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NFT: TREND OR INDUSTRY-DISRUPTOR? – [READ]

March 15, 2021

In a time where artists earn less than half a penny per stream and music streaming services report billions of dollars in revenues, some creatives are beginning to sell valuable, and sometimes intangible pieces called “NFTs.”

NFT stands for “non-fungible token,” meaning that the one-of-a-kind item cannot be exchanged. The token’s value is attributed to its authenticity and singular ownership. An artist could release a physical album and auction off its artwork as an NFT , and whoever wins the bid “owns” the art piece.

The original “Nyan Cat” GIF was recently sold as an NFT for 300 Etherium (ETH), approximately $590,000.

Even though anyone could go to the store and purchase a copy of the album, the official online certificate would only list the auction’s winner as the unique owner. The only way ownership can change is if its current owner sells it for a blockchain-backed cryptocurrency, like Etherium.

As currencies begin to digitize, so do other sources of value. This begs the question: is owning intellectual property just as valuable as owning the “real” thing?

The full range of NFTs sold by 3LAU earlier this month

Many new collectors and artists seem to think so. In the past year, the NFT market grew by 300% and many creatives are beginning to reap the benefits. House music headliner, 3LAU, recently auctioned 30+ NFTs for his latest album, and sold them for a record-setting $11.6 million.

The cryptocurrency-savvy producer inspired other electronic music artists to sell NFTs. Dubstep legend, Dubloadz, debuted as an NFT artist with the recent auction of one of his digital drawings. Even though artists are receiving fair compensation for once, others worry that this practice may harm the environment.

well holy hell 😭 pic.twitter.com/mxog5BGuyr

— Dubloadz (@Dubloadz) March 5, 2021

The complex process of carrying out transactions and verifying ownership via blockchain is very resource-consuming because it requires lots of processing power and machinery. A recent vendor’s showcase racked up 8.7 mega-watt hours worth of energy. To put things into perspective, one mega-watt hour is equivalent to the amount of energy used by 330 homes in an hour.

Experimental bass producer, Eprom, used his sale as an opportunity to advocate for environmentally-conscious NFT behavior. The artist donated 25% of his proceeds to the carbonfund.org in order to offset the emissions generated by the transaction.

25% of the proceeds from the initial sale of this NFT will be donated to https://t.co/HHyILKb9YJ to (more than) offset the emissions generated by the minting and sale of this NFT.

— Eprom 🌹 (@eprombeats) March 9, 2021

The NFT market is expected to expand, as more and more collectible offerings are listed for sale. From 1-of-1 illustrations to exclusive music, the possibilities are endless. This method of compensation gives creatives more freedom and threatens outdated payment models.