Of NFT While the hype is deep in a downturn that started last year, it’s not hard to find prominent criticism of the blockchain tokens that represent ownership of unique items, such as works of art. Now Elon Musk has joined the fray – and Bitcoin fans are excited about it.
During the day his last appearance on the popular podcast “Joe Rogan Experience,” Twitter owner and CEO of Tesla and SpaceX Musk raised the idea that many NFTs are not fully on-chain. Instead, some end up referring to works of art that may be hosted on a remote server which puts them in danger.
“The funny thing is, the NFT isn’t even on the blockchain – it’s just a URL to the JPEG,” Musk said. “You should at least encode the JPEG into the blockchain. If the company that houses the statue goes bankrupt, you no longer have the statue.”
Musk isn’t wrong that this is a notable sore point surrounding NFTs. It was a common criticism in the early days of the NFT boomwhen Bored monkey And CryptoPunks avatars sold for seven-figure sums in 2021 – especially when Mike “Beeple” Winkelmann sold tokenized digital art for $69 million at a Christie’s auction in March 2021.
Podcast with the amazing and powerful @elonmusk #ad The full episode is 2 hours and 41 minutes, the first 2 hours are available here at https://t.co/AIkGSaxVMA pic.twitter.com/DQh0GGNyaO
— Joe Rogan (@joerogan) October 31, 2023
We saw a prominent example of this at the end of last year when the crypto exchange FTX collapsed. FTX had launched its own NFT marketplace and partnered with brands like the Coachella and Tomorrowland music festivals to debut NFT collectibles, but many of them stopped working correct as soon as FTX’s servers went offline. There are separate ones decentralized storage platforms which allows NFT owners to backup their artwork in the event of a catastrophe.
But Musk’s claim is not true in all cases. Some projects in progress Ethereum– the leading blockchain network for NFTs – store their artwork on-chain, including pixel projects like CryptoPunks and Moonbirds. And the generative art platform Art Blocksfor example, puts its artists’ algorithms on chain so that the resulting artwork can be replicated from the output.
Musk’s statement also plays on a popular misconception surrounding NFTs. The NFT, or non-fungible token, is not the artwork or connected item itself.
Instead, an NFT acts as a receipt or proof of ownership tied to something, whether it’s digital artwork, an interactive video game item, or even a physical wristwatch. In some cases, the artwork is also on a decentralized blockchain network, and therefore immutable and censorship-resistant. In other cases, the artwork is not on-chain, or the NFT instead represents ownership of a real-world item.
What about Bitcoin?
But there is one prominent NFT-like ecosystem in which all artworks and media are indeed fully on-chain – and it exists on Bitcoin.
Bitcoins Ordinals protocol allows users to ‘register’ artworks and other media on the blockchain. The process differs from Ethereum and other blockchains that rely on it smart contractsor code that makes autonomous possible decentralized apps (dapps) and tokenized assets via NFTs.
At Ordinals, the artwork or media is linked to a single satoshi – or the smallest unit of a Bitcoin, or 1/100,000,000 of a full BTC – and is given a unique inscription number. The Ordinals model ensures that assets are permanently enrolled on the blockchain, and as long as the Bitcoin network remains live, so will those NFT-like assets.
Bitcoin advocates and Ordinals supporters seized on Musk’s comments, suggesting it proved why Ordinals is superior to traditional NFTs on Ethereum and other chains.
.@elonmusk you just laid out the case for Bitcoin ordinal numbers: image/text inscriptions directly on the most secure open source monetary network in the world. There are currently 38 million of these inscriptions on the Bitcoin blockchain. pic.twitter.com/WASj1qpkz8
— Will Clemente (@WClementeIII) November 1, 2023
“You just laid out the case for Bitcoin Ordinals: image/text inscriptions directly on the most secure open-source monetary network in the world,” Will Clemente tweeted, co-founder of Reflexivity Research. “There are currently 38 million of these inscriptions on the Bitcoin blockchain.”
“This is why Ordinals will continue to grow. It’s the most elegant solution to one of the most universal criticisms of NFTs.” tweeted Rohun “Frank” Voracreator of prominent profile photo projects (PFP). DeGods and y00tswho has set up projects on several chains including Bitcoin, Ethereum and Solana.
“This is why I’ve generally said that ordinal numbers are cooler too,” tweeted Dogecoin co-creator Billy Markus, after confirming Musk’s statements about how NFTs often refer to external assets. Musk is a long-time supporter of Dogecoin.
I just enrolled @elonmusk’s video stating that NFTs are “not even on the blockchain” into the Bitcoin blockchain!
Make sure this appears in Elon’s timeline and he will learn how Bitcoin NFTs (Ordinals) are fully stored on-chain forever.
→ https://t.co/hHRr3AYtxj pic.twitter.com/qAdhS7GXCZ
— Leonidas (@LeonidasNFT) November 1, 2023
And one person – the pseudonymous Leonidas, a prominent influencer and supporter of the Ordinals – even wrote the Musk music video on Bitcoinhighlighting only the broader community response in favor of the fully on-chain Ordinals.
“Join us so this appears in Elon’s timeline and he learns how Bitcoin NFTs (Ordinals) are fully stored on-chain forever,” Leonidas wrote.