NFT's - What's Hype What's Real?
Pop Star Doja Cat announced that she is launching her own NFT marketplace called "Juicy Drops" in what is yet another artist taking a leap of faith into Crypto
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Hi Everyone,
Today, Amala Ratna Zandile Dlamini, also known as Doja Cat, also known as the artist who went viral on TikTok and has 85 Million views on YouTube for her single, Mooo, where she eats cheeseburgers and fantasizes about being a cow on a farm, also known as another TikToker in LA, launched her own NFT marketplace called “Juicy Drops”
Unless you have been living under a rock, you would have at least heard of NFT’s, the newest buzzword in Crypto, and the fact that its adoption has been through the roof the past few weeks.
For the uninitiated, NFT’s or Non-Fungible Tokens are a form of Cryptocurrency which represents ownership of any real-world (Offline or Digital) asset. These tokens, unlike traditional currencies or even digital currencies, are Non-Fungible, meaning that no one NFT is the same as the other.
Unlike the US Dollar or even Bitcoin, which is fungible, meaning each unit of the Dollar or Bitcoin represents the same value and can be freely interchangeable with other units of the same currency.
But how is the “Non-Fungibility'“ aspect of the token enforced? The ownership of the NFT is recorded on a public blockchain, which is verified and time-stamped for anyone to see and cannot be edited or tampered with.
Hence, at once, only one person can claim ownership of a particular asset using an NFT. Unlike Bitcoin and other cryptocurrencies, the asset itself is not scarce, meaning that the piece of digital art or song or any other asset which has been converted into an NFT, can simply be reproduced by anyone. Just like I downloaded the image below, whose NFT sold for $69 Million at an auction.
It’s like the classic example of the Mona Lisa. Anyone can make a rip-off of the painting and claim it to be the original, but because it is public knowledge that the original Mona Lisa resides in the Louvre Museum in Paris, there cannot be any other painting that can claim to be original.
This is easy in the case of famous paintings such as the Mona Lisa, because of the history and prestige attached with it, however, it is nearly impossible with digital assets based on the internet, where there is practically no way for anyone to prove the ownership of a particular piece of digital art or song or any other internet native asset.
NFT’s come in the picture here, wherein they enforce through public consensus on a Blockchain, that the ownership of a particular asset lies with only one person or one wallet address at a time. It is easy to make the ownership of a particular asset programmable, meaning a musician could ensure that whenever their NFT is resold, they earn a particular percentage off it as royalty.
But why are artists and musicians jumping on this train here? Steve Aoki, Kings of Leon, and even Mick Jagger and Dave Grohl have seen their NFT’s been bought in public auctions for millions of dollars.
While a lot of it has been for charity, the honest truth is that NFT’s are fun. Artists and musicians are some of the most creative people on earth, and getting in early on a trend is just another entertaining way for them to connect with their fans.
Does that mean that NFT’s are a fad? Well, Not really.
They solve a real problem when it comes to verifying the ownership of an asset, which was earlier trusted upon centralized authorities. It is now easy for anyone to just tokenize and verify ownership of their assets in a trustless and decentralized manner, with the records stored on a blockchain.
So will eventually all artists start releasing their songs as NFT’s and mint millions?
Very unlikely. The biggest paradox with this is an artist or musician would want their work to be seen or consumed by as many people as possible. NFT’s on the other hand gain value by ensuring scarcity of the piece of work.
As an artist, there are only so many people who would be able to consume their content if they start minting out NFT’s, and even then, only the really popular ones such as a Steve Aoki or Mick Jagger could make money off it.
For an up-and-coming independent musician, who is just starting out, it is unlikely that the best option for them would be to release their work as NFT’s and limit the organic reach of their work.
So how can Blockchain solve the problem of artists not getting their fair share of revenues due to the complicated structure of the Music Streaming Industry? (Read more about it in an earlier newsletter of ours here).
Tokenising artist earnings and setting it up on a Blockchain would directly eliminate the middlemen of Record Labels and Distributors. It would be as simple as a fan purchasing stocks of their favorite artists, like buying stocks of any company and participating in the earning potential of an artist in the future.
This might sound far-fetched, given the current state of the Music Industry, but Crypto and Blockchain open up possibilities to make assets and money programmable in a trustless manner, which was not possible earlier.
Incentify is working towards solving this problem, so keep checking this space for updates on that front.
Till then, enjoy our content, and feel free to get in touch if you would want to get involved in this project in any manner!
Have a good one guys, we’ll talk tomorrow.
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