How Are NFTs Relevant To Today’s Music Industry
Ever heard about NFTs?
NFTs, cryptocurrency, and blockchain technology are all terms that you’ve probably heard in the past but may not have known how they related to your career as a musician. Well, now we might be on the brink of evolution for artistic expression with these new technologies which could disrupt this industry such as streaming has been done before.
NFTs (non-fungible tokens) are a relatively new phenomenon that allows for the monetization of digital goods and virtual currencies. They provide an innovative solution in today’s world, where artists need to be able to expand their fan base without relying on platforms like Spotify or Apple Music which prioritize play-count over originality.
It’s no surprise that big-name artists are starting to get into the world of crypto. After all, it was only last year when Deadmau5, Grimes, Kings of Leon, and Steve Aoki were among others who made headlines in this space with their successful sales numbers – 3LAU sold 12 million worth of NFTs in February 2021 alone. Other big-name musicians are also catching on to this new trend.
What exactly are NFTs, and why should musicians care about them? Read this article to find out what they are. You might be wondering if it’s worth getting into the music business when there is so much competition already on YouTube, Spotify, or SoundCloud – but we’ll go over how you can start selling your own NFTs!
What is an NFT?
Non-fungible tokens, or NFTs for short, are a way to represent ownership of digital assets.
“Fungible” means interchangeable so you can replace it by something with equal value such as money.
It’s pretty easy to understand when it comes to physical items like paintings, baseball cards and Pokémon. You can buy a first-edition Shadowless Charizard card from your local grocery store (or even online) you are likely to be able to sell them for a fair amount of money on eBay or elsewhere as they are valuable because certain quantities were printed – meaning no one else will have exactly what you do. It is simple to comprehend how much something is due to its uniqueness, rather than being mass produced with many different variations made by other companies.
But what about digital items? How can an mp3 file of a song be considered limited and appreciated in value if it is easily copied or uploaded to streaming services for everyone to hear? That’s where NFTs come into play – the non-fungible token is like your own personal copy with added tags that say “this file cannot be replicated.” In other words, you’re getting more than just an original Picasso painting: with all things being equal, this way your favorite tunes will always have some kind of special quality because nobody else, only you will have the exact one that you have.
It has never been this easy to get into the music industry! This is such a game-changing moment for fans, collectors and artists alike. With all of these new opportunities that allow one access investment in songs, videos or digital artwork as they would invest with physical art. There are limitless possibilities on how we can experience our favorite content creatively – whether it be through collecting memorabilia from your favorite artists, listening while doing other tasks such as cooking at home together over a Spotify playlists curated especially just by them or buying exclusive merchandise directly from those who create it themselves via their own webstore portal or website.
You know that feeling you receive when someone hands over a rare, valuable item to you? It’s almost spiritual. Now imagine if there was an entire market for those items online and you could sell them again. Do you love vinyl records? The ones that are signed by your favorite band and can’t be duplicated? Well, now there’s a way to own physical media in 2021 with NFTs.
NFTs are an innovative new way for artists to monetize their work. They function in precisely the same manner as other types of digital rights management do: releasing 15 unique NFTS containing a special remix version of your song, only you will ever be able (unless someone else purchases them) own these pieces-of-demand; furthermore this license can’t copy or delete from either yourself or your computer. These clever bits allow creators greater financial opportunities also giving fans more access than they would normally afford.
You may be wondering, “Can’t everyone else still listen to this remix on Spotify or YouTube?” Yes, but it’s taking a photo-copy and printing them out. They’ll look exactly the same as the original painting; however they won’t have that authenticity tag which makes them less valuable in comparison due to their ability to simply replicate what was done before with no effort at all.
So what does NFTs mean to the music industry?
In a world where fans can now directly purchase music from artists, the relationship between artist and fan is changed forever. There’s no third-party gatekeeper in this transaction like with physical or digital releases—the people who produce your favorite songs are right there on every level. NFTs are a revolutionary way for artists and their fans to interact. This new type of digital currency allows direct transactions between the people who make the music, as well as those that listen to it – there’s no need for middlemen such as record labels or streaming platforms.
