What Are NFTs and Why They Are Good for the Music Industry

Music producer 3LAU has sold a collection of 33 NFTs for a total of $11.7M.

NFTs (Non-fungible tokens) have taken the music industry by storm. Artists are looking for other ways to profit from their art and they have surely found one in the cryptocurrencies and digital art medium. Digital artists are selling their art as unique tokens and they have realized that this is a great way to mint and showcase their art on the blockchain, and also to earn money in doing that.

You don’t know what NFTs are and why everyone is hyped about them? No problem. I’ll tell you everything you need to know about them below.

NFT stands for “non-fungible token.” This kind of token is like Bitcoin or a one-dollar bill, except while you can trade Bitcoin and use that dollar bill and have more of the same thing that represents real money at a varying market value and have real use cases (especially the dollar bill), each NFT is unique. You can’t trade one NFT for another NFT, as they have a singular identity, value and scarcity. So NFTs are a form of digital asset, whose ownership is recorded on a blockchain. They are immutable, have one clear owner, and can be traded as collectibles due to their scarcity.

What’s a blockchain? Well, it’s a ledger of entries that lives online that keeps a publicly accesible record of who owns what. For example, Bitcoin is powered by a blockchain and that makes it such a powerful concept of digital money. NFTs are powered by a similar blockchain, but that of Ethereum which has the ability of creating smart-contracts. Smart-contracts, are just that: contracts that are purely digital and are enforced by programming code that makes them smart and eliminates the need for third parties.

How can a music producer/DJ benefit from the power of NFTs?

It’s easy enough to wrap your head around the fact that a piece of music, for example, can be produced by an artist and released online to the public. Then, that piece of music can be found, listened to, recorded, and downloaded by anyone online. The deeper concepts of NFT art are agreed-upon value and ownership. Even though anyone can download it, record it, or even screenshot the visual art that accompanies it, only a select few can actually own that exact piece. You buy an NFT (say a piece of music from a music producer you love) and the unique bit of information about that song – including its smart contract – is stored on the blockchain. It proves you own it.

Let’s look at some examples. Music producer 3LAU has sold a collection of 33 NFTs for a total of $11.7M. The collection that was auctioned included different unreleased music and unique experiences such as custom song with the winner’s creative direction, which was won by the top bidder for $3,666,666. You can listen to a preview of those NFTs here.

Steve Aoki, is also dropping this NFT soon.

Don Diablo tweeted this, as well.

Why are NFTs good for the music industry?

NFTs became popular right when it was needed the most. Artists are struggling right now with not so many gigs to play, festivals being closed and everything is uncertain due to the pandemic. Selling your art as NFTs seems the right way to engage with your fans and also to profit from your music in these harsh times. It creates a feeling of real ownership that wasn’t possible before for the fans that buy artists’ NFTs, and also the fans directly support the artist through this. It’s a win-win situation and we can’t wait to see what the future holds.

If you are an artist and want to create and sell your own NFT, hit me up at razvan[@]edmnomad.com for more info. I’ll gladly help you set up your NFT and release it to your fans.

Răzvan
Thinker-at-large involved in media, music, cryptocurrency, space exploration, and artificial intelligence.

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