Music NFTs: What They Are and How to Invest in the Music World

It’s no longer news. In recent years, blockchain technology has led to a significant transformation in the financial and digital arts sectors. One of the most relevant innovations in this context is represented by NFTs (Non-Fungible Tokens), which are also finding application in the world of music.

Music NFTs offer a new way to invest in unique and authentic musical assets, opening up opportunities for artists, collectors and investors alike. But what exactly are music NFTs? How do they work and what are the benefits for those who decide to enter this market? Let’s delve into all these topics to better understand how to invest safely and consciously in this new sector.

What are music NFTs: meaning and definition

Music NFTs are non-fungible tokens that represent digital assets related to music, such as audio tracks, albums, artwork, or personalized experiences with the artist. The uniqueness and authenticity of these assets is guaranteed by the blockchain, a decentralized and immutable digital ledger that records every transaction or change of ownership.

Unlike conventional music files, which can be duplicated, a music NFT is unique and authentic, and its owner is officially registered on the blockchain.

Music NFTs can therefore represent different types of content: exclusive audio tracks, unique music videos, extra content such as backstage and unpublished photos, or even rights to participate in exclusive events with the artist. This makes music NFTs particularly attractive to fans and collectors, who see them as an opportunity to own an exclusive piece of their favorite artist.

Because they are built on a blockchain, music NFTs leverage smart contracts, digital contracts that automatically manage transactions and can include clauses that guarantee royalties to the artist on every resale of the NFT. This feature is crucial for the music industry, as it allows artists to obtain a continuous source of income independent of centralized platforms.

How music NFTs work (and how to create them)

Music NFTs are created through a process called minting, which registers a digital asset on a blockchain, making it traceable and immutable. Here is how the process of creating and managing a music NFT works in detail.

1. To create a music NFT it is essential to choose the blockchain on which to register it. Most NFTs are currently hosted on Ethereum, which supports smart contracts and has a large network of users and developers. Other blockchains in use include Binance Smart Chain and Solana, which offer benefits such as lower transaction costs and fast confirmation times.
2. Next, a smart contract must be created, a digital protocol that automates the terms of ownership and trading of the NFT. For example, a smart contract can include a royalty clause: every time the NFT is resold, a percentage of the sale price is automatically paid to the artist. Smart contracts are crucial to ensuring the continuity of the artist’s rights and to ensuring that every transfer of the NFT is indelibly recorded.
3. Once the digital asset is uploaded, the minting process converts the file (such as a song or video) into an NFT. This step involves a cost in terms of gas fee, which is the fee paid for using the blockchain. Minting gives the NFT a unique identifier, recorded on the blockchain.
4. After minting, the music NFT can be sold on a marketplace. Artists often choose platforms such as OpenSea, Nifty Gateway or Royal to distribute their NFTs. During the sale, collectors can purchase the NFT by paying with cryptocurrencies, such as Ether (ETH), thus obtaining ownership of the asset and, in many cases, additional benefits such as passive royalties on streaming.
5. music NFTs can be resold on secondary marketplacesi, keeping track of each change of ownership. Thanks to the blockchain, all transactions are public and verifiable, ensuring transparency and security.

Minting a music NFT is a relatively quick process for the artist, who, thanks to intuitive platforms, can list their NFT for sale in just a few steps, maintaining control over the rights and royalties generated.

Where to buy music NFTs: platforms and marketplaces

There are several platforms dedicated to buying and selling music NFTs - some of which we have already mentioned - each with specific features and functionality. Below, here are five central platforms where you can buy music NFTs.

OpenSea

• The largest NFT platform, offers a variety of categories, including music NFTs, digital art and collectibles. Users can create, buy and sell NFTs using cryptocurrencies such as Ethereum. It is suitable for users who want to explore various types of NFTs, including niche music assets and works by emerging artists.

Nifty Gateway

• Curated platform that collaborates with high-profile artists and musicians, launching exclusive and limited NFTs. Its weekly drops attract collectors who want to buy NFTs from well-known artists or exclusive content. It also accepts payments in traditional currency, making it accessible to a wider audience.

Royal

• Designed specifically for the music industry, it allows artists to sell shares of their songs as NFTs. By purchasing an NFT on Royal, you are entitled to a portion of the royalties generated by streaming and sales, making the platform particularly attractive to those who want to invest in music.

Mintable

• Versatile and easy-to-use platform, similar to OpenSea, that allows anyone to create and sell NFTs. It offers several categories, including music content, and attracts both emerging artists and collectors thanks to low transaction costs and easy access.

Audius

• Decentralized streaming platform that allows artists to upload their music and sell it as NFTs. Emerging artists can reach their audience without intermediaries, while maintaining control of the rights to their content. Audius is a platform that is particularly appreciated for its focus on the democratization of music.

Each marketplace has its own unique characteristics, and the choice of the ideal platform depends on the investor objectives, the type of asset you want to buy, and the level of exclusivity you want.

Why invest in a music NFT?

Investing in a music NFT can be an interesting option both financially and emotionally. Here are the main reasons to do so.

1. Ownership of exclusive assets: music NFTs are rare and limited in number, representing collectible assets that can gain value over time.
2. Royalty income: many music NFTs allow you to receive passive royalties on streams and resales, offering the potential for economic return.
3. Support artists: purchasing a music NFT is a direct way to financially support your favorite artist, contributing to their financial independence.
4. Access to exclusive content: NFTs often include benefits such as access to private events, concerts or extra content, making the investment a combination of economic value and experience.

Benefits for musicians

Music NFTs offer musicians a new opportunity for monetization and control over their content. Among the main advantages:

In fact, artists can earn directly from fans, maintaining control over the rights and distribution of their content. Furthermore, they have the "right" to obtain ongoing royalties: thanks to smart contracts, in fact, artists obtain a share of each resale, ensuring fixed income in the long term.

But there are also other pros that should not be underestimated, especially in terms of marketing and loyalty:

• creation of a community: NFTs allow artists to interact directly with fans, strengthening the bond and offering exclusive content;
• Exploring innovative creative formats: Musicians can experiment with formats such as VR concerts or augmented reality experiences, expanding the possibilities of engagement.

Examples of musical NFTs in the Music Industry

Here are some very important historical cases that have marked the development of musical NFTs.

• Kings of Leon - When You See Yourself: The famous American indie rock band was among the first to launch an album as an NFT, offering exclusive content, concert tickets and limited edition merchandising.

• Grimes - WarNymph Collection: Canadian musician Grimes sold a collection of NFTs that included unreleased songs, attracting great attention for their artistic and innovative value.

• Shawn Mendes - Digital Wearables: Mendes has released a series of digital “wearable” NFTs that represent instruments and accessories linked to his public image.

• 3LAU - Ultraviolet Album: DJ and music producer, 3LAU sold his album as an NFT, including exclusive experiences and alternate versions of the songs.

It should always be remembered, however, that musical NFTs are an evolving reality, and the growth prospects are promising, both for investors and for artists.

Original article published on Money.it Italy. Original title: NFT musicali, cosa sono e come investire nel mondo della musica