Elon Musk has once again expressed his opinion on NFTs, a tradeable media associated with a non-fungible token on a blockchain that gained popularity during the bull market of 2021.
"Jpegs" were exchanged for cryptocurrency valued at millions of dollars at that time.
The multibillionaire and businessman responded to a message on his platform, X (previously Twitter).
It started with the X post by Adrian Dittmann making fun of DogeDesigner's question, "Anyone still remembers NFTs," by saying, "Web links to data You don't own."
In a response to Dittman, 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.”
Musk's critique stems from a thorough understanding of the general operation of the NFT market, according to Finbold.
Basically, on a particular blockchain, a centralised database stores JPEG images that are associated with a non-fungible token hash ID.
Consequently, rather than the jpeg (or other media) itself, investors are holding and trading the hash IDs. The only way to link this code—the actual NFT—to the required media is via the centralised database.
Nevertheless, there are still effective fixes for this recognised problem. JPEGs, movies, music, and other well-known NFT items are already directly indexed into the blockchain by certain blockchain infrastructures and projects.