Disclaimer: this article may present personal points of view on the matter at the time of writing. Those opinions may change in the future.

Music NFTs: what are we talking about?

You may have been wondering what an NFT is, and more specifically, what a music NFT is. If you asked us one year ago, it’s likely none of us would’ve had any clue. Now looking back at 2021, we’ve seen music NFTs change the lives of artists in a myriad of ways.

Artists have begun to see financial independence from selling even just one music NFT, and in the current state of the music industry this is definitely something; yet there’s more. Web3 enthusiasts have watched as a new wave of musicians and artists are finally able to connect directly with their world, and subsequently receive support on the most direct level possible.

So, if this is the case, why isn’t everyone involved? Why are so many musicians still not convinced about web3?

The basics: what’s the blockchain? And what’s an NFT?

The blockchain is exactly what it sounds like: a chain of blocks. Each block holds several transactions and has security protocol making it nearly impossible, if not totally impossible, to cheat, break or hack the system. Transactions are validated constantly through computers that operate to reach a consensus in order to go from one block to another, and this is how the blockchain does its own work.

A cryptocurrency is a digital currency in which transactions are verified and records are maintained by a decentralized system using cryptography. Most simply put, cryptocurrency transactions pass through the blockchain, being validated in blocks.

NFTs are units of data stored on the blockchain. NFT stands for “non-fungible token”: a non-fungible token is not interchangeable like other cryptocurrencies (Ethereum, Bitcoin, Solana, etc). Where a cryptocurrency derives its value based on other coins and the US dollar, an NFT derives its value directly from, and only from, buyers.

The minting of an NFT, which is the process of permanently printing the data onto the blockchain, provides a certificate of authenticity and proof of ownership: all of this works thanks to the same blockchain technology. We can interact with the blockchain by transacting through a crypto wallet, and different types of wallets interact with different blockchains. (i.e. MetaMask interacts with the Ethereum Network, Phantom interacts with the Solana Network, etc.)

The last term we need to define is web3. While web2 refers to traditional internet usage, web3 refers to the intersection of the internet and the blockchain.

But what is a music NFT?

A music NFT is an NFT where the data is simply just a song file; there are a lot of marketplaces right now that allow you to buy and sell music NFTs.

Got it? Perfect. We’ve got a long road ahead, so fasten your seatbelts.

Music NFTs: an artist’s approach

The problem

Existing in the music industry has never been more challenging than it is right now: as artists have been turned into content creators, we’re forced to keep up with the ever-changing landscape of art and media at the expense of our mental wellbeing. But do musicians really need to constantly be “creating content” in order to keep up? With the seemingly uncontrollable rise of TikTok, it can often feel like we do.

The reality though is that not everyone is made to be a content creator. Some of us enjoy making music for the sake of it and don’t really feel comfortable opening TikTok every day trying to find a new marketing idea.

https://twitter.com/iamdnmo/status/1479491257487421442?s=20

So many artists love making music and couldn’t care less about keeping up with the fast-paced world of TikTok and social media. Streaming services made music accessible to nearly everyone: for just a monthly subscription you can get access to virtually every song ever released. This revolution marked the past decade but, to us, it might lead to a devaluation of music as art. And this current music market is now weighing heavily on musicians: the constant need to release music in order to stay relevant, spending money for marketing, and so on.

Sure, some of us can take this as a challenge and commit to making new content every day, while others might say “whatever!” and continue their music journey at their own pace - but not every musician is a “Jai Paul”, able to sustain a career with only a few releases. Now, during the pandemic we’ve seen a lot of red flags being raised and calls for help from musicians ranging from newcomers to household names.

https://twitter.com/chelseacutler/status/1478194079599149059

So, the question is: are we really ready to put our mental health on the line for what is our greatest passion?

That’s when music NFTs come into play.

A possible solution

Music NFTs, specifically those on the Ethereum blockchain, saw their rise during 2021 with musicians finding a new path toward financial independence, allowing their careers to flourish without relying solely on traditional web2 frameworks. For musicians, this often meant relinquishing copyright to a label.

Both traditional fans and crypto enthusiasts bought their favorite artists’ NFTs. This marks the beginning of something new in music, where:

• music can be treated and valued as an art piece, with 1/1 editions;

• music can be part of a collectible series, which can include perks and incentives for collectors;

• music can be the centerpiece of any type of NFT project, since the technology already allows for sharing percentages of a song’s royalties, minting audiovisual NFTs, building community around the collectors, etc.

