In addition to the topics mentioned above, we’re going to explore the benefits that NFTs offer to artists and consumers. Blockchain-based music platforms are disrupting the traditional music industry like never before. So, if you’re wondering, “what are music NFTs?” or “what is NFT music?” – let’s dive right in!
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What are Non-Fungible Tokens (NFTs)?
Before diving into the question of “what are music NFTs?”, let’s first discuss NFTs more broadly. Non-fungible tokens, or NFTs, are among the most prominent trends in crypto. NFTs represent unique assets with transparent ownership. Fungible assets such as Bitcoin (BTC), Ethereum (ETH), and fiat currencies are interchangeable. These units of account are fungible because one BTC in your pocket is worth the same as one BTC in someone else’s pocket. If you were to borrow an amount of such fungible assets, you would not be required to pay the debt using the exact same coins or tokens.
However, NFTs vary in that each of them can be completely individual. Further, an NFT can represent unique data, granting holders immutable storage on the blockchain. This enables NFT holders or anyone else to see a transparent trail of ownership history. Accordingly, anyone can view the details of each transaction where the NFT changes hands.
You can tokenize just about anything on the blockchain as an NFT. Among the most prominent use cases are digital art, collectibles, and in-game assets. In addition, NFTs can represent ownership of licenses, certificates, social media posts, and even hashtags. Plus, NFTs are experiencing adoption in real estate, gaming, music, and entertainment.
NFTs are an ideal way of providing verifiable ownership of rare or unique assets. For example, an artist can release a limited batch of unique pieces on a public blockchain such as Ethereum. Each piece is traceable on-chain, which has the potential to reduce counterfeiting and reassures buyers that the product they’re purchasing is legitimate. Also, this model is replicable in a broad range of industries. As such, any asset, physical or digital, can be “tokenized” on the blockchain as an NFT.
What are Music NFTs? – NFT Standards
Token standards are similar to recipes for creating assets that are compatible throughout the ecosystem of a particular blockchain. They offer a set of rules that developers must follow, providing consistency and making them easier to use. One of the most significant points of contention during the initial phases of NFT development was the ability to standardize these unique assets.
The introduction of the Ethereum ERC-721 standard made it possible to mint multiple unique tokens from the same contract address. This would allow several NFTs to bear many of the same attributes while still maintaining rare or unique characteristics that set them apart from the rest.
The ERC-721 standard is useful for generating unique one-off assets. However, the ERC-1155 NFT standard makes it possible to sell several unique assets in batches. An example of this would be in blockchain gaming, where a single NFT could represent an entire suite of armor comprising multiple compatible items across multiple games.
Much of the innovation and development in the NFT space has taken place on Ethereum, the number one smart contract-enabled blockchain. However, there are several variations of the above token standards on other blockchains. For example, the ERC-721 standard has been replicated on Binance Smart Chain (BSC) as the BEP-721 standard. For more info regarding Ethereum competitors, save our “Cardano vs Solana” article for later!
How Does NFT Music Distribution Influence the Music Industry?
The commodification of music that occurred in line with the introduction of music streaming services and file-sharing platforms has resulted in a continuing decline in sales. Artist revenue has traditionally been eaten away by costs associated with production and distribution. This, coupled with a rise in technology to expedite counterfeiting and illegal file sharing, is hitting artists harder than ever before.
Also, limitations on live music performance and public gatherings in recent months are preventing live performers from recouping some of these losses on the road. Plus, fan engagement is almost exclusively online these days.
However, the introduction of blockchain technology and NFTs provides artists and fans with a broad range of benefits. Moreover, tokenizing music on the blockchain boasts several advantages over traditional formats. Accordingly, NFT music distribution platforms are becoming increasingly popular as many big-name artists rush to get involved.
NFT music distribution enables artists to receive an equitable share of the profits for their work. Traditional music distribution platforms require multiple parties to take a cut of any profits before an artist sees their share. However, by releasing music as NFTs, artists can often eliminate several unnecessary intermediaries. In turn, their revenue increases.
Furthermore, artists with diehard fan bases can release premium material in limited runs. Such material can combine merchandise, visual art, fan experiences, and other bonus content that could not be issued and traced transparently without being tokenized on the blockchain. Moreover, artists gain transparency in their royalty payments. When music sales take place on the blockchain, artists can receive real-time payments for streams.
Fans benefit from music NFTs in several ways. For instance, fans can gain more intimate experiences with their favorite artists. Also, some of the unique digital art and fan engagement experiences issued as NFTs simply could not be replicated in another single, convenient format. Furthermore, NFTs can give fans the opportunity to have a say in the direction of a particular piece of art through decentralized fundraising. Not only does this help to build a greater bond between fans and artists, but it also provides a mutually-beneficial method for creating independent music.
Another benefit is fan ranking systems. Such mechanisms gamify the audience engagement process to incentivize fans. An example of this is giving tiered access to music releases. Fans who engage with the social media accounts of their favorite artists the most can climb the leaderboards, gaining access to higher-level perks the higher they rank.
