In a recent podcast interview, billionaire Elon Musk, CEO of Tesla, made comments criticizing non-fungible tokens (NFTs) and their use of blockchain technology. Musk specifically pointed out that NFTs are often just URLs to JPEG images and suggested that the images should be encoded on-chain to prevent them from being lost if the hosting company goes out of business.
Interestingly, Musk’s comments inadvertently highlighted the case for Bitcoin Ordinals, also known as Bitcoin NFTs. Bitcoin Ordinals were launched in January by developer Casey Rodarmor, taking advantage of the Taproot soft fork that occurred in November 2021. These Bitcoin NFTs allow for the inscription of images or text directly on Bitcoin’s blockchain.
Cryptocurrency analyst Will Clemente praised Musk’s comments, noting that there are already 38 million Ordinals inscriptions on Bitcoin’s blockchain. This highlights the growing interest and adoption of Bitcoin NFTs, which provide a solution to the criticism of traditional NFTs as being solely dependent on external URLs.
Rohun “Frank” Vora, the creator of NFT projects DeGods and y00ts, also expressed his support for Bitcoin Ordinals, calling them an elegant solution to a common criticism of NFTs. Vora believes that Ordinals will continue to grow in popularity.
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One developer known as “Leonidas” even took Musk’s comments to heart and inscribed a 19-second video of Elon Musk onto Bitcoin’s blockchain using the Ordinals protocol. This demonstration showcases the potential of Bitcoin NFTs to preserve and immortalize digital content in a secure and decentralized manner.
It is worth mentioning that Musk has a history of publicly criticizing NFTs. In December 2021, he shared a meme suggesting that NFTs are a sign of mental illness. However, his recent comments about encoding images on-chain open up the conversation about the potential benefits of Bitcoin Ordinals.
While Musk’s criticisms may not apply to all NFT projects, such as Larva Labs’ Cryptopunks NFTs, which were moved on-chain in August 2021, there is still a valid argument for the use of Bitcoin Ordinals. Ethereum continues to dominate the NFT space, accounting for 84% of all NFT trading volumes according to CoinGecko. However, proponents of Bitcoin Ordinals argue that the Bitcoin network offers superior security and decentralization, making it an ideal platform for high-value NFTs.
The migration of NFT projects, like OnChainMonkeys, from Ethereum to Bitcoin further supports the belief that Bitcoin Ordinals will gain traction. Danny Yang, CEO of Metagood, the team behind OnChainMonkeys, emphasized that Bitcoin’s Ordinal protocol is better designed for decentralization and security, providing a more secure network for high-value NFTs.
Despite the growing interest in Bitcoin NFTs, it is important to note that Ethereum still dominates the NFT market. Ethereum’s established infrastructure and ecosystem make it the preferred choice for most NFT creators and collectors. However, the emergence of Bitcoin Ordinals presents an alternative and potentially more secure option for those seeking to tokenize and protect their digital assets.
In conclusion, Elon Musk’s criticisms of NFTs inadvertently opened up a discussion about the potential benefits of Bitcoin Ordinals. By highlighting the need to encode images on-chain, Musk unintentionally showcased the value of Bitcoin NFTs in preserving digital assets. While Ethereum currently dominates the NFT market, the emergence of Bitcoin Ordinals offers an alternative platform that provides enhanced security and decentralization. As more developers and creators explore the possibilities of Bitcoin NFTs, we may see a shift in the landscape of the NFT industry.