But what does this mean for an artist?

This has made room for a new way to interact with artists and invest in their evolution. Here, ownership has a new meaning, because all of this can happen without giving away copyright. And music itself can have a new, intrinsic value.

https://twitter.com/camouflybeats/status/1465885937590841345?s=20

In this new landscape, NFTs can be the ultimate certificate for a song’s existence, like the original copy of a painting or a very limited edition vinyl, rather than a digital good that’s meant to be forever consumed or replicated for almost no revenue, or no revenue at all. Although songs minted onto the blockchain can still be streamed and downloaded, the only authentic copy — or copies — exists on the blockchain. Owning a music NFT, in this sense, will mean owning a digital, original edition of a record.

Now what if some of your fans can’t afford a music NFT, or just aren’t interested?

While we think that it’s important to still make music available on traditional services — and not gatekeep it to fans in any way, here’s how fans can interact with your music on web3:

• listen to the song on any of the marketplaces it’s listed on;
• download the song file (the .wav or .mp3 will usually be available to download);
• cherish their favorite artists having the opportunity to have their art valued in a completely new way!

The artist’s role

We know there’s a lot of confusion surrounding this new “wild west” of the art industry, so it’s important that artists be leading this discussion in order to educate other artists and help them create a more sustainable life with their art.

https://twitter.com/sober_rob/status/1480257021882609669?s=20

Until now, too many of us let those in the music industry abuse their powers and convince us to sign inadequate and exploitative contracts. This is our opportunity to finally fund ourselves, work the way we want to with the new possibilities that web3 offers, and have our art valued for what it is: art.

Answering the questions

“I want to mint an NFT but I think I’m hurting the planet”

How many times have we seen Twitter threads in which an artist, psyched about their new venture in the crypto world, is bashed by their own fans about their decision to engage with web3? The main reason seems to be that “NFTs destroy the planet”. Is this really true?

https://twitter.com/RAC/status/1369756727587999744?s=20

This thread by RAC counters the argument in the simplest way possible: as every computer does, the ones that keep the blockchain alive consume energy by doing complex operations. The first point to note is that NFTs don’t require more energy than regular crypto transactions. The blocks in the blockchain will be mined regardless of the number, or type, of the transactions.

For some more insight on this we recommend this in-depth article by Sterling Crispin regarding environmental issues with crypto and crypto art, and how it compares to other real-world scenarios to get a better view of the actual ecological impact of NFTs.

It’s quite often that artists trying to pave the way for a new and more sustainable music industry are the ones that receive the most backlash. We’re writing this in hopes that people will do their research about crypto and what its future holds (Ethereum already plans to move towards an eco-friendly future with ETH2).

It feels better to be angry at an immaterial currency that seems irrational, than to deprive yourself of something pleasurable you're used to doing.

― Sterling Crispin, NFTs and Crypto Art: The Sky is not Falling

Companies like Offsetra have built tools to offset CO2 emissions directly for those who want to. You can also calculate the emissions directly related to your ETH wallet transactions. Plus, they provide an extensive explanation about CO2 emissions related to crypto.

All in all, we still obviously hope that the blockhain will lean towards an eco-friendly future. But while many are still worried that crypto is the main reason behind the destruction of the environment, they’re unlikely to see what goes on behind the scenes to amend these issues.

“But copyright… and publishing…”

When minting any data into an NFT, it’s important that you own the copyright to the master recording. As mentioned before, you’re not giving away copyright when selling an NFT, so you don’t have to worry about that at all in this landscape.

PROs haven’t chimed in yet, and their definition of how they claim their revenue still seems a bit disconnected from the NFT world: they collect royalties when a song is publicly broadcasted or performed. For independent artists registered with PROs like ASCAP or BMI, you won’t have any issues. You own your music and that doesn’t change when considering independent publishing.

It’s still important though that whoever mints a music NFT rewards every collaborator with a fair share, even if it has to be done manually. Either way, we encourage artists to keep an eye out for more official updates on this matter.

“Alright, I want to mint a music NFT. Where do I start?”

There are lots of ways to mint your music NFTs. Here are some of our favorite marketplaces.

