The NFT Craze: Could The Non-Fungible Token Be The Future?
NFT has taken the art world by storm. The music industry hopes to cash in as well on the digital goldrush.
Non-fungible tokens (NFTs) are all the rage in the music industry right now. Electronic dance music producers 3LAU and Steve Aoki have sold theirs for 7-figure sums.
Grimes recently sold an NFT artwork for around $6 million in just twenty minutes.
Linkin Park’s Mike Shinoda sold a digital piece of art for $30,000 via NFT. He explained why he embraced the technology on Twitter. “Even if I upload the full version of the contained song to DSPs worldwide (which I can still do), I would never even get close to $10k, after fees by DSPs, label, marketing, etc.”
Kings Of Leon just racked up around $2 million selling them bundled with their new album.
Some of you might be saying: “What’s the point in some of this NFT content if other people can still see it or listen to it elsewhere online?” and you’re right – you could simply go stream Kings of Leon’s new album on Spotify.
However, it’s not so much about the accessibility of the content, but the actual ownership certification of the original asset and the bragging rights that come with it.
NFT in short:
The term NFT stands for non-fungible tokens, unlike bitcoins, where they are fungible. In other words, unique digital collectibles that can be purchased, including things that you can’t imagine buying.. like a tweet, a virtual card, animation or picture of your choice. But keep in mind, to own it you should own its digital record, and to do so you need to buy its NFT.
NFTs are unique:
You are probably wondering why anybody would pay a pile of money for a .JPG file right? Well, the answer is OWNERSHIP.
"You can go to the Louvre and take a picture of the Mona Lisa, and you can have it there, but it doesn't have any value because it doesn't have the provenance or the history of the work," said Rodriguez-Fraile, who bought Beeple’s 10-second piece for $6.6 Million.
How are NFTs made, where to buy them?
NFTs, just like other cryptocurrencies and blockchain, run on an algorithm called Proof-of-work (POW). There are two parties involved in the process, where provers verify the letter that an amount of computational effort has been lengthened for a specific purpose.
Because of its increasing popularity, tokens are highly demanded. To buy NFTs, you should wait for 'drops’ aka events, and be sure to register and have a wallet that fits with a cryptocurrency.
The only two downfalls of NFTs are issues related to copyrights and its ecological footprint.
“The average NFT has a footprint of around 340 kWh, 211 KgCO2. This single NFT’s footprint is equivalent to an EU resident’s total electric power consumption for more than a month, with emissions equivalent to driving for 1000Km, or flying for 2 hours,” according to Akten’s medium post.
It is believed that a single NFT has more carbon emission footprint than the whole process of creating, buying, selling, and packaging. But undoubtedly, the NFT hype is here for some time, especially after A-list celebrities joined the game, such as Grimes and her billionaire boyfriend, Elon Musk.
The pandemic has pushed people to explore the digital realm, and many are in fact enjoying the ride. Imagine you find yourself creating Whatsapp stickers and selling them for millions.
The NFT market sales have grown on OpenSea from $8 million in January to $95.2 million in February.
We have compiled a list of websites that sell NFTs:
How will NFTs impact the music industry? Can emerging artists benefit from NFTs 🖼
The State of Monetization in the Music Industry.
Where this gets interesting is after these NFT sales have been completed...Imagine multiple people owning a record and automatically collecting digital royalties from their share of your own music because of their investment in your release or career.
Blockchain projects harness power of communities to fund initial offerings and this is where artists and fans can bridge their gap.
How? Picture artists pre-selling music to a community who will then be able to own a piece of their art, as an NFT. And resell at a higher value after sometime.
This will create the opportunity to buy “shares” in an artist’s work before it’s even been released – also creating an alternative source of funding for the artists themselves.
If Steve Aoki’s and 3LAU’s fanbase paid millions to own an exclusive copy of their latest release, how much would they be willing to spend to actually own a piece of their catalog?
NFTs promise to play an important role in the music industry and has become a transformative harbinger of the business’s future.
There will be many people, with a lot of spare cash, who want to invest in up-and-coming artists before they hit the big time. This could be achieved through purchasing an NFT early on and watching the value rise as that artist grows to superstardom.
Strengthening The Fan Connection.
These NFT assets could be ushering in a revolution in fan to artist relationships. It will also change the power dynamics between artists and their labels. NFTs connect fans directly with their creators.
Exclusive Content Is Revolutionizing The Music Industry.
NFT is a bit like going to a gig and catching something that the band throws into the crowd at the end, like a drumstick or guitar plectrum – you gain a stronger connection to the artist through owning this item that you know is one-of-a-kind.
We already see artists with dedicated fanbases generating revenues on platforms like Patreon and Bandcamp, purchasing limited edition release merch or vinyls for substantial sums – even paying more than the list price or donating to the artist out of their own good will and loyalty.
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