Let’s take a look at what this all means in more detail.
- Fans can now have a chance to invest in your career
Artists always needed to find ways of connecting with their listeners, now it’s more important than ever. Artists can learn about their fan base by looking at streaming numbers and basic statistics- not knowing much else about the people who make up these numbers, can be challenging for some artists in this day and age, where marketing opportunities are few.
With so few opportunities for artists to learn about their listeners, no wonder the music industry is in such an uncertain state. But with NFTs – or “non-fungible tokens”– your biggest fan can actually show what they really care about, by investing in you and becoming part of a community where everyone feels like they belongs.
If you’re an up-and-coming artist, it’s important to give your fans a chance to tell the world how much they believe in your success. They’ll be able to buy NFTs, if they ever become valuable as time goes on,, then it will be worth much more.
Some of the best art is sold by artists who aren’t yet famous. They sell their work for pennies on social media, and then demand that people buy it or give feedback so they can grow in popularity – which can drive up its value. Great for both the buyer and the seller alike; this helps attract new buyers also making sure you don’t have any regrets once an NFT becomes more valuable than what was originally bought from them.
Lastly, NFTs can be used to fund your next project, the future of crowdfunding. If you’re unsure how much money it will take for an album, but have ideas on what songs should be on it in order to make a great record, then consider selling some NFT tokens in order to raise funds.
- Get in touch with your fans and offer them exclusive perks
With NFTs being new to most people, it’s understandable that artists are hesitant about creating a significant amount of money for ownership. That’s why many digital products include exclusive perks or experiences buyers can redeem in real life.
For example, the Kings of Leon released an NFT that includes their new album, also four front-row seats to any concert in perpetuity. One 3LAU’s packages provides you with creative control over what song he creates for his fans.
NFTs provide buyers with many exciting perks, such as discounts on their purchases, and the ability to resell NFTs at a higher price. These benefits are passed along when an individual sells in-game items, so that they can get more for their money.
- You have the potential to make a lot more money
Have you ever wondered how much money an average musician makes from their music? Well, the truth is that most artists only take home 12 percent of streaming profits alone. Unfortunately for them this means it’s not worth investing in, due to low royalties and lack-of earnings on capital investments which were made when producing tracks or albums, because there will never be enough return into your pocket.
NFTs give artists a chance to have an open, direct transaction with their fans. They keep virtually all of the money they make from sales that don’t depend on how many people purchase items, for profit margins like those offered by Spotify at $0.0032 per stream or even lower than this in some cases.
Selling your NFTs at a set price, or setting up an auction can be the key to making more money. If you have 500 devoted fans with the means and desire to support your career, then it’s likely that an auction could result in higher profits. For example 3LAU made $12 million just one night by setting up ten highly sought-after NFTs for sale at set prices – all from their fan base.
You can also set up your NFTs to collect royalties when a new token holder purchases the cryptocurrency. 10% from every sale for all time? Not too shabby at all!
Getting started with selling NFTs
If you’re looking to invest in NFTs, it is important that you have a basic understanding of how cryptocurrencies and blockchain technology work. Cryptocurrencies like Ethereum, Polkadot and Cardano are necessary for the exclusive use of NFTs. They can only be accessed with these cryptocurrencies, in order to protect their value from being diluted on an exchange or hacked by someone else who may have gained access through weak security measures at another platform when you stored your tokens offline.
Ethereum is the most popular choice for cryptocurrencies, so it makes sense that your dollars will be converted to Ethers (ETH). You can then use those funds in exchange for NFTs. However before you do anything else such as buy or sell crypto-resources, make sure there’s enough tokens sitting inside an Ethereum wallet.. An Ethereum wallet is the most effective way to buy and sell NFTs. The conversion process will happen automatically, you have to wait patiently as they are being converted.
Now that you have your Ether, it’s time for some market research and excavation. Some popular places to sell NFTs are SuperRare, Rarible, and OpenSea.Connect your Ethereum wallet to the marketplace, you’re good to go.
