You, Me, and NFT
- Malik
- Mar 31, 2021
- 3 min read
As artists continue to push the importance of ownership of their work, the ways in which they distribute their work has evolved. NFT's (non-fungable tokens) have seen an increase in popularity in the past year, especially for digital artists and musicians. An NFT is a form of cryptocurrency token that proves ownership of a unique digital asset. These tokens exist not only as a form of media, but as a form of collectible currency within the crypto space. Thanks to the pandemic, the loss of revenue among artists has driven many of them to minting (publishing) their own NFT's. Why Mint an NFT? When an artist “mints” an NFT, they are uploading their media to a blockchain that keeps a record of said media and all its transactions forever. While NFT exist solely within the crypto space, they can serve as a digital representation of a physical, real-world asset. The minted NFT is now a digital asset that users can bid on for ownership using cryptocurrency, including ethereum. Many see the rise of NFT as a golden opportunity to give creators control of how their work is sold and how they profit from it. For creators, NFT's allow them to receive payment for their work independent from any third party. An independent musician unable to tour due to the pandemic can mint an NFT, set a bidding price for it, and proceed to sell the digital asset to the highest bidder. The creator and each owner of the NFT will receive payment for its sale as well as a percentage of every subsequent sale. With NFT's allowing creators to continuously receive payments on their work over time, some are looking to release their work exclusively on the blockchain.
Why Buy an NFT? Though it is clear why creators would want to sell NFTs, the reasoning behind buying an NFT isn’t as straightforward. When considering investing in cryptocurrency, it is important to know that a single unit of ethereum or other cryptocurrencies costs a pretty penny. In fact, at the time of me writing this, one ethereum is equal to $1877.32. Realistically, much of the general public can’t afford to buy a single unit of cryptocurrency let alone enough to purchase an NFT from their favorite artist. For example, one of my favorite rappers decided to sell NFT's of his unreleased music. At first, I was wary of this move, believing that said music would be available exclusively to people who purchase the NFT. However, after learning that the digital asset was available for public consumption regardless of it you purchase the NFT, I became more open to the idea. After deciding to support one of my favorite artists, I created an account on the site zora.co and opened a digital wallet to store my cryptocurrency. However, I was soon struck with the reality that if I wanted ownership of this 48-second song, I would have to shell out nearly $1200. The current owner of the song is an NFT collector who will now allow its value to increase over time and sell it for more money if they choose.
Is NFT the Future? The problem with NFT's is that they’re simply not accessible to everyone. Much of the purchasing going on has been between artists who simply want to support each other. Without cryptocurrency being affordable to the general public, these digital assets are largely being traded by artists and the wealthy. What's interesting is that the people who bid on and purchase NFTs are ultimately the ones deciding its value.
As it stands, NFT's are still a niche way to support creators and amass a collection of digital goods. Some people believe that NFT's and blockchain technology will revolutionize areas like the music industry by giving creators full control of their creations and leaving out labels or other middlemen. Frankly, I believe that major labels and corporations will sooner or later find a way to capitalize off of the NFT space just like any other. As of now, there isn’t much of a difference between an NFT art collection and the art collection stored in the folder on my hard drive. The collection on my hard drive doesn't have the potential to increase in value over time, but at least it won’t cost me a few stimmys to acquire.
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