Musk’s Jest at NFTs Reveals a Serious Point
While poking fun at the nonfungible tokens (NFTs) in a recent podcast, Tesla’s CEO, Elon Musk, unexpectedly made a compelling argument for Bitcoin Ordinals, a variant of Bitcoin-based NFTs. His point highlighted a significant drawback in many NFT projects—the lack of on-chain JPEG storage.
During his Oct. 31 appearance on The Joe Rogan Experience, Musk pointed out that a typical NFT doesn’t store the actual digital asset on the blockchain, but merely a URL link to it, which could potentially lead to loss of the asset if the hosting company shuts down. Musk emphasized, “You should at least encode the JPEG in the blockchain. If the company housing the image goes out of business, you don’t have the image anymore.”
Bitcoin Community Backs Musk’s Stance
Bitcoin enthusiasts were quick to agree with Musk’s perspective, pointing out that this is exactly what Bitcoin Ordinals achieve by encoding JPEGs on-chain. This feature ensures the longevity and authenticity of digital assets, addressing one of the common criticisms of traditional NFTs.
Cryptocurrency analyst Will Clemente and NFT project creators like Rohun “Frank” Vora lauded Musk’s remarks, noting the growing number of Ordinals inscriptions on the Bitcoin blockchain.
Bitcoin Ordinals: A Step Ahead in NFT Evolution
Ordinals, introduced in January by developer Casey Rodarmor following the November 2021 Taproot soft fork, brings a more secure and decentralized approach to digital asset ownership. Unlike many Ethereum-based NFTs, Bitcoin Ordinals allow for on-chain storage of digital assets, ensuring their survival regardless of third-party platforms’ fate.
For instance, Larva Labs and Metagood are among the entities that recognized the benefits of on-chain storage and have taken steps towards migrating or storing their NFTs on Bitcoin.
The Broader Implications
Danny Yang, CEO of Metagood, highlighted the security and decentralization advantages of Bitcoin over Ethereum for NFTs, affirming that “High-value NFTs will win on Bitcoin.” Yet, despite these technical advantages, Ethereum continues to dominate the NFT market share.
This episode serves as a reminder of the evolving nature of blockchain technology and how a sarcastic remark from a tech billionaire can spark meaningful discussions in the cryptocurrency community, nudging the industry towards more robust solutions like Bitcoin Ordinals.