Updated: Jul 16
According to The Wall Street Journal, Electronic-music artist Justin Blau did a tokenized release of his three-year-old album “Ultraviolet” -- This NFT fetched him US $17 million in value at the time of writing.
Artists, painters, sports celebrities, musicians, and several others are now turning to NFTs to make money. Or at least, that’s the hope.
You could be skeptical. Or you could be cautiously optimistic.
But NFT is a technology like no other, and it’s coming to you.
What is NFT? How does it work?
Since Ethereum Blockchain made support available for NFT, it’s been official.
“A Non-Fungible Token (NFT) is used to identify something or someone in a unique way. This type of Token is perfect to be used on platforms that offer collectible items, access keys, lottery tickets, numbered seats for concerts and sports matches, etc. This special type of Token has amazing possibilities so it deserves a proper Standard, the ERC-721 came to solve that”
NFT (Non-Fungible Token) serves as a singularly unique marker for the digital asset it tags -- Unlike Bitcoin which is a decade-old cryptocurrency that usually trades for another bitcoin (or grows in value if you hold on to it as stocks do).
NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency (much like bitcoin) -- but its blockchain also supports these NFTs.
Think of NFTs as the first, original signature on a work of art, a music single, a piece of art, a precious collectible item, a collection of videos, a digital collage, or an even animated cartoon cat (or anything else that you might think there’d be value for).
Consider all of these assets (or potential assets). Each of those assets is assigned a unique NFT. Then, collectors can use the tokens attached to these assets to verify the authenticity of everything from artworks to sports highlights.
If NFTs are sold, they are sold at a perceived value and the transaction is recorded. Further selling only boosts the value further and the underlying asset balloons up in value (and hence price).
NFT for Music: Why should you be excited?
Historically, the music industry operates on a structure that almost resembles the age-old manufacturing-distribution-retail structure when it comes to business.
As such, artists in the music industry received an average of only 12% of all profits from the sales or streams of their music. The rest of the money goes to middlemen corporations (mostly streamers and labels).
All this, assuming that your music goes mainstream and sells in volumes. For beginner music artists, hobbyists, and those who are just getting started in the world of music production and music streaming, revenues are still hard to come by.
Music streaming services only pay pennies per stream and selling record labels has always been a cut-throat, competitive industry. As such, thanks to Covid-19, cancelled tours, semi-closed music production houses, and the fact that music artists have to hustle just to get by is only making matters worse.
With a backdrop like that, the fact that NFT is already huge in the world of art (and a few other random NFT wins), the music industry going all-digital will soon see NFT knocking on the doors.
Beeple’s US $69 million dollar deal and Justin Blau’s US $17 million certainly perks up the potential for NFT for musicians as well.
NFT Concerns for the Music Industry
Blockchain mining and blockchain security also make it a rather new frontier.
More importantly, for the music industry and individual music artists, how will you be compensated? Is the potential sale of NFT for music a one-time thing (based on luck?) or can it be a steady income producer?
As Bobby Owsinski of Forbes puts it:
“It’s a great use for blockchain in that it fulfills its promise to be a revenue generator for creators, but it’s not perfect by a long shot. We’re in for an interesting ride.”
We are certainly hoping that music artists have a future with NFT. What do you think of NFT for musicians?
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