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What is a Music NFT? How To Buy & Sell Them

2022-09-19 Investing

There is no denying that 2021 was certainly a fortunate year for NFTs. With a number of wide areas where NFTs are operating, they are now set to strive in the music industry. More and more famous musicians like The Weekend, Kings of Leon, and Grimes earn additional millions by selling their music on the blockchain as NFTs. 

It is good to know that one can not only observe these successful stories but also join in and profit from music NFTs. In case you are interested in music, passionate about making music and now want to explore the world of NFTs, this article is for you. We are here to depict all you need to know about music NFTs and how to buy and sell them.

What is music NFT?

NFTs, or non-fungible tokens, are blockchain-based digital tokens that are used to record the ownership of items, such as music, art, videos, GIFs, and so on. NFT is a one-of-a-kind asset that cannot be duplicated or replaced, and a transparent blockchain ensures that. Ethereum is the most widespread cryptocurrency to buy and sell NFTs on the marketplaces.

To explain it simply, music NFT is like an alternative to purchasing music through a platform like iTunes. Nevertheless, generally, when you purchase music, you can only legally listen to it. In the context of NFTs, you actually have the ownership of the music that anyone can listen to (often several copies exist, each owned by a different party). 

This implies that only people that hold the tokens can truly prove their ownership of that specific track. In addition, the owner of the NFT has the right to decide how it is used – whether it will be sold, traded, or kept. With NFTs, music is becoming more of a product, something that you can resell and invest in, and add more value to than just people listening.

Types of music NFTs

In addition, it all relies on the artist or band to decide how their NFTs will be composed. Whether it is one or multiple copies of NFTs, ranging from 100 units or even 10,000. This means that a musician does not have an album with 10,000 songs, he only has made multiple copies of each song and then you can get one with purchase.

It is also available to create a mixed experience of art and music NFT together. Therefore, music NFTs can represent a wide range of possible applications:

  • A piece of music;
  • A track; 
  • A song;
  • A complete album;
  • Lyrics;
  • Soundbites;
  • Album artwork;
  • Videos, clips, or GIFs that are created to accompany music;
  • Merch, offers to merch, or merch drops;
  • Access to exclusive sections and areas in concerts and festivals, or meet-and-greet;
  • A concert/festival ticket;
  • Exclusive access to the specific content.

The real value of music NFTs

Since NFTs are irreplaceable and one-of-a-kind tokens, that makes them extremely beneficial. There are several reasons why creators, fans, and investors can find value in music NFTs:

CREATORS:

It is seriously hard for beginners to get into the music industry nowadays, due to the huge competition and amount of artists. Only rarely do musicians get noticed and skyrocket in popularity by uploading music on Youtube or Tik Tok. With streaming, there is a very clear amount that you are going to get paid, but it is specified by another party, not by the artist himself. Even if artists sign with record labels, the deal and contract can require them to give 50 or sometimes even 80 percent of the profit to the label. 

Thus, NFTs have empowered independent musicians to make a living with the principle of digital ownership that can be a great addition to a career. This principle is bound to the idea that any musician/band could be financially independent with the implementation of non-fungible tokens. In the NFTs world, an artist won’t need to sign an unfair deal with a label and can be in control and place the value on how much his piece should be worth.

It is a way for artists to get back to earning money on a per purchase basis for their songs, rather than simply on a per play basis from Spotify or Apple Music (that pays a lot less). Furthermore, NFTs can create a stronger connection with a fanbase and community. With the purchase of single music NFT, members of your fanbase can get rewards for promoting your music. This is a win-win situation and two-sided support for both fans and creators.

FANS:

No matter the genre of music, it is known worldwide that the music fanbase is the most highly engaged and supportive of their favorites. So it is obvious that they would appreciate the one-of-a-kind digital music piece of their loved artist, just as much as the merch that has their real signature. 

Of course, it is always the question of the price of the asset. But if the person has a strong bond with the artist’s music and sees its prospects in the future it can actually become an investment. In fact, a fan can hold ownership of a percentage or a whole NFT, and also start receiving royalties.

