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Musk Fuels NFT Scepticism on Rogan Podcast to Bitcoin Fans’ Cheers
- Rogan and Musk discussed crypto scams and scepticism about Sam Bankman-Fried.
- Musk finds his Bahamas base suspicious and questions NFTs’ detachment from the blockchain.
- Bitcoin enthusiasts see Musk’s critique of off-chain NFTs as an endorsement of Bitcoin ordinals.
Joe Rogan, comedian and host of ‘The Joe Rogan Experience’ sat down with Elon Musk to talk about all things of interest with X and Musk’s other projects. Eventually the topic of crypto and NFTs came up and the two also briefly discussed the Bankman-Fried trial.
Crypto Scams and NFTs
Rogan stirred the conversation toward crypto when he mentioned Sam Bankman-Fried, who is currently tried for several fraud-related charges. Rogan said that Bankman-Fried set off Musk’s “bullshit meter” when he offered to buy in with him in the Twitter acquisition.
Musk replied he didn’t know who Bankman-Fried was but found it odd right away that he was in the Bahamas, saying,
“I hadn’t really heard of the guy. Who is he? What does he do? And he is in the Bahamas? Hm, that’s suss to begin with. Financial organisations on tropical islands have generally a bad track record.”
Elon Musk
They both agreed that the rate of scams in crypto is high, albeit not everything is a scam. Rogan claimed that 80% of NFTs are a scam, apart from Beeple.
Musk stated,
“The funny thing is NFTs are not even on the blockchain, it’s just a URL to the JPEG”
Elon Musk
He added, “You should at least encode the JPEG in the blockchain. If the company housing the image goes out of business, you don’t have the image anymore.”
Maxis Are Having a Field Day
Musk’s comments were interpreted by many Bitcoin (BTC) purists as somehow condoning Bitcoin ordinals.
The Bitcoin Ordinals protocol, devised by Casey Rodarmor, enables digital content to be permanently inscribed onto the Bitcoin blockchain, providing a new way to create and track unique digital assets, similar to NFTs.
Launched in January 2023, it allows for the individual identification of Satoshis, the smallest Bitcoin units. The protocol gained traction in February 2023, with the number of inscriptions growing rapidly, although limited by the less-than-optimal infrastructure for their inscription and trade.
About ERC-721 and Ordinals
One user on X, danny huuep, commented that Elon Musk’s observation that many NFTs function as URL pointers to off-chain JPEGs rather than storing the actual image on the blockchain is correct for the majority of NFTs created using the Ethereum ERC-721 standard. This standard is prevalent and primarily serves as a certificate or pointer to digital assets.
However, as @hueep also points out, ordinals facilitate the creation of on-chain NFTs, where the digital artefacts are stored directly on the blockchain. On Ethereum, while on-chain NFTs did exist, they were rare and not widely supported by marketplaces due to their deviation from the conventional ERC-721 protocol. Creators who produced on-chain NFTs often had to employ inelegant workarounds, leading to a general misunderstanding and underappreciation of such assets even within the Ethereum on-chain community, he concluded.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
