There has been so much hype and activity centered around NFTs that I felt compelled to dig in and lay out why NFTs are not ready for indie music.
OK, I’m going to just come out and say it: NFTs are bullshit.
Alright, I feel better already. Now, let me explain why I feel that NFTs have no value for independent music artists. I’ve got 13 reasons for you.
1. You don’t understand them
That’s right, the artists whose content would be attached to the non-fungible token (AKA NFT) don’t understand what they are, how it’s done, or why anyone would want them. Sure, artists are interested in selling NFTs, but they’d never buy one!
2. Your fans don’t understand them
Your fans don’t know what an NFT is, where the value is, or why they should own one. They don’t know what to do with an NFT. In general, NFTs are viewed by the marketplace with huge skepticism.
3. NFTs are confusing!
Do you know how they actually work? How you create one? I’ll admit, I don’t know, and I’ve been trying to figure it out for a while.
4. NFTs are hard to buy
There are many marketplaces where you can buy NFTs: OpenSea, Binance, Nifty Gateway, Rarible… the list goes on and the marketplaces are all different. For most, you need to buy the NFTs with crypto, which most of the world doesn’t own and doesn’t know how to get. And different marketplaces accept different crypto currencies. Many marketplaces don’t accept credit cards.
5. NFTs are inconvenient to buy
Most NFTs are sold as timed drops — a limited quantity are released at a particular date and time and you need to be there at that time in order to buy one — it basically works like an auction. In fact, I’ve tried on a few occasions to buy an NFT, but was unsuccessful. Not to mention, I couldn’t find anything I was interested in owning.
6. NFTs are technically complex
Do you know what an NFT wallet is? Well, you’ll need one — but which one? It will need to handle the particular crypto currency of the NFT marketplace you’re going to be buying or selling in. You need to figure out how to design or create your NFT. Then you need to learn enough about crypto to be dangerous. And you need to understand how NFTs are minted, what that even means, and how transactions take place.
7. NFTs today are all bought as speculation
It’s ridiculous. In May of 2021, this collection of Nine CryptoPunks sold at auction at Christies for $16.9 million! Yes, these little bitmapped images.
8. Your fans aren’t buying music NFTs
When I look at the marketplaces, most NFTs being sold and resold go for four, sometimes five, and sometimes even six figures. Who’s buying them? Not your fans! Most music NFTs today are bought by crypto bros who got into crypto early and rode the wave up. So, buying stuff with crypto to them is like buying with found money — or play money. For an early crypto investor, it’s no big deal to buy an NFT for six figures, because they didn’t actually work to earn that money. The crypto they own just blew up in valuation. Are your fans crypto bros? Probably not, right?
9. There’s a huge potential to lose
Like any speculative asset, your fans could lose big bucks on NFTs. Let me give you an example of the volatility of NFTs. You may be familiar with the NBA’s Top Shot NFTs. They functioned basically like digital trading cards and were cooler than most of the NFTs I’ve seen. A friend of my son’s bought some Top Shot NFTs cheap, then rode the wave up until, at one point, his Top Shot NFTs altogether were worth around $9,000. But today those same Top Shots have crashed in value and are worth only $600. And you don’t really want your fans to buy in at a high price and then lose a bunch of money, do you?
10. Crypto can come with huge fees
There’s a concept with crypto transactions called “gas fees.” If you want to transact in the more popular currencies — like Ethereum — there are a bunch of transactions, calculations, and logs that have to be executed on the blockchain. Computers on the network have to do all that work, and they extract a toll for that work — called a gas fee.
Basically, you have to pay the owners of those computers a fee for them to do the work required to let you mint, sell, or buy an NFT. With big cryptocurrencies like Ethereum, where there are lots of transactions to be done, the network can get very congested, and that drives up gas fees big time if you want to get computers on the network to execute your transaction. It can be hundreds of dollars to mint and buy a simple NFT. That means the gas fees alone can cost more than the NFT you just won at auction.
11. Scammers abound
Right now, NFTs are like the wild wild west. There are lots of scams out there, like people selling NFTs to which they don’t own the rights. And lots of scammers are looking to take advantage of inexperienced crypto buyers. There’s a good chance a buyer — or a seller — can get taken for a ride.
