NFTs, short for non-fungible tokens, are tradable and unique digital assets that run on a blockchain network. Every NFT stores identifying information that verifies its authenticity, as well as the protocol for its exchange, in a smart contract, and a record of every time the item changes owners is stored on a globally distributed ledger.
NFTs have been around for a couple of years but have exploded in popularity within the last couple of months. If you browse one of the most popular sites for buying NFTs you will mostly find art, but NFTs have huge potential for increasing musical artist’s revenue through royalties and merchandise. Deadmau5 recently made a series of affordable yet scarce digital collectibles for his fans and on 2/28/21 Grimes will be releasing an art collection for auction.
With the power of NFTs, it is now possible for an indie artist to crowdfund their projects by auctioning off a percentage of a song’s royalties to their fans, instead of being incentivized to enter an unbalanced record deal just to receive an advance. It is also possible to reward loyal fans with collectible NFTs or song royalties, this is a huge step being that large groups of fans have never been able to be automatically compensated for their promotional behavior in the past.
In the streaming arena, platforms such as Audius and Rocki aspire to make it possible for artists to regain control of how their music is distributed. In the new era of music, artists are no longer incentivized to chase streams but to build community and tell meaningful and valuable stories.
The most interesting aspect of NFT's that I have seen so far, has been this crowdfunding for artists that you have mentioned. The music industry infamously has manipulated and legally stolen from artists through disgusting 360 deals. I think this space for the use of NFTs has a very interesting future, imagine finding a song you love on SoundCloud and being able to invest in the artist through NFTs, I could realistically see myself doing this even though I never saw the real value in NFT art. I get the concept but personally couldn't see myself buying one.