- Elon Musk recently made remarks about NFTs during a podcast
- He pointed out that NFTs are not actually stored on the blockchain, but rather linked to a JPEG
- Musk suggested that NFTs should at least encode the image on the blockchain to prevent loss
- Bitcoiners argued that Musk’s comments highlighted the potential of Bitcoin Ordinals
- Bitcoin Ordinals are similar to NFTs and allow for text and image inscriptions on the Bitcoin blockchain
- Musk’s comments were praised by cryptocurrency analysts and developers of Ordinals
- Some NFT projects on Ethereum have already moved their content on-chain to ensure long-term survival
- Despite the potential of Bitcoin Ordinals, Ethereum still dominates the NFT market
- Bitcoin and ImmutableX also have a smaller market share in NFT trading
Elon Musk’s recent comments about NFTs have inadvertently highlighted the potential of Bitcoin Ordinals. While criticizing NFTs for not being stored on the blockchain, Musk argued that at the very least, the image should be encoded on-chain to prevent loss. This argument aligns with the concept of Bitcoin Ordinals, which allow for text and image inscriptions directly on the Bitcoin blockchain.
Bitcoin Ordinals were launched in January as a result of the Taproot soft fork in November 2021. They provide a similar functionality to NFTs, allowing for the permanent recording of text and image data on the blockchain. Cryptocurrency analysts and developers have praised Musk’s comments, noting the growing number of Ordinals inscriptions on the Bitcoin blockchain.
However, it’s important to note that not all NFT projects on Ethereum suffer from the same shortcomings highlighted by Musk. Some projects have already moved their content on-chain to ensure long-term survival. Larva Labs, for example, moved its Cryptopunks NFTs on-chain in August 2021 to enhance accessibility and preservation.
Despite the potential of Bitcoin Ordinals, Ethereum still remains the dominant platform for NFT trading. According to CoinGecko data from June, Ethereum accounts for 84% of all NFT trading volumes. Bitcoin and ImmutableX have smaller market shares of 11% and 2.5% respectively.