• Zora is a universal media registry protocol, by its own definition, and is open to the public to mint photo, video, or audio NFTs.
• Catalog is the main marketplace for 1/1 music NFTs, but they’re currently not open to the public. In the meantime, you can apply to become an artist on the platform through their artist form.
• Sound is an innovative marketplace that allows musicians to mint a limited amount of NFTs and adds tools to empower the artist-fan relationship. It’s currently invite-only.
• Mint Songs is an open marketplace for limited edition music NFTs which lets you mint for a $0 fee, based on the Polygon Network.
• OpenSea is the biggest NFT marketplace, and the basis of many generative NFT projects. It also allows you to mint music NFTs.
• Rarible also allows you to mint audio files as NFTs.

There’s a lot of other marketplaces you can access, but we’ll leave the research up to you. While the main music marketplaces (Catalog, Sound) are not open to the public yet, we invite you to join their Discord servers to get in touch with their community.

Additionally, there are a ton of projects related to music and blockchain/crypto that don’t directly involve minting a music NFT, like Audius for example. These can be starting points for musicians that want to experiment with this new landscape. Not to mention all the music-related DAOs (Decentralized Autonomous Organizations) making a lot of new projects possible.

“I sold my first NFT: what do I do now?”

Let’s consider this: you sold your first NFT. Great! What now?

The first idea could be to sell the cryptocurrency you earned for FIAT currency (USD, EUR…) through an exchange (like Coinbase or Binance) and “see y’all next time”. Maybe you needed some financial support, and your NFT helped you get it.

Or maybe you have plans to reinvest some funds in your music project, since web2 platforms and streaming services currently remain the main tools for music listening and discovery, and the majority of music fans is still there.

https://twitter.com/hernameisalara/status/1475513845821157383?s=20

Solid choice, but there’s a lot more that you can do.

In fact, it’s important to consider getting more involved in the space. Selling your first NFT is already a great first step into the web3 world: now you can start to learn and understand new ways in which your art can intersect with NFTs. Eventually, building a community of web3 enthusiasts might become one of your most important tools in the future. It’s always important to have a group of fans that ride for you every day and show up their time, and this idea merged with the possibilities offered by music NFTs can really go a long way.

Remember, it’s not all black and white: you can easily mix the options above, and find your own unique way of building your project within the NFT reality.

However, selling just one music NFT probably won’t be the factor that turns your career around. Keeping your project moving requires you to spend time nurturing all aspects of it, and it’s still important to create a proper ecosystem and community around your art — outside of web3, too: nothing is better than having fans and followers that really connect with your music. That being said, selling music NFTs can give you more of a chance to make your project what you want it to be.

All that glitters…

“How did you make all that money? Lol, seems easy!”

No. It’s not easy.

Finding a way to sell your music NFT is not that simple, and in most cases just a small cut of an artist’s fanbase is actually interested in music NFTs or can afford even just one. You can always mint a piece on a marketplace of your choice and cross your fingers that an angel will buy it, but it’s unlikely to work out that easily. Many prospective collectors are likely to have their attention caught by offering something special alongside the NFT (e.g., a giveaway that comes with the sale, ownership utility such as free tickets to your shows, etc.) but there’s no simple formula to make sure you’ll find a home for your work.

Operations done on the blockchain also have a cost, and the costs of minting an NFT on Ethereum (currently the most important blockchain for music NFTs) are extremely high. Additionally, it’s entirely possible that your NFT won’t sell right away, or ever. It’s natural for many to find excitement in joining a movement based on the hype and the fear of missing out, but it’s important to consider that minting an NFT is an investment with no clear path to profit.

Last thing, but not for importance: the value of cryptocurrency (except stablecoins) is still far from stable. It’s important to keep this in mind when considering entering the this new world.

So, if you want to mint an NFT, be mindful of all these considerations.

Conclusions

We seem to be at the very beginning of a shift in how we utilize the internet. This article was written by artists for artists and is based on observation and participation over several months in both the crypto space and web3 art community. We still have no idea how this will change the music industry as a whole, but we’re confident that web3 has the potential to impact artists’ lives in ways we haven’t seen before.

This article was written by camoufly with the help of sober rob. Editing and major contributions by Harris Cole. Additional contributions from DNMO. Additional supervision from Alessio.

We have done our best to provide you with valuable information together with personal opinions. This article is not intended as, and shall not be understood or construed as, financial advice. We are not attorneys, accountant or financial advisor, and the information contained in this article is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation. Regardless of anything to the contrary, nothing available in this article should be understood as a recommendation that you should not consult with a financial professional to address your particular situation.