Elon Musk inadvertently sparked a conversation highlighting the growing relevance of Bitcoin NFTs, also known as Bitcoin Ordinals. During the podcast, Musk took a jab at nonfungible tokens (NFTs). He was keen to point out a fundamental flaw in their design.
Understanding the Flaw in Traditional NFTs
Musk humorously noted, “The funny thing is the NFT is not even on the blockchain — it’s just a URL to the JPEG.” He further suggested that for NFTs to have real value, the actual JPEG should be encoded on the blockchain. This statement underscores a common critique of NFTs. If the server hosting the image were to fail, the owner would be left without the associated image. That renders the NFT worthless.
This critique inadvertently highlights Bitcoin Ordinals, a novel iteration of NFTs introduced in January by developer Casey Rodarmor. Enabled by Bitcoin’s Taproot soft fork in November 2021, Ordinals inscribe data directly onto the Bitcoin blockchain. It effectively addresses the concern Musk raised. Unlike traditional NFTs, these inscriptions are permanently etched onto the blockchain. Moreover, it ensures their existence regardless of external server status.
Musk’s comments resonated with cryptocurrency enthusiasts, who saw them as an unwitting endorsement of Bitcoin Ordinals. Prominent cryptocurrency analyst Will Clemente highlighted the growing number of Ordinal inscriptions. These currently sit at over 38 million, testament to their durability and permanence.
Rohun “Frank” Vora, creator of NFT projects DeGods and y00ts, echoed these sentiments. They state, “It’s the most elegant solution to one of the most universal criticisms of NFTs.” The crypto community views Bitcoin Ordinals as an elegant and practical response to the vulnerabilities plaguing traditional NFTs.
Elon Musk Has Always Been An NFT Skeptic
It’s worth noting that Musk’s skepticism towards NFTs isn’t a new development. In December 2021, he mocked the concept by likening the obsession with NFTs to a sign of mental illness. While not entirely accurate, it isn’t too far off the mark either.
While Elon Musk may have intended to critique NFTs, his observations inadvertently made a compelling case for adopting Bitcoin Ordinals. By addressing the fundamental flaw he pointed out, Bitcoin Ordinals stand as a robust and enduring alternative to traditional NFTs.