- In a recent podcast, Elon Musk critiqued NFTs for not storing JPEGs on the blockchain, indirectly making a case for Bitcoin Ordinals.
- Bitcoin Ordinals, launched in January following the Taproot soft fork, enables the on-chain encoding of JPEGs, addressing Musk’s concerns.
Tesla’s CEO, Elon Musk, known for his influential voice in the tech and crypto spheres, recently shared his views on nonfungible tokens (NFTs) during an episode of The Joe Rogan Experience. Musk highlighted a critical aspect of NFTs, pointing out that most NFTs link to JPEGs rather than storing them directly on the blockchain.
“The funny thing is the NFT is not even on the blockchain — it’s just a URL to the JPEG,”
The Unintended Case for Bitcoin Ordinals
This critique inadvertently underscored the value proposition of Bitcoin Ordinals, also referred to as Bitcoin NFTs. Launched in January by developer Casey Rodarmor, Bitcoin Ordinals operate on the Bitcoin blockchain, allowing for the on-chain encoding of JPEGs and other digital assets. This capability directly addresses Musk’s concern about the potential loss of digital assets if the hosting company goes out of business.
“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.”
This viewpoint resonated with many advocates of Bitcoin, highlighting the robustness of Bitcoin Ordinals in preserving digital assets permanently on the blockchain.
Cryptocurrency analyst Will Clemente and Rohun “Frank” Vora, creator of NFT projects DeGods and y00ts, were among those who voiced their support for Musk’s comments. They emphasized the growing popularity and permanence of Ordinals inscriptions, with over 38 million currently on the Bitcoin blockchain. Vora referred to Bitcoin Ordinals as
“the most elegant solution”
to a common critique of NFTs.
Interestingly, the Ordinals developer known as
was so aligned with Musk’s comments that they decided to inscribe the 19-second video clip of Musk’s statement into Bitcoin’s blockchain at block 814,773, further showcasing the capabilities of Bitcoin Ordinals.
.@elonmusk you just laid out the case for Bitcoin ordinals – image/text inscriptions directly on the most secure open source monetary network on the planet. There are currently 38 million of these inscriptions on the Bitcoin blockchain. pic.twitter.com/WASj1qpkz8
— Will Clemente (@WClementeIII) November 1, 2023
Despite Musk’s critique, not all NFT projects on Ethereum share the same JPEG storage issue. Larva Labs, for instance, migrated its CryptoPunks NFTs on-chain in August 2021. Furthermore, Metagood announced plans to shift its Ethereum-native OnChainMonkeys to Bitcoin, citing the superior decentralization and security of the Bitcoin Ordinal protocol.
— Elon Musk (@elonmusk) December 16, 2021
However, it’s crucial to note that, as of June, Ethereum still dominates the NFT market, housing 84% of all trading volumes, with Bitcoin and ImmutableX following behind with market shares of 11% and 2.5%, respectively.