We’re living in interesting times indeeed.
In the last few years cryptocurrencies have become well known to the mainstream, but the industry is constantly evolving and hasn’t really matured to the point where the majority understands it. But more and more sustainable coins and especially tokens are being launched where there is tangible value behind it and this year and the next we’ll probably see STO’s really start maturing to the point where it becomes a natural way of investing in companies.
However, the latest thing to emerge from the crypto-craze are NFT’s.
If you still haven’t heard about NFT, it stands for Non Fungible Token which is used especially in the world of arts to give a person ownership or “copyright” to an image, music or a “digital sports card”.
Yes, it sounds crazy to own a digital image that can be copied everywhere and anywhere, but the drops are selling for millions as we speak!
Many big artists like Snoop Dogg and Grimes have jumped on the wagon and are selling digital art. The crazy thing is that they still haven’t sold music (as far as I know). They simply created some images that they are selling for about a yearly salary or more!
So I thought, WTF is this? People are actually paying millions for an image from these new “NFT artists” that grow in popularity every single day.
I’m not going to use time in this post to talk about how crazy I think some of this NFT-thing is, I’ll just leave it here for you to ponder about:
This image sold for $69 million! One of the most popular NFT artists is called Beeple and people are paying MILLIONS for the “feeling” of owning his images.
And artist CryptoPunk are selling images like this for more than $7 million a piece! 😮
It can be hard to make sense of it all and the latest NFT craze got me intrigued and even though I think most of it is just a big fat hype like so many other things in the crypto-world, there are some really exciting things coming that I see great value in and where it makes more sense….at least to me.
The first thing that has been happening in the latest years is that artists are able to take alot more control and keep more of the rights to their content than before. At least if they don’t sell their life away in a 360 deal with a label.
And NFT’s open up for some great solutions for musicians and fans like funding, copyright and royalty sharing.
Imagine being an artist and you need funding for your new single, album or music video. Then you can call on your fans to invest in your project. And yes, in this scenario I say invest and not speculate because it would be an investment backed by a tangible value – the music.
Fans would get royalties for all streaming based on their share in the song, the album or even the entire brand of the artist.
Let’s say that you’re an up and coming artist that has already gathered a small, but strong following. You can now let your fans invest in NFT’s for your album and they will in fact receive their royalties. Now, we all know streaming income is not that great, but it can still be a great way for fans to feel that ownership and if you have thousands of them, they will most likely actually promote the album and push for more streams as well because now they are earning money on it.
Let’s say that it costs $5000 to produce a song. You get 1000 fans to invest $5 each. Now they all own a piece of that music. After about 1 million streams, they would in fact start to make a net profit if you only count the streams. Let’s say that it does this in a year and then continues to do 1 million streams every year, maybe for decades!
Well, then you have 100% yearly ROI which in fact is an extremly good ROI and for an artist with a good reputation and following, it could be low risk and great ROI for the fans!
This and the fact that the NFT’s are considered “scarce collectibles”, much like being the rightful owner to something truly unique gives it the potential to increase in value like famous paintings or other types of art.
In addition, if a song has 1000 owners, they will probably push it like crazy on social media, share with all their friends and proudly talk about it on forums and it would very soon be picked up by algorithms and playlists on streaming services.
And even though NFT’s is the hottest thing in the crypto-world right now and it is probably a hype in regards to where it is in 2021, but there are some really cool and interesting technologies emerging from this craze!
It will be exciting to follow this technology! 🙂
What do you think about this?
How much would you pay for this image of Snoop Dogge Coins?