What is an NFT Music Marketplace?
Now that we’ve considered the question of “what is NFT music?”, let’s take a look at NFT music marketplaces. An NFT music marketplace is a decentralized application (dApp) where artists and fans can buy and sell NFT music products. Artists can upload tracks to NFT music platforms and distribute them on the blockchain. Also, fans can gain access to exclusive and rare material. Plus, limited edition NFTs can sometimes come with real-life experiences such as artist meet-and-greets!
An NFT music marketplace provides a secondary market for rare collectibles and other NFT music products. Popular musician Snoop Dogg has released a range of NFT music collectibles, including rare artworks and 10,000 unique avatars for The Sandbox metaverse gaming platform. Fans can buy these NFTs from an NFT marketplace for use in-game or for resale. Accordingly, these marketplaces play an essential role in NFT music distribution.
What are Music NFTs? Top NFT Music Projects
You can find music NFTs on some of the most prominent NFT marketplaces, including OpenSea and Rarible. However, these platforms do not directly support musicians beyond enabling them to sell their work on-chain. Below, we take a look at the largest music NFT projects by market cap, according to CoinGecko.
Audius is a decentralized music streaming service governed by a community of artists and fans. The native token from Audius, AUDIO, is the common medium of exchange throughout the platform. It enables fans to purchase music directly from artists. Furthermore, artists receive near-instant royalty payments without losing a hefty cut to intermediaries.
Staking the AUDIO token enables holders to have a say in the future development of the platform. Plus, holders gain exclusive access to premium content. In addition, users can earn a passive income in AUDIO tokens simply by interacting with the platform. Also, Audius features third-party stablecoins, fan tokens, and a range of common features you might expect to see in traditional streaming platforms.
Although NFTs did not feature in the early Audius product range, the platform now boasts a range of NFT collectibles and an embeddable NFT social media tool. Moreover, Audius is the most prominent blockchain-based music distribution platform.
Opulous is an NFT music distribution platform that combines elements of decentralized finance (DeFi) and decentralized fundraising to create “the first music copyright-backed NFTs”. The project facilitates a lucrative revenue stream using copyright NFTs. Also, Opulous boasts an NFT exchange that makes it easier than ever before to invest in emerging talent.
Furthermore, all royalties are traceable on the blockchain. As such, fans and investors are assured that their funding is put to use efficiently. In addition, Opulous provides fair and transparent DeFi loans for up-and-coming artists.
BitSong is a trustless NFT music marketplace and distribution network that enables artists to earn real-time royalties. Users can mint and trade fan tokens or buy and sell music NFTs using the native BTSG token.
Furthermore, artists receive 100% of their royalties. Accordingly, BitSong aims to unite artists and empower the music industry. Moreover, the platform provides an equitable blockchain-based alternative to traditional music distribution services.
Rhythm is a blockchain-based music streaming service that hosts over 100 million songs, videos, and podcasts. The Rhythm protocol is currently centralized. However, in the future, we can expect to see a decentralized application (dApp) implement a broader range of features and tools to enhance the user experience.
Furthermore, Rhythm uses NFTs for albums, playlists, and “pins”. Verified artists and creators will be able to sell their pins on the Rhythm NFT music marketplace. Also, rare and limited edition albums and playlist NFTs will be tradeable throughout the community.
The HUSL is a Web3 music label and distribution company based “in the metaverse”. The platform combines fan engagement experiences, NFTs, and crypto gaming to enhance the artist-audience relationship.
In addition, anyone can release their music as an NFT. The platform also features staking and liquidity mining. Plus, users can buy virtual land in the “HUSLverse”. Moreover, The HUSL boasts major strategic partnerships and innovative game-theoretic mechanics.
What are Music NFTs? – Summary
Music NFTs are disrupting the traditional music industry. NFTs help artists retain self-sovereignty over their music and their careers. Furthermore, NFT music marketplace services allow fans to buy and sell music, merchandise, exclusive experiences, and rare works. Moreover, NFTs enable musicians to combine visual art, music, rare collectibles, and fan engagement experiences. Without blockchain and NFTs, combining such a variety of products into a single format would be nearly impossible.
Now, when somebody asks you, “what are music NFTs?”, you should be well-equipped to explain this to them in detail. If you want to learn how to create your own NFTs, check out the Ethereum Game Programming course at Moralis Academy! Here, we teach students about the foundations of NFTs, including NFT standards and how to implement them. Also, this course teaches students how to build an NFT game from scratch. What’s more, you don’t need any prior programming knowledge to complete this course! Also, check out our Build an NFT Marketplace course if you want to learn how to build your own NFT marketplace!
There has never been a better time to learn a new skill in an emerging field. Blockchain education is among the most sought-after attributes in the job market. Whether you want to become a blockchain developer, manage a project, join a team or release your own music NFTs, Moralis Academy has the ideal courses to help you achieve your goals. Become blockchain certified today with Moralis Academy! Also, check out our “Blockchain in Supply Chain”, “Web3 Browsers”, and “What is Litecoin?” articles for further reading!