Elon Musk has again shared his opinion on what is commonly known as NFTs. The tradeable media linked to a blockchain’s non-fungible token became popular in 2021’s bull market. At that time, ‘jpegs’ were traded for millions of dollars worth of cryptocurrencies.
On December 27, the multi-billionaire and entrepreneur answered a comment on his platform, X (formerly Twitter). First, DogeDesigner asked if “anyone still remembers NFTs,” which Adrian Dittmann made fun of: “Web links to data You don’t own.”
In this context, Musk repeated part of what he had previously said on The Joe Rogan Experience podcast on October 31:
“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.”
— Elon Musk at The Joe Rogan Experience podcast on October 31
Elon Musk’s criticism of NFTs and the existing solution
Musk’s criticism comes from a well-informed knowledge of how the NFT market mostly works. Essentially, a centralized database hosts images (jpegs) linked to a non-fungible token hash ID in a given blockchain.
Therefore, investors are holding and trading the hash IDs, not the jpeg (or media) itself. This code is the real NFT, which can only be related to the desired media through the centralized database.
However, there are still working solutions for this noted issue. Some blockchain infrastructures and projects already inscribe the jpegs, videos, music, and other known NFT goods directly into the blockchain.
Notably, Leonidas (@LeonidasNFT) inscribed the clip of Elon Musk’s sayings as an Ordinals Inscription. This video is now an NFT on Bitcoin’s (BTC) blockchain, which investors can own and trade without a centralized database.
All things considered, the NFT technology is evolving, and other solutions will surge in time. Enthusiasts believe there is great value in inscribing media into the blockchain to hold and trade them without intermediaries.
Source: https://finbold.com/heres-what-elon-musk-thinks-about-nfts/