If you go to an art gallery and notice a striking painting, you may have the opportunity to purchase that piece of art. Depending on the artist’s reputation, you could own a valuable asset. But this is the case only if the value of the work goes up. However, there’s also the scenario where the painting can lose its value. In both cases, you take a chance with that piece of art and decide to buy it because you find it alluring. This financial model is common in fine arts and is now transcending into the digital realm, not only with well-known NFTs but also with a unique digital asset, namely music NFTs.
Some believe music NFTs could redefine the future of the music industry. But some say it’s just a fad that isn’t likely to last. So, are music NFTs viable or not? Well, it seems that this digital asset is a powerful tool that has the potential to turn an audience into a community.
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What are Music NFTs Anyway?
NFTs are non-fungible tokens that live on the blockchain. Unlike cryptocurrencies, these tokens are irreplaceable, and you can’t trade or exchange them. While a regular NFT is only a visual asset, music NFTs also include a musical component. Since streaming has become a thing, musicians have had fewer opportunities to make money. However, through music NFTs, fans can invest in their favorite artists while making their own financial profits in return. Conversely, artists can fund their music projects through their fans’ support.
How Can You Buy and Sell Music NFTs?
There are different websites where you can buy and sell music NFTs. It’s essential to do your research and figure out which ones are the most reliable to have the best experience with NFTs. Some sites are marketplaces dedicated to a unique type of music NFT, namely an LDA, which stands for a limited digital asset. Through an LDA, artists can share royalty rights with fans and encourage them to remix and share their music.
You’ve undoubtedly heard of the top cryptocurrency, Bitcoin, but the vast majority of NFT marketplaces use Ethereum. ETH follows Bitcoin in terms of popularity, with its value fluctuating constantly. You can look at the Ethereum price chart to check its value and conversion rate any time you want. If you want to invest in music NFTs, the first step is to add Ethereum to your digital wallet. Once you’ve done this, look for an NFT marketplace, connect your digital wallet to it, and you’re ready to buy your first music NFTs.
To sell music NFTs, you must first pay ‘gas fees’, allowing you to create an NFT collection. Next, you must pick the songs you want to add to the collection and decide what cover art you want to include. The decision-making is crucial here because you want to choose something valuable to buyers.
Web3 Creates a New Chapter in The Music Industry
When thinking about investing, people generally associate it with the exchange of money. However, music NFTs go beyond that – they offer musicians the opportunity to build an exclusive community of fans. Fan relations are crucial, and artists are now making the most of Web3 to interact with those who love their music. Web3 music platforms represent a significant opportunity for artists to market themselves by facilitating connections between them and their fans and eliminating hindrances to creating a community. Through these technological innovations, artists can pave their way toward becoming the next established artists of the future generation. This can make record labels less critical for an artist’s success. In fact, several record companies have embraced blockchain technology and are now releasing NFT collections. While record labels will always be necessary, those who don’t adapt to the industry’s evolving landscape will likely be left behind.
This new artist-to-fan dynamic is positive for both parties. When investing in NTFs, you gain cultural, symbolic and monetary value from them. It’s great that the music industry picked up on this, considering all those dreadful stories about artists being exploited. By investing in music NFTs, fans become shareholders, owning a stake in their beloved artists and gaining value from them. This whole new perspective turns upside-down the narrative of consumerism. Before music NFT, fans could support their artists’ projects via crowdfunding or direct contributions on sites like Bandcamp. These donations helped some artists fund their projects, but this is rather an exception than a rule. Buying an artist’s NFT and participating in a crowdfunding campaign are two different things because, in the latter case, no one expects a return. When it comes to music NFTs, fans purchase them to fund their favorite artist’s piece of art, but they hope to make financial gains from it.
Success Stories That Show The Potential of NFTs to Redefine The Music Industry
Famous artists like Nas and Eminem have experienced massive success after stepping into the world of NFTs. Even those who didn’t have a significant pre-existing following have benefited from these digital assets. One example is Spottie WiFi, a rap project by the artist Mig Mora, who made $192,000 in only 60 seconds after selling music NFTs. At that time, only 200 people were following his Spotify account. Now, his project is third-ranking as one of the most significant NFT projects ever.
Steve Aoki also adopted NFTs early this year when he launched AoK1VERSE. Users can join the community by purchasing an NFT passport, which gives them access to free merchandise, live shows, members-only performances and events, etc. According to Aoki, the conversation between artists and fans was always one way. Typically, an artist creates a piece, and the fan decides whether to buy it or not, but there is no conversation there. NFTs change that by enabling a two-way conversation between musicians and their fans.
So, is The Future of Music NFTs Promising?
Risk is always involved when investing in fine art, music NFTs or company stocks. Since music NFTs are new, they don’t have long-term data regarding their returns. So, if you want to get into the world of NFTs, remember the golden rule of investing – never put into it more money than you can afford to lose. No one can tell for sure the outcome of music NFTs, but cryptocurrency isn’t going anywhere, and there is indeed potential for success.