HOW NON-FUNGIBLE TOKENS AND BLOCKCHAIN ARE CHANGING THE ART AND MUSIC WORLDS

March 8, 2021

Over the last decade, cryptocurrencies, fronted by Bitcoin, have fundamentally altered preconceived notions of how commerce can be conducted. Untethering wallets from the whims of regulators, corporate banking institutions, and governments, cryptocurrencies have delivered an entirely new medium through which people can buy and sell goods and services.

Blockchain, the same technology that has allowed cryptocurrencies to take the financial world by storm, has now made its way into a new market: art. In the form of Non-Fungible Tokens (NFTs), blockchain allows artists to sign their digital works with unique identifiers, safeguarding their originality. 

On the issue of security, while even the most skillful authenticators in the fine arts auction house of Sotheby’s have been mistaken — once auctioning off a forged Frans Hals — digital art tied to an NFT does not need credentialed authenticators at all, because it cannot be replicated. An NFT is a digital certificate of authenticity that says this image is the original. Though the image itself can be replicated, the token cannot. The token is what identifies the original which, like any piece of fine art, can be collected and held as an investment. 

In the case of cryptocurrencies such as Bitcoin, the blockchain ledger tracks users’ wallets and transactions. With Non-Fungible Tokens, the ledger is used track the sale, ownership, and authentication of digital assets such as artwork and music. This is the reason why NFTs cannot be duplicated: they reside on the Blockchain ledger. The Blockchain ledger is a dynamically expanding digital list that records and tracks transactions. Each record needs to be validated and verified by multiple computers, preventing the risk of any rogue user or group hijacking the ledger with fraudulent entries.

NFTs have even attracted the art world’s foremost socialites. Christie’s, the famed auction house that has presided over the sales of such indelible artworks as Leonardo da Vinci’s Salvator Mundi ($450.3 million, 2016) and Picasso’s Nude, Green Leaves and Bust ($106.5 million, 2010), has entered the digital fray. Reluctant to remain stranded as gatekeepers of an antiquated era, the esteemed auction house is auctioning a digital artwork by Mike Winkelmann, a digital artist known as Beeple. Beeple first made headlines when he sold a digital print, attacking former president Donald Trump, for $6.6 million dollars. Christie’s, by hosting Beeple’s latest binary-on-canvas on their site, has helped shovel spates of legitimacy onto the collection of NFTs as valuable art. Closing this week, current bidding for the original Beeple is at $3.75 million.

For budding artists eager to join the digital revolution, there are various websites through which one can upload digital art onto the blockchain and attach a Non-Fungible Token to identify its originality. Two such sites are Rarible and OpenSea

NFTs and Crypto-Art have attracted reams of artists for two main reasons: The first being the low bar of entry into the digital market. Though a boon for artists, this has overwhelmingly permeated digital galleries with a sea of memes and cheap pop art. But aside from the feeble barrier into the market, NFCs also bear the unique benefit of awarding artists with indefinite commissions of 10% on all future sales of their art. What this translates to is the following: if an artist sells their first digital print for $10, they make $10 off the sale. Years later, if they gain a following, the owner of their early works could decide to resell it for its appreciated value of, for example, $10,000. The original artist, despite having no hand in this sale, automatically earns a 10% commission on this second sale. For artists, this is a revenue stream entirely unique to the world of NFTs. No matter how many millions of dollars a Mark Rothko is auctioned for today, Rothko’s estate earns no part of the sale generated by his work. 

The digital medium of NFTs isn’t exclusive to art. It has broad implications in music as well. This March, the early-2000s rock band, Kings of Leon is set to release their eighth studio album, When You See Yourself in the form of a Non-Fungible Token, making them the first band to board the rapidly growing technology. 

When You See Yourself will be released as three different tiers of tokens, each corresponding to a package in a series the band titled, “NFT Yourself.” For the most ardent fans, the costliest package, the Golden Ticket Collection, in addition to exclusive artwork and a vinyl pressing of the LP, affords the holder such perks as four front-row seats to any one show of the band’s future tours and an in-person meet and greet with the band. The Golden Ticket NFTs are currently open for bidding, between ten and twelve thousand dollars per token. 

More modest NFT packages offered by Kings of Leon for their new album offer exclusive art (priced in the four figures), or limited editions of the record. As reported by Rolling Stone Magazine, all of the tokens were designed by the band’s creative partner, Night After Nightand were developed by a crypto-ticketing platform called YellowHeart.

Despite their disparate price points, all the NFTs carry the inherent advantage of paying unlimited royalties to the band through future commissions on their sales. Purchasers of the tokens can resell their NFTs in the future, presumably at higher costs as the crypto-art scene continues to grow and attract the gaze of collectors, and upon future sales, also benefit the original creators

In an interview with Rolling Stone Magazine, music industry veterans Shara Senderoff and Zach Katz, who now head Raised in Space Enterprises (RISE), a foundry for investing in tech startups in music, made the case that Non-Fungible Tokens are, for most people, the ideal gateway into the crypto world as they offer immediately identifiable returns for their money, in the form of music or artwork.

Lauding the blockchain backed medium, industry professionals in the same interview highlighted that despite being, as the name suggests, “non fungible,” NFT’s can be easily traded and kept track of. By being a part of the larger blockchain ledger, each NFT carries with it its entire history of transactions, offering a degree of transparency unavailable anywhere else in the art world. 

The music industry, over the past two decades, has shifted from CDs and digital purchases to streaming services like Spotify, entirely moving away from the concept of personal ownership. The advent of Non-Fungible Tokens presents fans with the opportunity to own something (new) of their favorite artist — as in the case of Kings of Leon, with their exclusive art pieces. Moreover, it gives fans a way in which to support artists financially through both their initial purchase and any future resale commissions.

As Zach Katz explained in the same interview, “NFTs are about getting to own or access things that I, the fan, otherwise wouldn’t… I’m getting to be a part of something that has a sense of scarcity around it, a sense of exclusivity — whether it’s a piece that I own and can wear as a social badge of honor to demonstrate my fandom, or it’s an access pass or passport into a set of exclusive experiences.” 

Although Kings of Leon are the first band to officially release a new album via Non-Fungible Token, the technology has already made its way into the music industry. In the EDM genre, Canadian electronic music producer, Deadmau5 began releasing over $100,000 worth of exclusive collectibles last December

In 2020, Portland-based DJ and producer, RAC, released a special edition of his new album, Boy, on cassette tape, linking it to a Non-Fungible Token, called $TAPE. A limited run of just 100 tapes and corresponding NFTs were made, initially selling for $20. As demand skyrocketed, the resale price quickly shot up to $950, and continued to rise. Currently, the cassette tape is valued at $9,516.65, making it more than twice as valuable as the most expensive cassette tape sold ever sold on Discogs.

Originally Published at The Daily Wire