A week ago, a single, five worded tweet was sold for a whopping $2.9 million in the form of an NFT, or non-fungible token. Okay, that tweet was also the first tweet ever tweeted back in 2006, by the billionaire co-founder and CEO of Twitter Jack Dorsey, but still. A tweet sold for nearly three million dollars. In February 2021, artist Beeple sold a piece at Christie’s auction house for $69 million, yet instead of receiving an elaborate painting to hang on their wall, the buyer received a unique digital token representing ownership of a piece of digital artwork, also known as an NFT. You might have seen this abbreviation, NFT, peppered all over your newsfeed and continued to scroll, but we are here to tell you what they are, and why they could have a huge impact on the music industry.
Since music’s arrival into the digital age, it has become increasingly difficult for artists to make money. When once a musician’s record was sold only as a physical, tangible thing, a streaming generation has meant that listeners can consume unlimited music for about the price of one album per month, whilst the artist receives only a fraction of a penny per play.
NFTs could be the answer to commodifying digital art, allowing artists to sell what we currently consume for free, or at a very little cost.
Think album artwork, video content, exclusive takes; your favourite musicians are probably already looking into how they could offer you a slice, or non-fungible token, of their work.
Why, you might ask, would someone want to own something that can currently be found in a quick google search? Well, in the same way you might want to own a limited print vinyl by your favourite musician, not only is there something so desirable and sentimental about owning a piece of music, but these exclusive, digital assets can be sold on in the future, potentially for profit.
“BUT I STILL DON’T KNOW WHAT AN NFT IS!” I hear you cry, well, now you understand the concept and the draw, let’s look at how they work. Before I can tell you all the secrets of how to make millions from selling your own NFTs, firstly I must walk you through the basics of cryptocurrency, as the two are very much intertwined.
Cryptocurrency, such as Bitcoin, is essentially digital cash, made as an alternative to normal money, with one main difference — most crypto is decentralised. In other words, where the UK has a central system, the Bank of England, or the United States has the Federal Reserve System, cryptocurrencies like Bitcoin or Ethereum use something called blockchain technology as an alternative to central authority like the Bank of England, to keep it secure. Simply, the blockchain is a ledger, or record-keeping system, that documents every transaction ever made — every record added is called a block, and it is added to the chain of transactions. Storing every transaction makes it a lot harder to hack, make counterfeit money or generally get up to any funny business. A non-fungible token is created in the exchange of a crypto-currency transaction, and the main currency that supports NFTs at the moment is Ethereum, the second most popular cryptocurrency to Bitcoin.
Why do you need to know all this? Well, the main criticism for NFTs is their carbon footprint, as cryptocurrencies use an enormous amount of power to run. We are led to assume that a digital world is a cleaner world: the Cloud seems like a nice, fluffy place, right? Well, the reality is that there are thousands of energy-guzzling servers running to keep adding blocks to a cryptocurrency’s blockchain. To put this into perspective, Ethereum, the crypto that most NFTs are tied to, uses about as much energy as the entire country as Libya for the year, according to Justine Calma.
Artists who launched their own NFTs, like Gorillaz, have received much criticism from climate-conscious fans. Other artists took things into their own hands: loveable gem and musical prodigy Jacob Collier halted the auction of his own NFT, to a time where ‘methods are more sustainable and ecologically sound’, whilst pledging to carbon-offset his entire tour travel history ‘in full commitment to a more sustainable future in the music industry’.
So, whilst artists are not to blame for the carbon footprint of crypto, NFTs have got some serious ironing out to do before they can become a mainstream way of interacting with our favourite artists. When they are more sustainable, however, they will have the ability to dramatically change the industry as we know it — and it is only a matter of time.