Elon Musk, the CEO of Tesla (NASDAQ:TSLA), inadvertently promoted the potential of bitcoin ordinals during an interview on “The Joe Rogan Experience” on Thursday. While expressing skepticism about non-fungible tokens (NFTs), Musk suggested that digital assets should be stored on-chain to avoid loss. His comments echoed the purpose of Bitcoin Ordinals, a protocol introduced by Casey Rodarmor that allows for image and text inscriptions directly on the bitcoin blockchain following the Taproot soft fork. Currently, there are over 38 million Ordinals inscriptions on the Bitcoin blockchain.
Rohun Vora, creator of the DeGods and y00ts NFT projects, echoed Musk’s sentiments, calling Ordinals an optimal solution to common NFT criticisms. OnChainMonkeys, an Ethereum native NFT project, announced plans to move to Bitcoin due to the superior decentralization and security offered by the Bitcoin Ordinal protocol.
However, it is important to note that not all NFTs are subject to Musk’s criticism. For example, Larva Labs moved its CryptoPunks NFTs on-chain in August 2021 for long-term preservation.
Musk’s criticism of NFTs focused on the fact that many aren’t fully integrated into the blockchain, but are merely URLs to external servers that host digital assets. This setup creates risk and potential loss of assets if those hosting companies dissolve. He advocated for JPEG encoding on the blockchain to improve security and the safety of digital art. His comments sparked a debate within the NFT community, with some projects storing their assets on the Ethereum blockchain while others rely on external servers, increasing risk.
In response to Musk’s comments, bitcoin enthusiasts promoted the Bitcoin Ordinals protocol, a system that securely inscribes artwork and media on the bitcoin blockchain itself. This approach ensures the accessibility of NFTs as long as the bitcoin network remains operational.
