What’s a NFT + Is It Really the Future of Music?
What the f*ck is a NFT? Imagine the Mona Lisa for a second. Though countless print and digital images of the painting exist, there’s still only one, priceless original. Now, imagine owning the sole master tape of your favorite album. Buying an NFT can make that a reality.
NFT stands for “non-fungible token.” It operates on blockchain technology, just like Bitcoin, but unlike the 21 million Bitcoins that will eventually be mined, an NFT is one-of-a-kind, can't be bought or sold in fractional amounts, and can’t be traded for an identical NFT.
Buying an NFT sort of turns you into the record company or that pharma bro guy who bought Wu-Tang Clan’s Once Upon a Time in Shaolin. If you win the March 5 auction for When You See Yourself, the new album by Kings of Leon (one of the first bands to sell a record as an NFT) you own the album token and can sell it at any point. Like many cryptocurrency tokens, the NFT operates on the Etherium blockchain and is stored in a digital wallet.
But Kings of Leon put more than just an album into the NFT. The token also promises its owner four front-row tickets to any Kings of Leon concert, during each tour, for life. So NFTs can consist of a real-world, physical experience as well as digital art or property.
Linkin Park’s Mike Shinoda recently sold a piece of digital artwork called “One Hundredth Stream” as an NFT for $30,000, which Shinoda plans to donate to charity. Musician Grimes has made a killing selling NFTs, raking in almost $6 million in digital art sales so far.
But what’s the point of buying a NFT if everyone can just stream the album for free? Same reason record companies want to own the master — because a classic album appreciates in value over time. If you're the owner of an album, you could potentially profit through a song being licensed for a commercial, make small amounts of cash in perpetuity through streaming or album sales, or just sit back, wait for your NFT to appreciate in value and sell it for a profit. Value for a NFT could even be created through the sheer excitement for blockchain technology.
"By investing in an NFT or, for example, a social token, the fan engages in the potential for revenue growth. Whether this is through a resale factor, which usually holds a percentage for the artist in the smart contract, or through a secondary right attached to the token," explains MusicxTechxFuture.
Kings of Leon’s new album, When You See Yourself, was released today via traditional streaming and album sales services, while its official NFT will be auctioned off at noon ET today via the YellowHeart platform. To learn more about NFTs, read this article from The Verge.