Musk NFTs are not even on the blockchain, it’s just a URL pointing to a JPEG.

Musk NFTs Lack True Blockchain Integration, Merely a URL Linked to a JPEG

Author: Mlixy, W3C DAO

First, let’s take a look at what Elon Musk said on Joe Rogan’s podcast. According to reports, when they were discussing NFTs, Musk said:

“The NFT is not even on the blockchain it’s just a URL to the JPEG. You should at least encode the JPEG in the blockchain. If the company hosting the image goes out of business you don’t have the image anymore.”

• Thirteen Trends Tell You the Future of NFT Marketing Services
• Building an Engaged NFT Community: 12 Practical and Hilarious Tips
• The Ripple Revolution 3 Million NFTs Minted on XRP Ledger – Is Adoption Taking Off?

“NFT 甚至不在区块链上，它只是 JPEG 的 URL。你至少应该在区块链中对 JPEG 进行编码。如果存放图像的公司倒闭，你就不再拥有该图像了”。

Musk’s statement has sparked a lot of controversy and discussion. Some people believe that he is devaluing the worth and significance of NFTs, while others think he is exposing the essence and limitations of NFTs. So, does Musk’s statement make sense?

We need to analyze it based on the concepts and technology of NFTs and blockchain.

NFT stands for Non-Fungible Tokens. It is a type of digital asset based on blockchain technology, characterized by uniqueness, indivisibility, and non-substitutability. NFTs can represent various types of digital content, such as images, music, videos, game items, artworks, etc. The emergence of NFTs provides digital content creators with a new way to establish ownership and monetize their creations, and also offers a new investment and appreciation method for digital collectors.

Blockchain is a decentralized distributed ledger technology that ensures data security, immutability, and traceability through cryptography and consensus mechanisms. Data on the blockchain is stored and transmitted in blocks, and each block contains a hash value of the previous block, forming a chain-like structure. The data on the blockchain is maintained and verified by multiple nodes in the network, eliminating single points of failure or centralized control.

NFTs are implemented as smart contracts on the blockchain. They are codes that automatically execute predefined rules and logic. NFTs use smart contracts to define ownership, attributes, transfer rules, and other information about the digital content, and record them on the blockchain. When users purchase or trade NFTs, it is like conducting a transaction on the blockchain, transferring the smart contract corresponding to the NFT from one address to another and paying the corresponding fees.

So, does Musk’s statement that NFTs are just URLs to JPEGs make sense? Yes, but it is also controversial.

The correct part is that NFTs themselves do not store the actual digital content, but only the metadata of the digital content, which includes descriptive information such as the name, author, copyright, timestamp, and a link (URL) to the location of the digital content.

This link usually points to a URL where the JPEG or other file formats are stored on a server, or it could point to a hash value of a file stored on a distributed storage network like IPFS. Therefore, in a sense, NFTs are indeed just URLs to JPEGs or other files. If they point to a centralized server, there can be serious risks involved.

The controversial part is that NFT is not just a URL, but a smart contract that contains the URL and other information. It has clear ownership and transfer records on the blockchain.

This means that NFT owners can prove their ownership of digital content through the blockchain and can transfer or authorize their ownership through the blockchain. This is functionality and value that a URL cannot provide.

Therefore, in another sense, NFT is not just a URL, but a certificate of authenticity for digital content.

The storage method of NFT is determined by the artist or platform, so the corresponding photos, videos, and other files in NFT may be stored on centralized servers or decentralized storage.

1. CryptoPunks: Initially, CryptoPunks aggregated 10,000 characters into one image to save gas fees and stored the hash value of this image in a smart contract on the blockchain, without revealing the storage location of its original data. As the storage risk of NFTs received more attention, CryptoPunks spent 75 million gas fees to store all avatars on the Ethereum blockchain.

2. Bored Ape Yacht Club: Bored Ape Yacht Club has 10,000 distinct ape avatar. All avatars have been minted and can be purchased on secondary trading platforms. BAYC has released the TokenID, SHA-256 hash value, and IPFS hash value of each avatar on its official website. It also backed up the media data of each avatar in a decentralized storage system and published the backup information.

These examples demonstrate that NFTs can adopt different storage methods, including centralized and decentralized ones.

In summary, Musk’s statement reflects some issues currently existing in NFTs, but it may overlook another truth about NFTs. NFTs are both a URL pointing to a JPEG or other file and a certificate of authenticity for digital content. They have limitations and potential. They present challenges and opportunities. They generate controversies and consensus.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!