An introduction to decentralized NFT directories

Over the past year, venture capitalists have poured more than $4.6 billion into infrastructure and projects related to non-fungible tokens (NFTs). This infrastructure now needs users. They will come when people understand that they can use these NFTs not only for speculative purposes, but to design and structure their daily activities. For these, they don’t need NFTs – they need to sort out their lives. And decentralized directories are there to help them do that.

We can think of an NFT as a book someone owns, and this ownership is registered on the blockchain. But what we really lack is the library.

Not just a flower, but a garden

Several NFTs forming a collection form a system. This system has a structure through the standards it uses. If you’ve ever visited CryptoKitties, you’ve probably noticed the museum-like categorization of the kitties and their attributes in their “catalog”.

However, each item in the collection means nothing without the collection itself. You cannot take a CryptoKitty out of the original smart contract. You can copy the image or make a partial version of it, but you will not be able to transfer the value if the derivative version of CryptoKitty is not associated with the original collection. This means that the value of each NFT is not determined by a stand-alone item in the collection, but by the collection itself.

In simple words, if we take a step back from each element of almost any NFT collection, we will discover that the actual value is not in a single NFT by itself, but in a perfect system of several NFTs bound together by one smart contract. By doing this, we stop staring at a single flower and realize that we are in a well-designed garden.

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When we use all the standardization approaches and structure all the data correctly, we create systematic lists of items that are publicly stored on the blockchain – decentralized directories.

How decentralized cataloging can add new value

Everyone has heard of the Guinness World Records, the Michelin Guide or the IUCN Red List. In a nutshell, they are all extremely valuable directories. Behind each of them is a managing authority that invests its brand and expertise in bringing value to each new iteration of the catalog. Although the rules for adding new items to centralized lists are not transparent or even questionable, this approach is sustainable.

However, the biggest problem with these directories is an extremely high barrier to entry for new, valuable listings to enter the market. However, through NFT infrastructure and a Web3 mindset, we can democratize the process of building valuable directories. The difference between a normal list and a decentralized directory is the potential value it can accumulate.

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When you own a CryptoPunk, you co-own the CryptoPunks collection. Yes, that CryptoPunk may represent your inner self, but on its own it’s just a JPEG. As we have already discovered, the value lies in the collection itself, and the value is created not only by the expertise that went into the design of the character generator, but also by the owners of the collection.

By building an economy driven by co-ownership, we can create future-proof and transparent catalog systems. While another restaurant list is unlikely to add anything new to society, there are many situations where decentralized cataloging makes sense.

The library

Let’s imagine the most basic use case for decentralized cataloging. You own a collection of books and you want to share these books with someone. However, you know that there is a good chance that the people you lend your books to will never return them. That is life.

So you start a very simple process of creating an inventory of each book you share to the decentralized directory; only each record is actually an NFT.

The person who takes the book decides to use it to catalog their own books and share them with someone else, and that person shares it with their friend as well. In a few years, your book sharing club will become an Internet phenomenon, with more and more people adding books to the catalog.

It is only a matter of time before large publishers also join in. Some publishers may start adding newly published books to distribute them through the directory system you created. As we know about NFT compatibility, it is clear that all the NFT marketplaces and infrastructure we have today will become useful tools and interfaces that will work out of the box. No need for additional listing websites, centralized bookstores or payment solutions.

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And it all started with you, who added the first book as an NFT to the shared book collection.

The same approach is used in Cointelegraph’s historical NFT collection. It is a directory of news from the biggest crypto media, and Cointelegraph readers choose which news to add to it.

The real future of the NFT standard is common, and that’s great. We use many common things every day that were overpriced when they hit the market. However, as production and technology developed, prices fell and made them available to everyone.

The same will happen with NFTs. All we need to do now is stop staring at the tulips and start designing a garden.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.