Cryptocurrency is expanding with many new investment opportunities, and this can only be attributed to developments in blockchain technology. From various digital currencies and assets for sale on the market, this new era of cryptographic development has brought about the emergence of non-fungible tokens, popularly called NFTs.
Non-Fungible Tokens (NFTs) are unique tokens hosted on the blockchain network that represent distinct data such as images or videos. NFTs are cryptographic objects on the blockchain with special identification codes and metadata that distinguish them from others. They are best described as real-world digital artifacts, such as works of art or real estate. As such, they have become a stable medium of commerce in recent times, so much so that various artists and athletes have made millions selling NFTs.
Unfortunately, many digital artists still don’t understand the basics of non-fungible tokens and see no tangible reasons to join the bandwagon. This article will serve as a guide to NFTs, helping artists understand how these digital assets work and how to benefit from NFTs.
How do NFTs work?
Usually, NFTs are mainly part of the Ethereum blockchains. The blockchain supports NFTs in a way that allows them to function differently than Ethereum coins themselves.
Therefore, it is safe to say that the similarity between NFTs and cryptocurrencies ends at their source. NFTs are created from digital objects that represent both tangible and non-tangible items such as videos, GIFs, music, video game skins, etc. This means that NFTs are like physical collectibles but in digital form. The buyer will obtain a digital version of the article and its exclusive rights of ownership.
Non-fungible tokens use automated smart contracts that approve work and track value as it changes hands. Before the advent of blockchain, this process was very rigorous and time-consuming. Since non-fungible token processes are cryptographically secured and guaranteed by smart contracts, they eliminate the need for expensive middlemen.
What are NFTs used for?
NFTs and blockchain technologies allow artists, athletes, and other creatives to monetize their crafts. For example, digital and music artists now have other options for making money outside of streaming music and concerts. As an artist, you can now sell your album cover artwork as NFTs. Artists can now sell directly to their fans and keep their profits without necessarily relying on auction items.
Why should digital music and artists choose NFT?
Many artists have already benefited greatly from NFTs. For example, Grimes auctioned off around $5.7 million worth of digital art pieces in the space of 20 minutes.
In the same period, 3LAU, an electronic musician, sold $11.5 million worth of NFTs. This just goes to show that NFT sales have become the new gold rush of the music industry, and it is said that this new initiative will be around for a long time.
Coming from a period when the global pandemic affected every industry in the world, the entertainment industry was also affected as concerts, shows, and tours were canceled: NFTs became a frenzy for digital and music artists. Additionally, for music lovers, there is an optimistic sentiment that NFTs may give musicians the financial clout they have been missing out on. NFTs are creating access to wealth for digital musicians and artists.
NFT and Blockchain for artists
Non-fungible tokens allow artists to capture value for their works in unimaginable ways. The industry is loaded with middlemen and middlemen who defraud these artists. NFTs provide unique opportunities for a simple system completely reconfigured equitably for creators and consumers, in this case, artists and their fans. Original artists can now keep most of their earnings from selling their works, and this also comes with royalties for each sale. NFTs can ensure that artists can now earn more money before albums and songs are released.
Non-fungible tokens are a strong point in securing blockchain music royalty payments, which has helped reinvent the music industry’s dominant payment model.
Could NFTs be the economic future of digital music and artists?
Currently, NFTs are viewed favorably and are considered a new source of wealth for digital creators and artists. It has helped democratize access to self-controlled earnings for artists around the world. With artists like Steve Aoki selling an NFT collection for roughly $4.2 million and Kings of Leon doing $2 million in NFT sales, it’s safe to say that NFTs are currently the best digital investments for digital music and artists.
However, some people still argue that non-fungible tokens are investment bubbles that will fizzle out. This notion may be discredited by the current state of the music industry. The music industry has become more global and digital than ever, with the demise of CDs and digital downloads paving the way for online streaming.
Unfortunately, these streams tend to strangle profit-making, especially for artists. As mentioned above, most countries are recovering from the pandemic crisis and are lifting lockdown restrictions that will allow tours and concerts. Artists are still suffering from the adverse effects of canceled shows. For example, Gunna, a rap artist, lost close to $6 million due to canceled shows and tours.
Music and digital artists should ride the wave of non-fungible tokens because it opens up more opportunities to earn and fosters a new kind of relationship between artists and fans.
However, artists must understand that NFTs can be easily mastered if studied properly; it is not something to run away from; is something to hug. NFTs are not just hyped about soon-to-burst bubbles; they are a new stream of digital investments for artists.