Marketplaces have slightly different processes, generally each one will walk you through the process of uploading your files and mint tokens. You can select how many editions are created from this first release, as well as decide whether there is a fixed price or an auction for them; set any royalties collected during resale transactions as well. Once everything has been paid in full with transaction fees, then it’s time to make some new money.
The best way to increase revenue for your NFTs is to share the new ones with other fans. This will give them a reason to buy and attract new traffic of individuals who are looking at coins as investments or collectibles. The best way to get your NFTs out there is through social media. Share the news with all of your fans in order for them to see, also buy what you have available.
Are NFTs not environment-friendly?
NFTs are creating a lot of controversy in the media, and it’s important we address why they use so much energy. We also need to clear up some misconceptions about their environmental cost each transaction uses as much or more electricity than your home. Blockchain technology will continue evolving with new advances like plasma channels, for slightly lower power consumption on average per day when compared against today’s blockchain methods. Hopefully by then, this article has helped you understand how these changes can help us achieve our future sustainable goals.
Blockchain’s security is one of its most important features, it can’t be hacked. Blockchain uses a proof-of-work method to verify each transaction on the network which consists of thousands racing against each other, in order to get rewards for solving complex math puzzles with their computer power.
The Ethereum network has an annual carbon footprint comparable to that of Lithuania. To put things into perspective, this involves thousands of very powerful computers that use up lots of coal, and electricity just so they can create what you want on your computer screen.
The media has recently been trying to calculate the carbon footprint of each NFT transaction. However, at first glance this seems as though you’re saving your environment by refusing any type or purchase with an exchange that utilizes cryptocurrencies. In reality it’s actually due to how many computers verify these transactions, which have a big impact on how much energy they use not necessarily because there are more total numbers across all platforms.
A lot of people are talking about blockchain and cryptocurrencies, not many know the full scope. For every transaction that doesn’t happen there will be another one to take its place in this ecosystem – for instance NFTs just represent a small piece of what’s possible with Ethereum transactions! Then you have Bitcoin which has an environmental impact all its own.
One way to encourage the use of blockchain technologies and reduce wasted energy is not discouraging people from using it, instead changing how all systems work. Even the Ethereum founder admitted that there’s currently a huge waste going on with our current system for mining Ethers (the cryptocurrency).
Ethereum is already well on its way to introducing an alternative model for verifying transactions called proof-of-stake. This new system drastically reduces carbon emissions by 99% it will go live in early 2022, this is a great alternative to the proof-of-work method that consumes so much energy these days.
So, are blockchain technologies wasteful? Yes, somehow it is. But will discouraging and stopping people from selling and buying NFTs help solve the issue? Not really.
Is it all worth it?
The recent boom in the value of NFTs is causing prices to skyrocket. However, many people fear that when this hype dies down there will be no more gains, and buyers are warning each other that their cryptocurrency investments may lose money if they purchase now, whilst others say these digital coins were doomed from the start. Then again, there were also those people who said the internet would die within a few years but look where it is now? So, maybe this new craze isn’t quite as bad after all.
Are NFTs a fad, or are they the future? It’s hard to say right now.
If you’re seriously considering selling your music through an online platform that uses this new form of currency (NFT), there is one thing that you need to know: do research and make sure your fan base can accept them before pushing forward with any ideas about releasing physical copies. You probably aren’t Kings Of Leon or 3LAU, so don’t expect that you will be making millions overnight on these platforms; instead take into consideration the limitations in which creators may not reach all demographics across different geographies due to some fans who prefer owning records rather than streaming songs digitally like many younger generations seem inclined towards nowadays.
Minting tokens is not a cheap and straightforward process. Many people are actually losing money because they pay the initial transaction fee for mintings, but then fail to make any sales either due their prices being too high or having no fans who can invest in them as well. The world of cryptocurrency has been plagued with stories of massive gains and losses. It is not difficult to get started, but it still requires a lot in terms of investments – both financially and time wise. There will always be a success as well as failure story, even in blockchain.
At this point, it’s a gamble. But it definitely has all the potential for forever-changing how we monetize creative expressions. But only time can tell.