You knew it was coming. I knew it was coming. Anyone who regularly checks the net worth of singer-songwriter Grimes knew it was coming.
I’m going to be perfectly honest here: I’m not a technology expert, and I don’t really want to be. I’m definitely content to stick to music and writing, where things feel relatively nice and uncomplicated most of the time. But like a tax deadline or the last day of a vacation, the slow tide of technology has been creeping up on the music industry, and it’s probably best not to ignore it any longer. The IRS and the ocean are probably more forgiving.
I’ve been staring at an empty Google doc on and off for the last few days, scrolling through a bunch of open tabs with articles on blockchain and dogecoin and philosophies of art. It’s been really informative, but also pretty boring.
But here’s the good news: I absorbed all that information and boredom, so you don’t have to.
I’ve probably spent ten hours reading just to write this short-ish article. Before those ten hours, I knew almost nothing about blockchain or cryptocurrency or NFTs (except what my friend told me about his bitcoin at a party two years ago). Now, though I’m equally confused, I can at least put my confusion in the appropriate terms, and summarize what 10 hours of research will get you regarding a topic as complex as NFTs.
So here’s what we’re going to do.
I’m going to take you through the simplest stuff, if the form of the question-googling journey I went on over the last few days. We’ll be starting at the same place I did (pretty much no understanding of the subject) and hopefully ending with working knowledge that can help you make sense and make use of all this NFT stuff.
Sound good? Sweet. Here we go. Let’s start from the beginning of my Google rabbit hole.
Question: Did Grimes really make $6,000,000 in 20 minutes off of NFTs?
She only made about $5,800,000. Big difference.
Just to clarify, a billion Spotify streams will only make you around $4,000,000 dollars. So, she made more off NFTs in 20 minutes than she made over the last 5 years from Spotify combined. Talk about increasing your productivity.
Question: What does NFT stand for?
Answer: Non-fungible Token.
Alright, that doesn’t sound so complicated. Now I just need to figure out what fungible means, and an NFT should just be the opposite of that. This isn’t so bad after all.
Question: What does fungible mean?
Answer: Able to replace or be replaced by another identical item; mutually interchangeable.
Okay, now we’re getting somewhere. It sounds like an NFT is some sort of digital token that isn’t replaceable, and isn’t identical to anything else. Like a snowflake, but on the internet.
This is easy. I think I’m ready to just get straight to the point.
Question: What is an NFT?
Answer: You’re going to regret asking that real soon, buddy.
Okay, maybe Google didn’t actually threaten me. But I pretty much instantly regretted googling “What is an NFT?” because they started throwing words like “digital ledger,” “blockchain,” and “cryptography” at me.
Here’s what I gathered from the people who were writing in terms that made sense to me:
NFTs can pretty much be anything digital, but for our purposes, we’ll mostly focus on the ones that are, in some way, related to art (I know “art” is a vague term, which I’ll discuss in a sec). In the most basic terms I could find, an NFT is a piece of data that’s guaranteed to represent something unique, thereby acting as proof of ownership for the unique thing.
So, to buy an NFT is to essentially buy the rights of ownership to a piece of digital art. That would be simple enough, except that most of their appeal is the fact that they operate on blockchain technology. You hate to see it.
Question: What is blockchain?
Answer: It’s complicated. Like, really complicated.
If you haven’t noticed by now, the term itself is made up of two words, “block” and “chain,” which are a description of the process by which the data is stored. Every time a transaction occurs, it’s placed into a block (think of writing a word on a page in a book). When that block fills up, it’s added to the end of the chain of previous blocks, and makes way for a new one (think of filling up a page in a book and turning to the next one). The information compounds over time, so that the more transactions there are, the harder it is to hack, because all new information is linked to all previous information (think of trying to start War and Peace on page 952 and having no idea what’s going on).
Seems simple enough. Kinda.
Except for the unfortunate dilemma that nobody can say for sure that’s what blockchain is.
The problem is that blockchain has no set definition; it hasn’t been around long enough for people to agree on what makes something a blockchain. Most commonly, the term is used to refer to a digital record of financial transactions (payments), recorded cryptographically (in code), chronologically (in time-based order), publicly (for everyone to see), and decentrally (without any single party controlling it). However, there are plenty of things that have been called blockchains that only fit a few of these criteria, and some that don’t fit any.
So it’s complicated. And everybody’s sad about it.
All that to say, everyone can at least agree that most NFTs operate using blockchain, and the majority of them run on the blockchain of Ethereum (a cryptocurrency).
Which brings us to…
Question: What is cryptocurrency?
Answer: Digital money that runs on blockchain.
The US dollar is worth whatever the US government says it’s worth. Cryptos are like that, except their blockchains ensure that their value isn’t determined by a centralized entity, like a government. Instead, because they’re decentralized, their value is based on how many people say they’re valuable. And anyone can join (or get scammed into joining).
Of course, there are things that give currencies better chances of becoming and staying valuable, like scarcity, durability, utility, etc. Most cryptocurrencies are better at some of those things than physical money. That, paired with the psychological excitement of a new unexplored technology, sets up cryptocurrency as a legitimate form of payment.