12. It’s a money grab for folks who’ve already got it
NFTs today are mostly an easy money grab by established names. If you’re Steve Aoki or Snoop Dogg and you create an NFT, there will be plenty of folks lining up to buy it in the hopes that they’ll be able to resell it for much more money in the future. Frankly, there’s not much value to the content of those Aoki or Snoop NFTs — it’s mostly a money grab during these wild west times.
13. NFTs are in their infancy
For all the hype about NFTs, we are really in the infancy of the NFT era — we don’t even know where this is all gonna go. It reminds me of the early days of the Internet. I’m so old that I was around when we used our dial-up modems to chat with each other via Compuserve or message via AOL. Eventually, viewing static web pages on a Netscape browser seemed like a huge revolution… and look at where we are now. I expect the same will happen with NFTs.
Which is why I’m actually really excited about the potential of NFTs. They may be bullshit right now, but I expect they will become a significant revenue driver for artists of all sizes in the future.
So now you know why NFTs are bullshit for artists today. But, there’s more! Check out my follow-up video, “NFTs Are The Most Exciting New Revenue Opportunity For Artists In A Decade,” where I discuss why I am genuinely excited about the potential that NFTs hold for independent artists.
Watch more great videos on the Disc Makers YouTube channel.
Tony van Veen is the CEO of DIY Media Group, the parent company of Disc Makers and BookBaby. As a college student, he played in indie bands, created his own LPs, cassettes, and t-shirts, and sold them at shows. Today, he collects CDs, vinyl LPs, and concert t-shirts to support the artists he loves.
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Great post! Thanks for sharing about nfts and indie music.
I completely agree with this. I will add that musicians are much better off going with a traditional, tried and true method of purchase. The fewer hands on the currency, the less chance of a problem.
WOW!
You are correct in one thing only. You do not understand the value of the NFT platform.
It is an extremely valuable tool for navigating intellectual property.
Get with a knowledgeable intellectual property lawyer and understand the possibilities.
Also, refrain from incorporating any vulgar language in your articles. It does not read well and violates the basic tenets of journalism.
I typically love your advice on music business and use much of it in my classes. This article disappoints and ignorantly refutes all of the advice I give on the benefits of using the NFT model in intellectual property.
Many of the entanglements artists think they need to pursue their ‘desired’ career path are not necessary.
You don’t have to tour the world. If you do, it will be because you’re making so much money it is practical for a world tour. Until then, you can work a region from your home base and earn a six figure income, if you’re any good, and have ‘product’ and ‘services’ to sell. Services are live play and audience interaction, socializing with fans. Products are merchandise, maybe hard-copy Compact Discs, or download cards, or USB’s, and t-shirts, hats, sew-on patches, stickers, pictures; maybe chicken wings and sauce. I don’t know you or what you can sell.
NFT’s are for big operators, from the sound of it, bigger than most of us ‘are’ or even ‘want to be’.
Learn to work the things that make you money, in the practical modes that are working for you.
Explore, but don’t think there’s a guarantee if only you buy some NFT’s and play L. A.
It’s your ‘Company’. Do what works for you. There’s a lot to be said for simplicity, in Song-Writing, in performing, in commerce, and in life.
I am an independent artist and NFT should been hu usually successful for me it’s unfortunate you were discouraging artist from doing something because it’s new and because you’re not fully educated on what it can really do for the independent artist
Great article! I agree NFT’s are just another modern way to screw artists out of money by non talented, covetous crooks! Thank you.
Mate, you don’t know how to create NFT, you’re stating that you don’t understand them at yet writing a blog post about NFT?? C’mmon man
“C’mon man” you should prove where he’s wrong exactly. Refute each of his points if you can. I think you’re just a hack who deals in NFT’s protecting your untalented fat ass. Come on man, prove it.
tony I found your dissection of NFT’S masterly and I felt you and I should have a chat very soon on Whatapp are you up for it?
Let me know and suggest a time for me to call you or the other way round!!
All the best,
Jeremy Holtom
Beyond Reality Music