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What is an NFT and why do they matter to the Music Industry?

NFTs will save the music industry!
They’ll restore music’s value!
Artists can better merchandise themselves with NFTs!

These are just some of the claims been made about NFTs.

NFTs are all over the news. Vinyl albums, paintings and gifs of NBA players are all selling for big money and they are making headlines worldwide.

What is an NFT and why do they matter to the music industry?
‘NFT’ stands for non-fungible token.
Fungible means that something can be replaced with an identical, interchangeable unit, so non-fungible means it can’t be replaced.

To oversimplify, it’s a limited digital item. Think of it like virtual merch or artwork, something rare or one-of-a-kind. In essence, it’s a way to prove ownership of an original digital file.

For example, there is only one original painting of Van Gogh’s “Starry Night.” There is one original open-reel master of Bob Marley’s Catch a Fire album. The originals, for obvious reasons, will always be worth much more than any copies that are made of them.

The actual token is a unit of data that lives on a blockchain; a blockchain is a public, digital ledger proving ownership. The ‘public’ distributed nature of that ledger helps prevent tampering and fraud. Thus, the blockchain also helps ensure proper rights attributions and allows for the tracking of subsequent transactions as the NFT is bought, sold, or traded.

Whenever the NFT is re-sold, the original creator can earn a percentage of all future transactions in perpetuity. That means the revenue you earn per sale will likely increase as your career and stature grows as an artist, because the same NFT now commands a higher price. 

So, in essence, what an NFT does is allows you to prove your ownership and, as a result, it allows the digital creations to become collectible. 

So here’s what you need to know about NFTs if you’re a DIY musician:
Forget about them (for now). Seriously, you will know when it’s time for NFTs. Until then, don’t worry. If you’re a new or emerging artist, still working hard to simply reach listeners, drive awareness and build a modest fanbase, there are other things you should focus on. 

What people are really obsessed with right now is the trendy concept and delivery format of an NFT, not necessarily the contents inside. It’s an economy and news story based mostly on hype. The hype is fuelled by the media promoting famous or well-connected people who made big bucks speculating on cryptocurrencies — and they’re paying for the NFTs with the profits made in those cryptocurrencies.

Once NFTs lose their de facto lustre, we’ll have a musical landscape that is crowded with competition and fewer investors who want to buy NFTs ‘just because’, which leaves you in exactly the same place you are right now.

Depending on your outlook today, you’re either competing with Beyoncé for streaming attention (and losing), or responsibly acting like the cottage industry you are! Meaning that your success is tied to the ways in which you appeal directly to your fans and asking them to do something that has an immediate impact on your career.

If that’s where you are today, what’s the benefit to you of an NFT?

Your fans are probably MORE likely to send you money through PayPal for a signed vinyl album and their name in the liner notes. Because to purchase an NFT, that same person would have to acquire the cryptocurrency to buy it (both you and your fans will need cryptocurrency to dabble in NFTs), and then they’ll have to jump through a few more hoops to finally purchase as explained here -

How to mint and sell your own NFTs
Here are the basic steps you’ll have to take to create and sell NFTs related to your music:

Ready your wallet (You’ll need a way to buy, sell, or swap NFTs.)

A “wallet” is a digital place to store your cryptocurrency while also storing private data used to validate transactions. Some wallets are used for specific currencies, such as Bitcoin, while others allow for multiple cryptocurrencies.

With something like MetaMask you have a secure way to access Blockchain-based applications. More to the point, this is the way you’ll get paid for your NFT sales!

Just be sure to do your research on which wallet is best for you. Also be sure to download it from the correct official source — because there are some scams that trick people into going through a fraudulent signup flow.

Fill your wallet… with cryptocurrency such as ETH, BTC, USDC, DAI. You’re going to need crypto in order to cover the costs of creating your NFTs.

Choose your NFT marketplace

A marketplace is where people make, buy, sell, and trade NFTs. Check out options such as where you can “mint” and sell the NFT in the same place. When you create an account, you’ll also be able to flesh out your profile as an artist/seller. 

Create an NFT collection 
Within OpenSea, you can list collections of NFTs (items that are grouped together by theme or series). Give the collection a good name and description.

Mint your tokens!
Once your collection is created, you get to the fun part — actually making your NFTs. 
You can upload a digital file along with any other unlockable content that you want to be bundled with the NFT. Then write a description for the item, set the quantity and initial price of your NFT.

Now you choose how many of this particular NFT item you want to make available. Remember: limited is the name of the game. One-of-a-kind is always an option too. After you set the quantity, list the buying price.

If your NFTs don’t sell at the asking price on OpenSea, someone can enter a bid at a lower price. It’s up to you whether you want to say yes or no. One other thing to know, the cost to ‘mint’ these tokens is paid (by you) in crypto when the NFT actually sells.

Tell people you’re selling NFTs
(Maybe you should’ve just offered your fans some autographed vinyl. ; )

Are NFTs the future of the music industry? 
NFTs are likely to become a fixture in the creative digital landscape, but at this time, it’s too early to consider them for your music. Once the format becomes mainstream and once consumers begin accepting and buying them in large numbers, you can start figuring out how to put your next creation out as an NFT. Until then, just keep an eye on the news and see how NFTs develop as a creative format. When it’s time to put out your music as an NFT, we’ll be back to explore the topic again.

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