The music industry may finally begin taking NFTs seriously in 2021. A few artists launched the NFT project, which attracted a lot of fan attention and raised millions of dollars. NFTs and crypto spaces are still very young, especially when it comes to music. But the more direct interaction between artists and fans and the potential for new ways to monetize their work without the need for traditional music publishers make this a promising technological development.
Here’s what you need to know about investing in and participating in music NFT spaces:
Investing in music NFT
NFTs came a few years ago when some digital art began to sell for millions of dollars. Speculative investors who have always been looking for ways to make money right away have begun to take an interest in this niche in the world of cryptocurrencies and blockchain technology.
What is Music NFT
NFT stands for “Non-Fungible Token” and is a type of digital certificate encoded in a blockchain network.Normally Ethereum (Cryptography: ETH) — It guarantees ownership of unique assets. This economic concept of substitutability is important because many works in the music and art industry that utilize NFTs are not NFTs in the strict sense of the word.
If it’s really unique and can’t be replaced with something like that, then something is irreplaceable. for example, original Song recordings are not substitutable, but copies of songs sold (such as digital downloads and physical albums) are substitutable because one copy can be replaced with the same one.
How Music NFT Works
A music NFT is a certificate of ownership of a unique piece of music that can be sold to other parties. The owner has the exclusive right to determine how the composition will be used.
The term “NFT” applies to all types of non-fungible tokens protected on the blockchain (meaning that multiple copies exist and are owned by different parties) and to the owner. Grants music, album art, videos created with music, or other rights. Exclusive access to content.
Apart from the clear definition of non-fungible tokens and substitutable tokens, Music NFT helps composers, bands and music artists connect and interact with listeners in new ways.
How NFTs can change the music industry
Music fans are a very enthusiastic audience. Selling music and related artwork through the blockchain is a way for artists to build a direct relationship with their fan base without the need for record labels or music streaming services. If done correctly, the cookie jar will have one less hand, which could be a greater benefit to the creator. However, creating a music NFT, as Ethereum gas charges (the cost of calculating and recording transactions on the blockchain) and NFT marketplace charges for listing and selling works may still be added. Is not free.
Can NFTs replace record labels and streaming giants? Probably not soon. There is something to say about the wide distribution that comes from partnering with more traditional industry business players. Nonetheless, payments to artists from music industry intermediaries have always been controversial, and the digital age is no exception, with many musicians blaming low payments from streaming services.
Over the past year, some prominent artists have begun to make large payments using NFTs, which could lay the foundation for yet another transformation of the music industry in the future.
3 Top Music NFTs
Last year, many artists tried out the NFT concept and became a hot topic among fans. Three of them are:
Kings of Leon
Rock group Kings of Leon NFT project NFT Yourself It helped to shed light on the possibilities of the world of musicians and cryptocurrencies.The band has sold a limited edition digital copy of their latest album When you look at yourself As an NFT, it came with digital art and collectable vinyl records. A variety of other album-themed works of art were also sold, some with special perks such as front row tickets for the Kings of Leon’s Lifelong Show. Sales of NFT albums were about $ 2.5 million.
2021 NFT Drop, Title by Musician and Visual Artist Grimes WarNymphsWas not just a music NFT, but a collection of art and video digitally created to the music.A single unique piece called Death of old It was auctioned at the Nifty Gateway on the NFT Marketplace for about $ 389,000. The Grimes NFT project has raised about $ 7 million.
DJ Justin Blau, well known for his stage name 3LAU, made music history by releasing his first blockchain-based album. Ultraviolet rays Earned $ 11.6 million in early 2021 — even though small fans followed and only 33 NFT-linked records were auctioned. The success of 3LAU proves the benefits of understanding the concept of supply and demand, which leads to our final topic.
How to Invest in Music NFT
Perhaps you are thinking of making music and the possibility of participating in an NFT battle. Or you could be a collector, investor, or speculator trying to determine if buying a music NFT is the right move. Either way, it’s a fresh and exciting move, but there’s no guarantee that you’ll make money.
If you’re considering creating an NFT, you may be able to use blockchain technology to build more direct relationships with your fans, but keep in mind that it’s not free. The fees for launching a project “on-chain” may actually be summed up. The same applies to the purchase of music NFTs. Resale revenue (if you later decide to sell the NFT) will be reduced by marketplace fees, Ethereum network gas fees, and royalties withheld by the artist when a secondary transaction is made.
When deciding which music NFT presents the best collection value (and how to start your own music NFT project), historic works of art are due to the associated creativity and overall quality of the work. Keep in mind that it’s not just worth it. .. The fact that they are unique is also worth it. For modern music, shortage is also valuable (like vintage records with few copies made).
Some music NFT projects generate a large number of digital tokens that represent ownership of digital copies of music and the art that accompanies it (substitutable tokens because one copy can be replaced with the same one). Will be). Investigate the successful NFT sales above and note how the supply of these tokens correlates directly with the final value of the project, as well as the demand from fans. The bottom line is that supply and demand are important considerations when buying music (or starting a music NFT) for the value of a collector’s item.
The music industry looks like a new frontier that confuses the crypto industry as artists start experimenting with NFTs and interacting with fan bases in new formats-thus becoming an impersonal musician-fan relationship. A streaming era that rejuvenates some personality into things. Buying a music NFT is not suitable for all investors, so take a quick step here. Artists also need to weigh the benefits of digging into their projects against traditional means of delivering music. But for those who want to be a little pioneer, NFTs could be at the forefront of another evolution in the large global music industry.