When you think of NFTs you probably think of monkey pictures and goofy avatars. But this novel technology is expanding to all aspects of the entertainment industry. Now music NFTs are coming to the forefront. In an industry notorious for screwing over artists, music NFTs are a welcome surprise.
They provide a truly open and permissionless system that allows more diversification of income streams. The technology is simply amazing. That is why in this article, I will be explaining what music NFTs are and the key benefits they bring. So without further ado, let’s jump right in.
What are Music NFTs?
Music NFTs work like any other NFTs. Essentially, it is a record on the blockchain which cannot be falsified or duplicated. Think of them as digital contracts which are recorded on a public ledger. Every transaction on this ledger is open to the public making it completely transparent. Each NFT is a unique asset with specific metadata. In the case of music NFTs, they contain songs or music videos created by the artist.
What are the benefits of Music NFTs
Ownership – in the traditional world of music when you buy a song you only get the license to listen to the music. On the other hand, music NFTs allow you to own the asset itself giving you complete control. This has turned music into a commodity that you can trade. Now fans get to speculate on the price. Ultimately, if the artist is successful the price of the music NFT will likely rise. Not to mention, this creates a more active community. Unique music will be shared with the community and shown with pride. They ultimately become status symbols with rare pieces being more valuable.
Royalties – NFT music royalties present a unique opportunity for artists. Royalties can be coded into the smart contract. This allows them to receive consistent residuals for each sale. As their popularity grows so will their returns. Want to learn more about royalties? read my previous article.
Transparency – thanks to the underlying technology of NFTs, they are completely transparent and open to the public. Anyone can view the contract details on the blockchain. This highlights any malicious activity. If the record label or artist creates a shady NFT contract it will be open to the world to see.
Efficiency – the improved efficiency is second to none. As authenticity is simply verified on the blockchain there is no longer a need for a ton of paperwork. The process is more streamlined and faster. Not to mention, the middlemen are cut out. Traditionally, around 50% of earnings were taken by record labels. Now artists can trade directly with fans.
They reward fans– Music NFTs have changed the dynamic between fans and artists. Now fans can be rewarded with NFTs. Artists can show their appreciation by providing exclusive perks to fans. The NFTs act as proof of ownership. For instance, if you own a particular NFT it may give you access to an exclusive concert or event. Being digital the risk of losing the ticket is minimized.
Where to buy music NFTs?
Now that you know the basics of NFTs, let’s talk about where you can buy and sell them. Essentially, fans can buy music NFTs on any of the major marketplaces. This includes:
OpenSea – this is the most popular NFT marketplace and for good reason. Founded in 2017 by Devin Finzer and Alex Atallah, OpenSea has a proven track record. The design is intuitive and supports more than 150 different payments. Setting up an account is free and it supports several wallets including Metamask and Coinbase. It also has a dedicated music section so finding your favorite artist is quick and easy.
Magic Eden – this is the second largest NFT platform with over 20 million unique user sessions per month. One of the main benefits of Magic Eden is the transaction fees. It is only 2% compared to Open Sea’s 2.5%. The platform also has a launchpad that facilitates the selling of music NFTs by artists. Users can trade with both Solana and Ethereum.
Music NFTs are providing an entirely new way for artists to capitalize on their work. Now they can trade directly with fans without an intermediary. It has created a whole new dynamic that is more equitable, not just for the artist but also for the community. Loyal fans are rewarded and more engaged. This is all done in a completely transparent way. I believe it has created a better way of determining the value of an artist’s work and hopefully, with time this technology gets adopted more and more.
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