NFTs is an acronym for Non-Fungible Tokens. Non-Fungible in the sense that they are unique and cannot be interchanged like fungible assets such as Bitcoin. Non-Fungible Tokens are unique, easily verifiable digital assets that can represent items such as GIFs, images, videos, music albums, and more. Anything that exists online can be purchased as an NFT, theoretically.
One reason to buy an NFT is for its emotional value, which isn’t so different from physical objects...unless you’re a total utilitarian. No one buys lip gloss because they need it. They buy it for the way it makes them feel. The same can be true for a GIF, image, video, or other digital asset.
The other reason is because you think it’s valuable...and will only increase in value. And yes, you can make money off of an NFT by buying and reselling it for more.
NFT record label guarantees the artist full ownership of their music. By providing a certificate of ownership, an NFT record label ensures that the relationship between the label and the artist is mutually beneficial.
A significant number of unsigned acts have made more money selling NFTs than via streaming platforms. According to Delphi Digital, Catalog sales are not linked to an artist’s popularity on Spotify: “Sales have tended to clump around ~1 ETH, without a ton of variation based on Spotify monthly streams. This suggests that early collectors are willing to support less established artists and are putting a premium on the “firstness” of early-adopter musicians.
It is safe to say that NFTs and web3 are disrupting the music industry as we know it. In web2, artists depended on labels, streaming services and touring to generate income. Moreover, they had to deal with countless middlemen who take a significant proportion of the royalties artists earn.
Through NFTs, artists can make money by selling their music NFTs directly to fans without needing intermediaries such as streaming platforms, labels and distributors. Moreover, the low barrier to entry into the web3 music industry means that any artist can release music and make money as an unsigned musician.
Much like the airdrop function in Apple’s iOS world where you magically send someone a file, airdropping in the crypto space means to send a token to someone’s crypto wallet. Many NFT creators airdrop clients additional tokens (other NFTs, social tokens, etc.) as a way to thank them for playing their part in the community. The recipient can either accept or deny the airdrop.
This is an “immutable” database for cryptocurrency; a ledger of digital transactions. Blockchain’s advantage is that it’s extremely secure. The ledger must be stored on multiple computers/nodes across the world, and transactions are validated by consensus, meaning it’s difficult for hackers to crack and steal the cryptocurrency stored on a blockchain. And remember, NFTs are non-interchangeable tokens that live on a blockchain.
Often shortened to crypto. This is the currency exchanged on blockchains — so it’s also what you’d use to buy an NFT. There are many types of cryptocurrencies (BTC, ETH, AVAX, SOL, MATIC, etc.) just like there are many types of currencies in the world (dollars, euros, yuan). You might’ve even heard of some cryptocurrencies named after cute little doggies. And just like physical currency, each type of cryptocurrency has its own value that fluctuates daily. Unlike physical currency, new types of cryptocurrency are created with much more frequency. In fact, some artists, labels, and music scenes are even creating their own crypto – which is something we’ll discuss later.
To release an NFT. This is used in the same way it is for a music release. An artist has “dropped” a new single.
The cheapest NFT in a creator’s collection. It’s the least amount of money someone would have to spend to start collecting from that creator’s project. Think of it like merch. A sticker or pin is a lot less expensive than a shirt. So if someone wants to buy some merch from you but doesn’t have much money, they’ll start there. Same with NFTs. A prospective buyer who doesn’t want to invest too much yet will buy at the floor price to start their collection.
The fee incurred for a blockchain transaction. Remember, even though a crypto transaction is entirely virtual, it does require real-world computational effort and energy to process, which has caused some to raise environmental concerns. There is an active and nuanced debate around these concerns, of course, and many blockchains are developing consensus mechanisms that limit energy expenditure.
The first NFT you’ve ever dropped. This is your entry into the NFT space.
To create an NFT on a blockchain so it can be listed for purchase. Think of this like printing a shirt or pressing a CD.
When you create an NFT, you also set its scarcity. An NFT that is one-of-one is entirely unique: there is only one! Similarly, one-of-five or one-of-100 are indicators of an NFT’s rarity. Scarcity can influence demand, but it doesn’t guarantee it. Assuming there is demand, smaller supply means there aren’t as many for investors to buy; price goes up.
If someone no longer wants to hold your NFT, they can re-sell it. One of the coolest features of NFTs though, is you can set a percentage of all future transactions that get paid to the original creator – in perpetuity. That means the revenue you earn whenever the NFT trades hands can increase as your career and stature grow as an artist. This is also a revenue opportunity that didn’t exist in the world of physical music media. When one of your albums is dumped at the local record store, and sold from the used CD bin, you are locked out of both those transactions. Not so with NFTs.
This refers to the usage-based value an NFT has beyond merely possessing the token. Some NFTs unlock benefits for their holders, such as access to an exclusive club. Musicians can use NFTs to offer their owners access to backstage passes at shows or exclusive merch only available to those who bought the NFT.
A digital storage for cryptocurrency, NFTs and tokens. Or perhaps more accurately, a digital way to access and transfer the tokens you own.
This buzzword points to the next possible evolution of the Internet.
Is the phase of internet usage where anyone could become a content creator with relative ease, posting comments, sharing photos, publishing videos. This was thanks to platforms that simplified the whole process for average users (abstracting away all the technical layers). In return, we let them own all our associated content and data. You know the rest of the story.
Saw technically-proficient people publishing static content to the web, while the rest of us mere mortals would find it and read it. That was the end of the interaction.
