Ever since it became possible to stream music digitally, musicians have struggled to mitigate the economic impact of easy, often copyright-violated access to musical creations. The innovation of NFTs may present a long-term solution for artists who have seen a reduction in their music sales or who are seeing their music distributed without their permission.
In fact, there’s been a kind of NFT gold rush recently, as exemplified by the auction of $5.8 million worth of digital art pieces by Canadian musician Grimes within 20 minutes of starting the bidding on February 28. Electronic musician 3LAU also sold $11.6 million in NFTs, and the Puerto Rican singer Ozuna sold a batch of NFT music for $800,000. Those are impressive numbers, but what is NFT backed digital music?
What are NFTs?
NFT stands for a non-fungible token, and the fungible part just means replaceable. So, NFTs are non-replaceable tokens. You can think of it like this — if you loan your friend $10, they can pay you back with another $10; it doesn’t have to be the exact same bill.
So that means cash money is fungible — it is replaceable by another bill of equivalent value. But NFTs are non-fungible. They are unique identifiers, a kind of digital certification of authenticity. When you buy anything that is NFT backed, you have proof of ownership no matter how many other copies of the item there may be. In fact, it is your unique proof of ownership that gives the item its value.
How are NFTs Tied to Music?
Because digital music or other kinds of digital artwork are easily copied and distributed, if a piece of work is attached to an NFT, the customer will have a unique identifier that proves they own the work. The artwork might not be rare — there might be many copies — but the token is what is rare.
Additionally, artists can attach NFTs to a piece of work that will allow the buyer to have extra perks like discounts for live shows or distinctive album copies. There are widespread uses for this kind of technology in the music industry, and it’s also possible to incorporate other forms of art in an NFT.
For example, Grimes sold pictures of babies carrying spears through space with some of her musical snippets attached. She was effectively combining her music with visual artwork in a kind of digital album cover. This gives the musicians much more artistic freedom to express themselves in a variety of ways.
How do NFTs work?
NFTs are backed by blockchain technology which is what has been used for cryptocurrencies like Bitcoin. Blockchain is a distributed ledger of transactions that is transparent to users in a virtual community — although your identity remains confidential — and it is virtually tamper-proof. This is because the transactions in a blockchain are decentralized — they are stored on multiple computers, separated into blocks of data, and chained together. Additionally, the transactions are verified by the community of users who store them.
It’s this technology that can revolutionize the digital music industry. If you buy an NFT, for example, you can see a list of previous transactions, and you can be certain the item is exactly as advertised. Musicians can sell their music directly to their fans without having to go through a streaming platform. Moreover, some music sales platforms will also give artists royalty for secondary sales of their work.
This can be easily tracked because the musical creation is tied to an NFT, a unique identifier. NFTs have actually been around for a long time, but they didn’t really take off until late in 2017 when CryptoKitties became a fad. These were tradeable cartoon cats that were so popular they actually slowed down the Ethereum main net, the blockchain platform on which they were being sold.
Since that time, the range of NFT sales has been consistently growing, and it became a genuine phenomenon when the graphic designer Beeple sold NFT backed visual art pieces for millions. NFTs are now the wave of the future for visual and musical artists and cryptocurrencies and virtually any other digital commodity.
Why are NFTs Gaining So Much Popularity Now?
Part of the reason NFTs are becoming more well-known is the success of Bitcoin, which has been setting records in the markets. They’ve also been used widely in the gaming industry and are even growing in popularity in the digital fashion industry.
For musicians, the impact of the COVID-19 pandemic has prevented artists from touring, and that has given many of them the extra incentive to look for other sources of income. Additionally, their fans have been spending more time than ever staring at digital screens while staying at home. Many of those fans can afford to purchase NFTs and like the idea of enhancing their status by owning a unique piece of musical art.
The NFT gives the owners a digital certificate of authenticity that is actually what is valuable since it is unique. The artwork may be reproduced infinitely, but the NFT cannot be replicated. That may ultimately change how we think about the ideas of ‘art’ and ‘authenticity,’ but hasn’t that always been a topic of debate?
Are NFTs Only for the Wealthy?
While NFTs linked to artwork have been a luxury for those who can afford them to this point, the truth is that, as we move ever deeper into the metaverse, which is increasingly merging our physical and digital worlds, NFTs are the wave of the future. NFT backed blockchain technology is revolutionizing the way we navigate in the digital ecosystem.
Because they are unique identifiers, NFTs are hack-proof, and blockchain technology secures the transactions made using them. As people understand just how safe this technology is, it will become more widespread in its use.
For the musicians and record labels who use it, they are gaining more economic clout, which they have lacked in the online world for a long time. Music consumers get a unique piece of art that could even be bought and sold in a similar manner as baseball cards or collectible stamps.
To Sum It All Up
NFTs aren’t going anywhere anytime soon, and they are redefining how we think about art. It isn’t the reproducible art that gives the piece its value; instead, it’s the NFT attached to it. It’s like buying a Picasso to get the frame.
While there are still a number of wrinkles to iron out with this technology, it’s clear that in our digital world, it gives value to art that has never physically existed. It also bridges the gap between consumers and musicians. It allows the songwriters to sell their work directly to the consumer and even give them unique perks for their purchase.
For the consumer, they are empowered by the ability to take matters into their own hands in order to own one-of-a-kind pieces of art. With some of the biggest rock bands in the world — like the Kings of Leon — using NFTs for their music, it will undoubtedly give the current momentum a boost.
Though there is a learning curve with this new technology, musicians are increasingly attaching it to something consumers are familiar with, like an album bundle, and that is helping to introduce their fans to this novel way of interacting with their favorite songwriters. As more big-name artists like U2 get on board, it’s becoming ever more apparent that the music and technology industries are irreversibly interconnected. That’s ultimately good for everyone concerned.