Bringing it back to NFTs: most popular NFTs right now run on the Ethereum blockchain, so Ethereum is the common method of payment (though not the only one). If you sell an NFT for Ethereum, you can exchange that Ethereum for another currency, or keep it and hope it gains value over time. Or, if you buy an NFT with Ethereum, you can keep it because you like it, or wait for it to gain value.
Question: Where can I buy and sell NFTs?
Answer: Wherever there’s wifi.
Websites like OpenSea, SuperRare, and Nifty Gateway are a few marketplaces where users can buy and sell NFTs. They operate like any other online store, without the potential sketchiness of Craigslist or the slightly tamer Facebook Marketplace.
Question: Why should I buy and sell NFTs?
Answer: For the same reason people buy and sell art.
Alright, now we’re finally getting to that point I brought up earlier: art is a vague term. Tolstoy certainly thought so (that makes two Tolstoy references so far, for those of you who are counting).
NFTs are unique in the same way that the Mona Lisa is unique. You could download the same content of most NFTs just as easily as you could print out or make your own copy of the Mona Lisa. But owning a copy of something doesn’t give you the rights to that thing. You have to own the original. And for whatever reason (ask art collectors), owning the original is just way cooler.
The NFT world has been labeled “digital art collecting” because that’s exactly what it is. It’d be dope to own the original Mona Lisa. In the same way, it’s kinda cool to own Logan Paul’s trading cards or this gif of a cat dressed as a poptart flying through space. Sure, anyone can download it and have their own copy of it. But you have the original.
Question: Wait, so anyone else can download the NFT I just paid a million dollars for?
Again, with most NFTs, the thing itself is not being sold. It’s the ownership of the thing. Some NFTs have physical inclusions: codes that will get you a limited edition vinyl record, or a new single before it’s out, or concert tickets. But in most cases, it’s a digital thing that everybody else can see and use. You just have bragging rights.
Question: Why are bragging rights so expensive?
Answer: Because the human psyche is wired so that value is defined by things like comparison, competition, ownership, and power.
It’s lonely up here on my soapbox.
Now, I’m not going to claim I know what makes art valuable. I’ve personally had my life changed by music, but not in the same way that I’ve had my life changed by food. Art’s value is very difficult to put into words, because things like beauty, excellence, and goodness are so often unquantifiable by traditional metrics of success. Society seems to need art, in some capacity, to survive. But, for a lot of reasons, it’s harder to put a price tag on a song than a bag of chips.
Things get even messier when they get digital, because unlike physical art, digital art is 100% reproducible. Most people find it really hard to wrap their heads around paying for something they could just download for free, but there’s something undeniably appealing about owning something nobody else owns, for reasons of competition, power, etc.
Anyway, art is important, but also weird. It often capitalizes on the best and the worst parts of us. But for better or for worse, NFTs have made that paradox digital.
Alright, soapbox over. Now let’s end with some application for you artists and musicians.
Question: I’m an artist / musician. Should I start selling NFTs?
Answer: It depends who you are.
Here’s a general rule of thumb. If someone would pay for something you autographed, you might benefit from selling NFTs. If not, then you probably won’t.
Similar to an autograph, NFTs are valued because of what they represent, not what they are. Grimes was able to sell hers for so much money specifically because she’s freaking Grimes.
That being said, some works of art really do have a better chance of being valuable. Coldplay’s “Yellow” was more likely to succeed than The Shaggs’ “My Pal Foot Foot” because it’s a better song. So, if your art is really, really good (again, hard to quantify what makes something good), then it could be worth casting a line into the NFT world and seeing if there are any bites.
All that said, if you’re reading this article, it probably wouldn’t be an easy task for you to start creating NFTs to sell. So, if you’re a small artist who doesn’t fully understand how it all works, then it’s almost definitely not worth your time to start selling NFTs.
Question: Are NFTs here to stay?
Answer: That’s relative. But probably, kinda, maybe.
Again, I’m not an expert. And I’m definitely not a futurist. Five years ago, I thought Twitter would be gone by now; but here we are, still condensing our thoughts into 280 or fewer characters.
For better or worse, NFTs may mark an important shift for art in the digital age. They’re exposing humanity’s collective obsession with ownership and competition; they’re showing that the idea of value is relative; and they’re doing all of that digitally, where a low percentage of people understand what they’re getting into. It’s a recipe for… well, something. Hard to tell.
There’s already been a dramatic decrease in NFT news since the first major spike. But that’s to be expected from anything like this; the internet has a short attention span. Things get popular, then become obsolete, then bounce back because Elon Musk tweeted, etc.
Here’s the thing: NFTs have a solid chance to stick around the more seriously people take them. The technology upon which they’re built is groundbreaking, and there are a lot of merits to buying and selling original pieces of digital content. While the first boom was most likely a product of excitement and FOMO, that’s separate from the question of legitimacy: NFTs really do have value. It’s just hard to quantify.
If you’re an artist or a musician, I’ll end by offering this thought: don’t get on the NFT train just because you heard it was a way to make some quick money. As I said, it’s probably not worth your time. If you do it, do it because you want to contribute more art to the world. Regardless of the fate of the NFT trend, there will always be a need for real, authentic artists who care about their craft.