NFTs - demystifying the new craze
NFTs
NFTs - Non Fungible Tokens - have become a somewhat buzzword over the last few months, carrying the same hype as Bitcoin did years ago. For those who are still a little confused, we hope this article demystifies this new craze.
To help get your head around them, think of NFT as a first-edition book signed by the author. NFT uses blockchain much like Bitcoin, however instead of being used as virtual money (like Bitcoin), NFT allows for original pieces of art to be transferred. So, for example, an artist can create a bunch of NFTs of a work, or just one, but whoever owns it (or buys it) can only transfer it, never copy it. This way, fans can buy music videos or digital ‘collectible’ versions of a record, all of which can then be sold or displayed.
Let’s look at an example of this; most recently The Weeknd sold NFTs of 3 different visual artworks. Each came with a segment of a new Weeknd track. These were not limited (think of this like printed artwork on postcards- you can reprint them but you don’t have the original)/ There was also a separate auction to own an exclusive piece if art featuring a new song. For this, the winner became the owner of the track. This auction brought in a tidy $2.29 million.
Not only is this an incredible experience for fans, but it’s also a way for an artist to regain control of their work. You will be well aware of the low amount of money that artists make from streams, and so, NFT’s are a way of reclaiming their value.
However, whilst NFTs can be amazing ways for an artist to get what they are owed, NFTs have also raised a very interesting debate regarding rights and splits. For example, should an artist sell a song in an NFT package for millions, the music publisher or songwriters may not necessarily be given their cut. Seeing as NFTs have only just spiked, we’re sure we’ll be seeing a lot of discrepancies in the near future.
Seeing as the hype around NFTs is due to cryptocurrency investors who have rushed to be at the forefront of purchasing the first wave of NFTs, we’re eager to see if this will sink or swim !