Besides, it is common for a fanbase to be proud of being there from the start for the musician. Fans even tend to bicker and rival, both online and offline on the time they found the artist. In this case, music NFTs are there to prove who actually supported and owned the artwork on the blockchain – the credit for being “THE OG” of the fanbase and purchase

This alternative for a fan to artist relationship therefore can benefit everyone, especially up-and-coming musicians that are ready to kick start a project, start promoting a brand new campaign, or just raise awareness about their music. Fans can sell NFTs for more later if the creator’s career will progress, and get the benefit of the resale and its utility.

INVESTORS:

Some people may be interested in gaining financial exposure to an artist they feel will succeed. The methodology is the same - you can buy a limited edition NFT of a song from an artist that you like, appreciate, and want to support. On the contrary, maybe you just have good taste and after the analysis, you actually believe it will strive in the future.

Nevertheless, investors have that ownership and can enjoy it how they want. Flex it, trade it, listen to it. Flip it for a profit especially if that musician blows up in the industry. Hang on to it as much as you want to. Just as the same as with fans, it is all about believing and putting trust in the artist, or in the specific NFT.

How To Buy and Sell Them?

Be aware that music NFTs might have a harder time being noticed in the bigger marketplaces. This is due to famous marketplaces being built and focused more on visual art and GIFs.

However,  these are the marketplaces that contain music NFTs: OpenSea, Nifty Gateway,  Royal, Rarible, Crypto.com, and much more. The process of buying or selling music NFTs is the same as any other NFT is displayed below:

How to buy music NFT?
1.Create a wallet with your email and password
2.Send or buy some cryptocurrency directly from the wallet
3.Register on the selected marketplace via the wallet
4.Explore the music NFTs in the marketplace
5.Research the specific NFT, its creator, the history, the community, and discussion groups.
6.Follow the marketplace’s guide and buy the NFT directly, or via the auction.
How to sell music NFT?
1.Create a wallet with your email and password
2.Send or buy some cryptocurrency directly from the wallet
3.Register on the selected marketplace via the wallet
4.Promote your NFT project to find buyers and investors.
5.Join or build a community on Twitter or Discord. Grow and educate the community about innovations in the music NFT niche, sharing your opinions about the drops on several social media channels. Bring value to people while talking about how your production is going, and how your music NFT project is developing.
6.Follow the marketplace’s guide and list your NFT for sale.

Normally NFT marketplaces do not require you to have any technical or coding knowledge to begin. The best way to do this is just to start somewhere. Test the waters, try different things, because until you do – you wouldn’t know which one you like the best.

The controversy of music NFTs

It is also important to address that music NFTs can be a tricky and strange concept to understand for some people. As an artist and as a musician, you would want to make sure that your music would be heard and appreciated by as many people as possible. That is your goal as an artist, to send the message through your track, be recognized, and reach individuals who comprehend the value, uniqueness of your lyrics, etc. 

Millions of people typically enjoy number one hits, so it might appear confusing why artists would want to limit and create 2 hundred tracks of NFTs for people to enjoy. It all goes down to the fact that times and habits are changing. Decades ago, a musician’s main goal was to get put on a radio for a wide audience, which now is more and more dominated by the amount of YouTube views, and Spotify or Apple Music streams. 

Therefore, everyday people’s habits are shifting and adapting to the digital, WEB 3, blockchain, and metaverse world. NFTs in the music industry just supplement and add additional value for the creator and the fans.

Are NFTs the future and will they take over the music industry?

- Not anytime soon. The union of NFTs and crypto, especially in the music industry, is still at an early age. To completely replace streaming giants and the record label industry takes a lot. Equally, not every artist would want to leave the label and turn to the method without guarantees. It is not for everyone. But it sure can be additional profit gaining experience.

Outro

We hope that you’ve gathered that music NFTs are not only available for stars and influencers with millions of followers. Anyone, with a passion for music can value from them. Music NFTs are without a doubt a new medium for listeners to interact with their favorite artists, bands, and composers. The potential for more direct artist-to-fan connection, independence, as well as new methods to monetize work without the need of traditional music publishers, makes this a hopeful advancement for you to try out too.

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