With NFT buzz deep into a downswing that started in 2015, it’s easy to discover popular criticism of the blockchain tokens that represent ownership in distinct products, such as art work. Now Elon Musk has actually signed up with the fray– and Bitcoin fans are delighted about it.
Throughout his most current look on the popular “Joe Rogan Experience” podcast, Twitter owner and Tesla and SpaceX CEO Musk called out the concept that lots of NFTs are not totally kept on-chain. Rather, some eventually indicate art work that’s hosted on an external server, possibly putting them at danger.
“The amusing thing is the NFT is not even on the blockchain– it’s simply a URL to the JPEG,” Musk stated. “You must a minimum of encode the JPEG in the blockchain. If the business real estate the image fails, you do not have the image any longer.”
Musk isn’t incorrect about this being a significant discomfort point around NFTs. It was a typical criticism in the early days of the NFT boom, when Bored Ape and CryptoPunks avatars were costing seven-figure amounts in 2021– and particularly when Mike “Beeple” Winkelmann offered tokenized digital art for $69 million at a Christie’s auction in March 2021.
Podcast with the terrific and effective @elonmusk #ad Full episode is 2 hours and 41 minutes, initially 2 hours is readily available here on https://t.co/AIkGSaxVMA pic.twitter.com/DQh0GGNyaO
— Joe Rogan (@joerogan) October 31, 2023
We saw a popular example of this late in 2015 when crypto exchange FTX collapsed. FTX had actually released its own NFT market and dealt with brand names like the music celebrations Coachella and Tomorrowland to debut NFT antiques, however a lot of them quit working properly as soon as FTX’s servers went offline. Independently, there are decentralized storage platforms that let NFT owners “back up” their art work in case of disaster.
Musk’s assertion isn’t real in all cases. Some jobs on Ethereum– the leading blockchain network for NFTs– keep their art work on-chain, consisting of pixel tasks like CryptoPunks and Moonbirds. And the generative art platform Art Blocks, for instance, puts its artists’ algorithms on-chain so that the resulting art work can be duplicated from the output.
Musk’s declaration likewise plays into a popular misunderstanding around NFTs. The NFT, or non-fungible token, isn’t the art work or linked product itself.
Rather, an NFT imitates an invoice or an evidence of ownership that’s linked to something, whether it’s digital art work, an interactive computer game product, or perhaps a physical watch. In many cases, the art work is likewise on a decentralized blockchain network, and hence immutable and censorship-resistant. In other cases, the art work isn’t on-chain– or the NFT rather represents ownership of a real-world product.
What about Bitcoin?
There is one popular NFT-like environment in which all art work and media is certainly completely on-chain– and it exists on Bitcoin.
Bitcoin’s Ordinals procedure lets users “engrave” art work and other media onto the blockchain. The procedure is various from Ethereum and other blockchains that count on clever agreements,