As I just about got my head around cryptocurrency, NFTs came along. At first, I didn't pay them too much attention. But as I noticed how musicians are adopting NFTs, my interests piqued. So, once again, I was off down a rabbit hole to find out more about NFT technology. How it's changing the way artists own and distribute music?
What is an NFT?
Let's start by taking it back to basics. Simply put, NFT stands for non-fungible token. I know what you're thinking; that doesn't make it any clearer. So, allow me to break it down.
'Non-fungible' means something is unique. It can't be replaced by anything else.
An example is: a £50 note is fungible as it can be traded or replaced for something of the same value. Something like a one-of-a-kind baseball card or diamond is non-fungible. In a nutshell, if you traded a one-of-a-kind item for something else, you'd have something completely different. It would ultimately be deemed non-fungible. The value of an NFT comes from its uniqueness.
How do NFTs work?
Ethereum's blockchain supports NFTs by powering smart contracts. The blockchain ensures that an NFT only has "one official owner at a time and they're secured by the Ethereum blockchain –no one can modify the record of ownership or copy/paste a new NFT into existence."
It is also worth mentioning here that other blockchains can implement their own version of NFTs. Some already have.
What qualifies as an NFT?
NFTs can be digital. From artwork like this Gucci ghost and tweets to music and GIFS. Even unique tangible items that need provable ownership. Including things such as one-off trainers, paintings and event tickets
How NTFs benefits musicians
The Ethereum website states that "content creators can sell their work anywhere and can access a global market", but what does that truly mean for musicians?
New streams of income
For musicians, NFTs offer a chance to provide fans with exclusive access to their content. There's no limit to what artists can do. From albums, digital artwork, photos, merchandise, and samples. Even exclusive performances, interviews, video footage, or events. Creators can distribute content like never before. If an artist is offering a one-off or limited-edition collectable, it can be sold as an NFT offering impressive returns.
One of the most valuable concepts of NTFs is that some will automatically pay out royalties to their creators. As this is an entirely automatic process, musicians can sit back and earn royalties and cut out the middleman. While the traditional royalties' model can be inaccurate and unfavourable to creators, by programming royalties into an NFT, they'll never miss out. Even if the NFT is sold on, the original creator will continue to receive their royalties automatically thanks to blockchain technology.
In the words of Ethereum: "NFTs power a new creator economy where creators don't hand ownership of their content over to the platforms, they use to publicise it. Ownership is baked into the content itself."
As the time NFTs began to gain momentum, particularly with artists in the US, the likes of Kano, Mike Skinner and Shy FX wrote to Boris Johnson [April 2021] calling for change to streaming laws, citing several shortcomings of current legislation. Perhaps NFTs are a solution?
Increased connection with fans
In addition to the removal of third parties offering artists better financial rewards and increased control, it also provides a more rewarding experience for fans. They were also offered the chance to get their hands on a limited-edition collectable. NFTs provide a unique opportunity to connect, both artists and fans get to reap the benefits.
Early adopters of NFTs
As the music world begins to embrace the concept of NTFs, we've seen several artists cash in from the growing phenomenon. Here are some examples:
As one of the first rappers to utilise NFTs, Lil Yachty managed to rake in over $16,000 for a single collectable in December 2020. He also launched $YACHTY tokens along with the collection coin, which was sold on the Nifty Gateway NFT marketplace. Ultimately with these tokens, fans can gain exclusive access to him via virtual events as well as surprise boxes prepared by his mother, Venita McCollum, (author of the book raising rapper).
According to Coindesk, the sale of the tokens brought in $276,006, with the social tokens selling out in just 21 minutes and 41 seconds. When speaking on the launch, Yachty explained to fans: "I'm still new and learning about the crypto world, but I can tell you I'm partnering up with some very smart people to give my fans some dope experiences."
On March 30, 2021, Snoop Dogg announced that he was auctioning his very first NFT collection via Crypto.com. The collection, dubbed "A Journey With The Dogg", chronicles the West Coast rapper's early career. The eight-piece art collection was put up for auction in limited quantities, including "Young Snoop", "Snoop Dogge Coins'' and "Death Row".
Speaking on the launch of the NFTs, Snoop said: "I've seen the game change over the years from analogue to digital." He added, "I'm always happier when technology lets the fans connect with the artists. NFTs are an amazing innovation…"
The following month, Snoop confirmed that one of his pieces garnered an impressive $100,000.
While many rappers are embracing digital NFTs, Ja Rule took a slightly different approach. Yet, on March 16, 2021, the rapper announced that he was the co-owner of a digital art platform called Flipkick.
What sets the platform apart is that they'll sell physical art as NFTs rather than taking an entirely digital approach. Ja Rule officially launched Flipkick with a 2017 painting of the Fyre Festival logo by Tripp Derrick Barnes. Certainly, an advertisement to remember.
Despite the risky choice, the painting sold for $122,000, which prompted Ja Rule to announce he was selling the infamous cheese sandwich tweet.
Lil Baby, 2 Chainz, Quavo, and Jack Harlow
March 2021 was a busy month for the launch of NFTs as March 7 saw NFT marketplace OpenSea announce a digital collection by Lil Baby, 2 Chainz, Quavo and Jack Harlow in partnership with Bleacher Report.
Furthermore as "part of their unofficial tip-off to NBA All-Star Sunday", the collection included four custom-designer basketballs incorporating music, sports and culture. Ten gold editions of each of the basketballs were then auctioned off on OpenSea, raking in over $591,000. And 2 Chainz's NFT sold for the highest amount, achieving around $68,000.
In August 2021, Tory Lanez released his first NFT album, "When it's Dark", exclusively on E-NFT.com. After the first round of sales, which reportedly saw a million copies sold in just 60 seconds, Lanez released a second round two weeks later.
In line with demand fans were able to pre-order up to 100 albums (e-NFTs) for $1 each. The album included seven new tracks and seven new art pieces, streaming exclusively via the E-NFT platform and app, Emmersive Entertainment. In the same month, All Hip Hop reported that Lanez claimed his NFT album was selling for $60,000. Documenting his Instagram video, they reported that Lanez claims to be revolutionising the music industry as he said: "This the digital trap house. Understand, look into it, do your research. This is revolutionary history in the making! The lowest copy right now is going for $30,000!"
One to watch: Emmersive Entertainments NFT streaming platform
In April 2021, Tramar Dillard, AKA Flo Rida, David J. Kovacs and Erik Hicks co-founded NFT streaming platform Emmersive Entertainment.
As reported by Forbes, the platform will primarily focus on "the development of one-of-a-kind augmented digital and physical tokens, as well as the expansions of the NFT market.
Speaking on their venture, Hicks explained: "Our ground-breaking E-NFT Emmersive Music Streaming Platform is a resplendent game changer and a paradigm shift," Hicks says. "As a result, it provides artists and collectors with a unique opportunity to connect in the resale open market."
While they can take some time to get your head around, there's no doubt NFTs are changing the music industry. As we continue to see developments in both technology and crypto, there’s no doubt that artists can create and control creative legacy while generating wealth like never before. Furthermore, as savvy fans also stand to benefit from NFTs, it’s a win-win for music lovers. Will you be investing in an NFT?