Right now, everyone in the music industry is talking about NFTs. But there’s a few questions to answer here: What are they? Why are people willing to spend so much money on them? Can emerging artists benefit from NFTs?
We had a ton of DMs asking us to go into this topic, so in this article we’re going to explain everything you need to know about NFTs, how they are creating a new mode of monetisation for musicians, and how you, as an artist, can make use of them.
WTF is an NFT?
So what actually is an NFT? NFT stands for ‘Non-fungible token’. Essentially, it is a piece of digital art or media that lives online which you can purchase with cryptocurrency and have credible ownership rights for. This could be anything from video to audio, an image, or even a tweet.
Most forms of cryptocurrency are ‘fungible’ – in other words – you can exchange them or spend them in compatible online stores. You can’t do this with an NFT. Instead, they act more like a rare digital trading card. They are stored on a cloud-like structure known as a ‘blockchain’ where your ownership of the NFT is verified and you can only trade or sell it as a sort of collectible item.
NFTs can be sold at a specified face value or auctioned off to allow demand to drive the value higher. Usually, they are limited in quantity to increase the rarity and exclusive nature of the product. Plus, they can be resold as the value increases. Basically, they are only worth whatever someone is willing to pay for it.
What’s the Point?
We’ve already begun to see huge artists raking in thousands, if not millions from the sale of NFTs. Kings of Leon made around $2 million dollars through releasing their latest album in NFT format, whilst DJ 3LAU set a new record after selling just 33 NFTs for a staggering $11.6 million dollars. Each of his NFTs included custom artwork and songs, access to never-heard-before music and a limited edition vinyl pressing of his 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.
It’s 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’re going to be bold and say that NFTs could well be the biggest development to the music industry since streaming began, as they are paving the way for an alternative music economy. Here’s why…