Could NFTs be the future of the music industry? Here’s everything you need to know about the crypto-vibe virtual collectibles.
On February 28, Grimes banked $5.8 million after selling a suite of her artworks in the form of NFTs. The digital artworks were published as “WarNymph Collection Vol. 1,” and launched via a tweet to her 1.1 million Twitter followers. They sold out within 20 minutes. That same weekend, electronic producer 3LAU sold the world’s first digital tokenized album, generating over $11.6 million in under 24 hours. A few days later, Kings of Leon made headlines when they announced that their new album would be available as an NFT.
Dropping NFTs tomorrow at 2pm EST. enter the void pic.twitter.com/l9fNFUCheX
— Miss Information 🪐 (@Grimezsz) February 28, 2021
Short for “non-fungible tokens”, NFTs are cryptocurrency-adjacent virtual collectives that have recently gone mainstream. While still in their infancy, if early adoption is any indication, this new technology might change the music industry forever. Here’s everything you need to know about NFTs and what they mean for artists.
So, what are NFTs anyway?
To simplify things, NFTs are a type of cryptocurrency, but instead of holding money, they can hold assets like art, tickets, and music. They are sort of like a digital certificate of authenticity, or proof of ownership, of a digital artwork. Born out of the visual art world, NFTs can be used to prove ownership of a specific piece of music, art, or merch, or secure access to live shows. It differs from a normal digital ticket or a downloaded file in that it can’t be copied.
What could NFTs do for the music industry?
NFTs could allow songs, albums, music videos, live streams, interviews, and merch to be bought and sold as collectable items on the blockchain (a type of public database that exists across multiple computers in a network). Just as signed records gain value from their rarity and symbolic importance, NFTs could make the same true for digital items. Even if the item is not rare itself, the token is rare, giving it its value.
The NFTs sold by Kings of Leon looked like a typical merch bundle, but with 2021 vibes — offering limited edition vinyl, access to future live shows, or alternative album artwork. “In the future, I think this will be how people release their tracks: When they sell 100,000 [NFTs] at a dollar each, then they just made $100,000,” said Josh Katz, the CEO of YellowHeart, the company that developed the band’s tokens.
NFTs also have the potential to change the way artists think about streaming revenue. If an artist sold one million copies of their new single for $1 each, that’s $1000,000 banked, direct in their pocket. Linkin Park’s Mike Shinoda sold a digital piece of art that included a song for $30,000 and explained on Twitter: “Even if I upload the full version of the contained song to DSPs worldwide (which I can still do), I would never get even close to $10k, after fees by DSPs, label, marketing, etc.”
#NFT update. Someone bid $10k USD on my piece (thanks!). And some folks are still confused about what this is. The short answer: an experiment. (more below)
— mikeshinoda.eth (@mikeshinoda) February 6, 2021
The future of NFTs and fan relationships
There’s recently been some talks about how artists can use NFTs to build and monetize a superfan community, with fans buying into an artist’s community by purchasing an NFT “ticket” or “entry pass”. Instead of subscribing to your community with money (like they can do on other creator platforms like Patreon and Twitch), fans would never cancel their subscription, instead just sell their NFT to another buyer interested in joining the community.
It’s clear that fans want to find new ways to be a part of their favourite artists’ projects, and the concept of owning a part of the creative process means that fans no longer need to sit on the sidelines watching artists create from afar anymore.
Ideas for your first NFT
- Limited edition cover artwork for your new release
- Backstage pass and meet-and-greet for a future tour
- Special acoustic version of a track or album
- Unreleased material
- Digital artwork
- Digital merch pack (stickers, GIFs, badges)
- Digital track or album
- Gig tickets
- Music video
How to create and sell an NFT
You don’t need a heap of knowledge about crypto to create an NFT, but there are a few tools required to get started.
Step 1: Create a digital wallet — this is where you’ll securely store the crypto currency that is used to buy, sell, and create NFTs. The wallet also allows you to safely sign in and create accounts on NFT marketplaces. Coinbase is one of the most popular cryptocurrency exchanges and their wallet is a solid option for crypto newbies.
Step 2: Purchase some Ethereum — don’t worry, only a small amount is needed. On most major NFT marketplaces there are fees associated with turning your content into an NFT, so you’ll need to buy some Ethereum (ETH) to cover the costs involved.
Step 3: Connect your wallet to an NFT Marketplace — now it’s time to choose a marketplace to create and list your work and connect it with your wallet. Rarible is a good starter marketplace for beginner creators, as is Zora and SuperRare.
How do I create and sell an NFT?
There’s no set technique for creating a piece of art that can be used as an NFT, you just need to find a marketplace that supports the type of file you want to create. Basically any digital art file can be converted into an NFT — any image, TXT, JPG, PNG, MP3, meme, recipe or GIF can be one.
Step 1: Make a Digital Art File — create your art and save it as a digital file.
Step 2: Price your Art and List it on a Marketplace — download your image and upload it to your marketplace to mint as an NFT. Yep, it’s as simple as uploading your track to Alewa House. The platform will ask whether to mint your art as a one of a kind piece or as a collection of multiple items, and then prompt you to set a price (eg. 0.016 ETH). Pay the fees associated with creating a new NFT and then it will be live, instantly.
Step 3: Wait for Bids — after your art is listed on the marketplace, anyone can find it and place a bid for your NFT. Remember that NFTs are just like any other piece of creative work you’ve released, you need to promo them so people can find them. Share your listing from your social channels, send an email blast to your newsletter subscribers, or share the links in any relevant Facebook or Twitter communities.