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InterPlanetary File System (IPFS)

09.04.25

What is the InterPlanetary File System (IPFS)?

When you access a website today, you're asking a specific server for a file located at a specific address, like www.example.com/image.jpg. If that server goes down or the file moves, the link breaks. The InterPlanetary File System (IPFS) offers a completely different approach. Instead of asking where a file is, you ask what the file is, and a global network of computers works together to find and deliver it to you.

IPFS is a decentralized peer-to-peer network for storing and sharing files. Think of it as a global, community-run hard drive for the internet. For the world of blockchain, this is a game-changer. It provides a way to store the large files associated with NFTs and decentralized applications (dApps) in a way that is as decentralized and censorship-resistant as the blockchain itself. This helps ensure that your digital assets and the applications you use remain truly yours and accessible.

The Problem with Centralized Storage

The traditional internet, based on the Hypertext Transfer Protocol (HTTP), has served us well, but it has some fundamental limitations, especially when it comes to supporting a decentralized world.

  • Central Points of Failure: Data is stored on centralized servers. If a company's server goes down, whether due to a technical issue or the company going out of business, all the data it hosts becomes inaccessible.

  • Censorship: Because data is in one place, governments or corporations can easily block access to it or remove it entirely.

  • Inefficiency: If you and your neighbor both want to watch the same popular video, you both have to download it from a distant server, even though you could have just gotten it from each other. This creates a lot of redundant network traffic.

These issues are particularly problematic for blockchain applications. What good is a decentralized NFT if the artwork it points to is stored on a server that can be shut down at any moment?

How IPFS Works: Content-Addressing

IPFS flips the script by using a method called "content-addressing" instead of "location-addressing."

Here's how it works:

  1. Hashing the Content: When you add a file to the IPFS network, the system creates a unique cryptographic hash for that file. This hash is like a digital fingerprint that is directly derived from the content of the file itself. Even a tiny change to the file will result in a completely different hash.

  2. Asking for the File: When you want to retrieve the file, you don't use a location-based URL. Instead, you ask the IPFS network for the file that matches that specific hash.

  3. Peer-to-Peer Retrieval: The network of nodes running IPFS software communicates to find which computer is storing the file (or pieces of the file) you're looking for. It then fetches the file from the closest peers who have it, not from a single central server.

This simple change has profound implications. The link to a file is now permanent. As long as at least one person on the IPFS network is hosting the file, you will be able to access it using its content hash.

An Analogy: The Global Library

Think of the current internet as a library where you have to know the exact shelf number to find a book (e.g., Aisle 5, Shelf 3, Book 7). If the librarian moves the book, your directions are useless.

IPFS is like a library where you just ask for a book by its unique ISBN number. The librarians (the IPFS nodes) know who has a copy of that book, and they get it for you from the nearest person, whether it's the main library branch or the person sitting next to you. The book's location doesn't matter, only its identity.

Why IPFS is Crucial for NFTs and dApps

IPFS provides the missing piece of the puzzle for a truly decentralized internet, often called Web3.

Permanent Storage for NFTs

Most NFTs don't actually store their associated media (the artwork, music, or video) on the blockchain itself. That would be incredibly expensive and slow. Instead, the NFT's smart contract contains a link to where the media is stored.

If that link points to a traditional website, you have a problem. The NFT might be permanent, but the art it represents could disappear if the website goes down.

By using an IPFS link (e.g., ipfs://<content-hash>), the NFT's media is stored on a decentralized network. This makes the link permanent and censorship-resistant, ensuring that the art will be accessible as long as it's hosted on the network. It aligns the storage of the asset with the decentralized nature of the token itself.

Building Resilient dApps

Decentralized applications need a place to store their front-end code, user data, and other files. If they rely on centralized hosting services like Amazon Web Services (AWS), they introduce a central point of failure that undermines their entire purpose.

IPFS allows developers to host their dApps on a distributed network, making them more resilient and resistant to censorship. If one node hosting the dApp goes offline, users can still access it from other nodes around the world.

The Advantages of a Decentralized Web

Using IPFS brings a host of benefits that contribute to a more open, secure, and efficient internet.

  • Censorship Resistance: Because files are stored across a global network of computers, it's very difficult for any single entity to block or remove content.

  • Improved Data Integrity: Content-addressing guarantees that the file you receive is the exact file you asked for. The hash acts as a built-in verification system. You can be certain the file hasn't been tampered with in transit.

  • Enhanced Availability: With IPFS, there's no single point of failure. Popular files are replicated across many nodes, so even if some nodes go offline, the content remains accessible.

  • Greater Efficiency: IPFS can save significant bandwidth by retrieving files from nearby peers instead of distant servers. This is especially useful for delivering large files or streaming content to a large audience.

The Challenges and Considerations

IPFS is a powerful technology, but it's still evolving and comes with its own set of challenges.

  • Data Persistence: A file is only available on IPFS as long as at least one node is choosing to host it. If everyone who has the file deletes it, it disappears from the network. This is known as the "data persistence problem." To solve this, services called "pinning services" have emerged. You can pay a pinning service to ensure they always keep a copy of your file hosted on their IPFS nodes.

  • Slower Retrieval for Unpopular Files: While popular files are fast to access because they are cached on many nodes, retrieving a rare file that is only hosted on one node across the globe can be slower than using a traditional web server.

  • Content Moderation: The same features that make IPFS censorship-resistant also make it difficult to remove illegal or harmful content. This is a complex societal and technical challenge that the community is actively working to address.

The Future is InterPlanetary

IPFS is a foundational technology for building Web3. It provides the decentralized storage layer needed to support a new generation of applications and services that are not controlled by any single company or government.

As more developers and users adopt IPFS, the network becomes stronger and more useful. It's part of a broader movement to re-decentralize the internet, putting control back into the hands of individuals. The goal is to create a web that is more resilient, open, and fair for everyone.

Final Thoughts

The InterPlanetary File System might have a futuristic name, but it solves a very real and present problem. It ensures that the decentralized applications we use and the digital assets we own are supported by an equally decentralized foundation.

By changing how we find and share information online, IPFS helps deliver on the promise of a truly peer-to-peer internet. For you, this means your NFTs are more secure, the dApps you use are more reliable, and your access to information is less dependent on the whims of central authorities. It's a critical step toward building a digital world that is as robust and distributed as the blockchain itself.

Disclaimer: Nothing in this entry is intended to be professional advice, including without limitation, financial, investment, legal or tax advice. Ulys is not responsible for your use of or reliance on any information in this entry as it is provided solely for educational purposes. Purchasing crypto assets carries a high level of risk, including price volatility, regulatory changes, and cyber attacks. On-chain transactions are irreversible once confirmed, and errors may result in permanent loss. Please make sure to do your own research and make decisions based on your unique circumstances. Ulys does not itself provide financial services or engage in regulated activities such as money transmission, custodial services, securities brokerage, or lending. Any licensed financial services (e.g., payment processing, crypto-to-fiat transactions, or lending) are facilitated entirely by third-party providers, who are responsible for obtaining and maintaining the necessary licenses under applicable U.S. federal and state laws. 

Risk Disclosure: Digital asset purchases come with risks, including the potential loss of funds. Always research before making financial decisions. Ulys does not provide financial, investment, or legal advice.

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