NFTs use blockchain technology, they are uniquely suited to protect intellectual property. They allow tracking of properties and assigning maintenance. Each transaction is recorded and, like a brushstroke on a drawing, his work becomes increasingly unique and uncopyable. Owning an NFT or part of an NFT establishes real ownership of crypto music or NFT audio item, which can be acquired either through auction (Christie’s’ or Sotheby’s) or through direct purchase using cryptocurrency. This decision is usually made by the artist.
1. Stop music piracy or abuse
As noted above, NFT technology helps provide both maintainability and authenticity, making it difficult for artists to match each other’s work, for example in the spirit of the Thong Song / Vanilla Ice saga, and avoiding costly litigation. It also makes it harder for people to “steal” music through traditional methods such as piracy.
2. Return of control to contractor
NFT technology can change the head of the music industry, which is controlled from top to bottom. The $11 billion industry is dominated by the three largest labels in the world – Sony, Universal Music Group, and Warner Music Group – which in turn control artist revenue. This revenue is shared among many organizations (such as promoters, distributors, manufacturers, etc.) and it often takes a long time for recorders to receive the minimal amount of compensation. The financial problems caused by currently slow and low-paying artists are exacerbated by the disruption to tours due to the ongoing global pandemic.
With tours accounting for 75% of some artists’ revenue, many are looking to alternative sources of income in the form of crypto music. Many musicians, including Kings of Leon, Steve Aoki, and Shawn Mendes, are already trading digital art and NFT audio for cryptocurrency to increase their income. Similarly, Grimes made $5.8 million in 20 minutes selling digital art.
3. Added royalties through resale
Recording artists can earn additional income or remuneration after the initial sale. For example, each time NFT changes ownership of the NFT market, the transaction can generate 10% more revenue for the contractor.
4. Direct connection between performer and music lover
At the same time, NFT allows fans to own the music they love and gives artists the opportunity to retain their intellectual property.
5. Solve concert ticket scalping
The use of NFTs and smart contracts could render the services offered by touts obsolete in the concert world after the pandemic. Yellowheart was founded in 2018 and is a blockchain ticketing platform that guarantees the authenticity of digital tickets. Yellowheart records the identity of the concertgoers. The contractor also has complete control over how each ticket is bought and resold, so it is very difficult to measure.
Problems with crypto music
Blockchain technology, cryptocurrencies, and NFT are touted as ways to democratize music. In theory, every artist should be able to produce and sell NFT. However, most of the artists who use this technology already have big names. Similarly, NFT audio and its raw materials are usually bought by the rich. In short, the current use of NFT makes the industry less democratic and more elitist.
NFT cutting is also often referred to as being very energy-intensive and therefore an environmentally damaging process. In 2018, Ethereum production is estimated to have consumed more energy than the entire country of Iceland. While this has improved since then, as betting-safe blockchains have slowly replaced work-safe ones, this is an issue that needs to be addressed – although no one can be sure to what extent.