the amount of data. As a result, soaring gas fees are unavoidable not only when issuing an NFT but also when trading it on the secondary market. This means either reducing the amount of data that can be written into an NFT, or, for large data, issuing it as an NFT only makes financial sense at a certain price and cost scale. Rather than accepting those drawbacks to write the copyable original data itself onto the chain (which also creates the reliability problem in Reason 1), in practice many cases are thought to choose proof-of-ownership NFTs, focusing on the groundbreaking function NFTs make possible: proving unique ownership of data that can be copied endlessly.
Satoshi Nakamoto also decided to reduce the block size
In 2010, Satoshi Nakamoto, said to be the creator of Bitcoin, decided to reduce the size of a block, which can record multiple transactions, from the original 36MB to 1MB (this is for an entire block; each transaction is measured in KB, less than the capacity of a floppy disk). This was to reduce the risks of attacks on the network, DoS attacks, and a higher barrier to becoming a node participant.
Arguing that an NFT is bad because it isn't fully on-chain misses the point
There are reasons why proof-of-ownership NFTs, rather than fully on-chain ones, exist and are traded. From the above, you can see why Ethereum and Polygon NFTs don't adopt the easy-to-understand fully on-chain (full on-chain) approach. However, fully on-chain NFTs are also very valuable, and there are situations where on-chain is preferred, such as recording a will on-chain or recording a marriage proposal shared by just two people on-chain.
Each has its strengths, and both should exist
Of course, both have pros and cons, so which is better depends on the person. Rather than the simple argument that fully on-chain is good or proof-of-ownership is good, they should be used according to the nature of the NFT. It is important for each person to understand this and judge which chain and which NFT standard to invest in.
NFTs will blend into everyday life
In the future, NFTs are expected to blend into everyday life without people even noticing. NFTs with all kinds of uses and mechanisms will appear: proof-of-ownership NFTs, fully on-chain NFTs, the Sponsor NFTs handled by HEXA, and many more. We expect an era in which different NFTs are used according to their purpose.
HEXA's fully on-chain NFTs
On HEXA, even for proof-of-ownership Ethereum and Polygon NFTs, we plan to move them fully on-chain to increase the reliability of all data, taking into account future technological innovation and developments. For now, for the reasons above and because of copyright issues under Japanese law, we are not immediately freezing and locking everything, but we are working to freeze them after a certain number of years set by law have passed.
In addition, HEXA plans to introduce a feature for issuing NFTs that are fully on-chain from the start. We are preparing to make this possible in a way that addresses issues under Japanese law, gas fees and costs, so that users lose as little as possible and don't have to pay unnecessary costs.