Elon Musk, CEO of Tesla, has defended Bitcoin Ordinals, after publicly criticising NFT while participating in a podcast. Musk argued that NFT should encode JPEG files in chains because they could be lost if the hosting company goes bankrupt. Support for the Bitcoin Ordinals use case is expressed by Bitcoiners, including developers Casey Rodarmor and Will Clemente. Although Ethereum continues to dominate the NFT trade,  Bitcoin and ImmutableX follow close behind.

• It appears that Tesla CEO Elon Musk has inadvertently highlighted the case for Bitcoin Ordinals, commonly known as Bitcoin NFT.
• In an interview published on The Joe Rogan Experience on 31 October, Musk noted that NFT is not even in the blockchain, and it is just a URL to a JPEG.
• Musk has always criticised the NFT.

It may appear that billionaire Elon Musk in the podcast inadvertently highlighted the case for Bitcoin Ordinals, commonly known as Bitcoin NFT, while openly disparaging non-tradable tokens (NFT).

In an interview published on The Joe Rogan Experience on 31 October, Musk said it was funny that NFT isn’t even in the blockchain, and it’s just a URL to a JPEG.

Elon Musk suggests that NFT initiatives should encode JPEG files in blockchains, and that you lose the rights to your image when the hosting company goes bankrupt.

In social media, Bitcoiners argued that Musk’s comments actually summed up the use case for Bitcoin Ordinals. Developer Casey Rodarmor launched a version of NFT in Bitcoin in January, made possible by soft fork Taproot in November 2021.

Will Clemente, an expert on cryptocurrencies, supported Musk’s comments, noting that the 38 million Ordinals inscriptions on the Bitcoin blockchain will always remain. Rohun “Frank” Vora, founder of the NFT DeGods and y00tsprojects, noted that this is why Ordinals will continue to grow. It is also the most sophisticated response to one of the most common criticisms of the NFT.

The Ordinals developer, dubbed ‘Leonidas’, was so impressed by Musk’s remarks that he recorded a 19-second clip at block 814,773 on the Bitcoin blockchain.

Musk has always criticised NFT, so his stance is not new. He mocked NFTs in December 2021, publishing a meme depicting a patient lying on a therapist’s couch, suggesting that NFTs are a sign of mental illness.

Musk’s comments, however, do not apply to every NFT based Ethereum project.

Using Larva Labs as an example, it can be seen that after four years of operating off-chain, their CryptoPunks NFT was brought onto the Ethereum chain in August 2021. According to Larva Labs, moving them onto the chain was intended to secure the long-term sustainability of the images and attributes of Cryptopunks and to ensure full availability to all holders of Ethereum customers.

Metagood, the team behind Ethereum native OnChainMonkeys, announced in September that it would migrate its NFT to Bitcoin.

The company’s CEO, Danny Yang, has indicated that NFTs will outperform Bitcoin, arguing that it is a more secure network of operation and the Bitcoin Ordinal protocol is better designed in terms of decentralisation and security than the Ethereum NFT protocol. However, it did not specifically address the JPEG format issue. It is anticipated that Bitcoin will be dominated by high-value NFTs.

According to CoinGecko, which sourced data from June, Ethereum still accounts for 84% of all NFT traded volumes. With market shares of 11% and 2.5% respectively, Bitcoin and ImmutableX  ranked second and third respectively.