The music industry may have finally started taking ENF seriously in 2021. Various artists have launched NFT projects that have captured fan attention and raised millions of dollars. The field of NFTs and cryptocurrencies is still very young, especially when it comes to music. But the possibility of more direct interaction between artists and fans and new ways to monetize work without resorting to traditional music labels make this a promising technological development.
Here’s what you need to know to invest and participate in the NFT music space.
Invest in musical NFT
NFTs burst onto the scene a few years ago when some digital artworks started selling for millions of dollars. Speculative investors, always looking for a way to make a quick buck, have taken an interest in this niche in the world of cryptocurrencies and blockchain technology.
What is a musical NFT?
NFT is short for “non-fungible token”, which is a type of digital certificate encoded on a blockchain network, typically Ethereum (CRYPTO: ETH), that guarantees the ownership of a single asset. This inexpensive concept of fungibility is important because many works in the music and arts industries that use NDT are not really NDT in the true sense of the term.
A thing is interchangeable if it is truly unique and cannot be replaced by something equally unique. For example, the original recording of a musical work is irreplaceable, but sold copies (such as a digital download or a physical album) are expendable because one copy can be replaced by another identical copy.
How Musical NFTs Work
A musical TNF is a certificate of ownership of a single musical work that can be sold elsewhere. The owner has the exclusive right to determine how the composition is used.
The term “NFT” is used to refer to various types of exchangeable tokens (meaning that there are multiple copies belonging to different parties) secured on a blockchain that grant the owner the right to music, album art, or music videos created to accompany the music, or other exclusive access to content.
Setting aside strict definitions of what an immutable or changing token is, musical ENTs help music composers, bands, and artists connect and interact with listeners in new ways.
How NFTs Could Change the Music Industry
Music lovers are a very engaged audience. Selling music and related artwork via blockchain is a way for artists to build a direct relationship with their fanbase without the need for a record label or music streaming service. Done right, it can translate to higher profits for the creator, as there is one less hand in the cookie jar. However, NFT music mining is not free, as the Ethereum gas fee (the cost of calculating and recording the transaction on the blockchain) and the NFT market fee to launch and sell the work can still add up.
Can NFTs Replace Record Companies and Streaming Giants? Probably not soon. There is something to be said for the broad distribution that can be achieved by partnering with a more traditional business player in the industry. However, payments made to artists by music industry intermediaries remain controversial and the digital age is no different, with many musicians denouncing low payments for streaming services.
As some well-known artists started funding large payments using NFT last year, the foundation could be laid to further transform the music industry in the future.
The top three musical NFTs
Over the past year, various artists experimented with the concept of NFT, causing fans to become agitated.
Here are three:
Kings of Leon
Rock band Kings of Leon’s NFT Yourself project shed light on the possibilities for musicians and the world of cryptocurrencies. The group sold digital copies of their latest album When You See Yourself as a limited edition by NFT, which included digital illustrations and a collectible vinyl record. Several other art objects based on the album’s theme were also sold, with special benefits for some of them, such as lifetime tickets to Kings of Leon concerts. NFT’s album sales reached approximately $ 2.5 million.
The NFT 2021 release from musician and visual artist Grimes titled WarNymphs was not just a musical NFT, but a collection of digitally created art and music videos. A single coin called Death of the Old sold for almost $ 389,000 on the NFT Nifty Gateway marketplace. This NFT project has raised about $ 7 million.
DJ Justin Blau, better known by his stage name 3LAU, made music history by releasing the blockchain debut album Ultraviolet in early 2021 and made $ 11.6 million, though he only has a small fanbase and has only auctioned 33 related vinyl records. with NFT. The success of 3LAU shows that it is good to understand the concept of supply and demand, which brings us to our last topic.
How to invest in musical ENF
Maybe you’re making music and considering getting into the NFT fray. Or maybe you’re a collector, investor, or speculator trying to decide whether buying NFT musicals is the right decision. Either way, this is an exciting new move, but there is no guarantee that you will make any money from it.
If you are considering an NFT, remember that by using blockchain technology you can build a more direct relationship with fans, but it is not free. The costs of managing a “chain” project can really add up. The same goes for buying NFT music. The proceeds from its resale (if you decide to sell the NFT later) will be reduced by market fees, gas fees on the Ethereum network, and royalties the artist retains on secondary transactions. When deciding which musical ENFs have the best collection value (and how to start your own musical ENF project), keep in mind that historical artworks are not valued just for creativity or the overall quality of the work. They are also valuable because they are unique. In the case of modern music, rarity also has a value (for example, an old vinyl record of which very few copies have been made).
Some NFT music projects produce a large number of digital tokens that represent ownership of digital copies of the music and accompanying art (which become exchangeable tokens because one copy can be replaced by another identical copy). Study the successful sales of NFT above and see how the supply of these tokens, not just fan demand, is directly related to the final value of the project. In short, if you are buying music (or managing a music NFT) for its potential collection value, supply and demand are important factors.
The music business appears to be a new frontier for the cryptocurrency industry to disrupt as artists begin to experiment with NFT and engage with their fans in a new format. Buying musical NFTs is not suitable for all investors, so caution should be exercised. And artists should consider the advantages of starting their own project over more traditional music distribution methods. However, for those willing to follow the trail a bit, NFTs could be at the forefront of the next evolution of the huge global music industry.
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