As someone who doesn’t really know a lot about cryptocurrencies, hearing about NFT’s (or non-fungible coins) being involved in the music industry has made me curious to learn more. So, I decided to do my own research on what NFT’s are and why they are popping up in artist’s worlds. Firstly, an NFT is a brand new digital asset where ownership is recorded on a blockchain. A blockchain is a digital ledger similar to the way bitcoin and other cryptocurrencies are underpinned. Just like fine art, when you purchase a NFT it is unique and cannot be duplicated. For example, if you purchased art as an NFT you have sole ownership of the original, even if other people have an image of the art they do not have the original product. Which is what made the idea so intriguing to people. Some places let you buy them with a credit card but many of them only let you buy them with cryptocurrencies.
I found all of that information from this article and I honestly still don’t really understand it. I think it’s because it’s literally not a tangible thing that you can see and visualize (the cryptocurrencies speaking). As a visual learner reading that out still made no sense, so after searching further I found an article that attached in this YouTube video, where it explains it in tangible terms and helped me understand it a little. Now, to dig in further I’d like to go over the advantages and disadvantages of NFTs that I had noticed throughout my search.
Advantages
Some people have said that NFT’s could be “the ultimate vehicle for putting every significant asset on a public or hybrid blockchain with 100 percent immutability and security.” (via an article on Coin Telegraph)
They “allow you to detail more of the attributes that make them special – far beyond the name, balance, token supply and symbol” (via u/0xcert on Reddit)
It cannot be exchanged or duplicated like regular cryptocurrencies
They can create digital scarcity that can be authenticated without the need for a centralized organization to confirm their veracity.” (via Pelicoin)
Disadvantages
“There is still a lot of uncertainty. Given the newness of the technology and the complexity of copyright laws worldwide, smart contracts in a decentralized system could easily run into issues.” (via Kristin Robinson)
They cannot be divided, so you are stuck with less flexibility when it comes to using and buying them.
They rely on the “manufactured concept that something is limited when it is not to make it appear valuable, and although this exclusivity brings in higher price tags at marketplaces, it excludes many of the artist’s fans when it was not necessary to do so.” (via Kristin Robinson)
They are responsible for the “millions of tons of planet-heating carbon dioxide emissions generated by the cryptocurrencies used to buy and sell them.” (via the Verge)
In this article, they explain NFTs in detail and how it has affects the environment, as well as how people have reacted to “ArtStation, an online marketplace for digital artists, [that] canceled its plans to launch a platform for NFTs within hours after getting a lot of backlash from people who think dealing in crypto art is environmentally unethical.” There have actually been a few artists who have backed out in their NFTs after hearing about the effects it has on the environment. An example of the level of emissions it gives off would be Space Cat which was basically a GIF of a cat in a rocket heading for the moon, “Space Cat’s carbon footprint is equivalent to an EU resident’s electricity usage for two months, according to the website cryptoart.wtf.” In a world where climate change is a significant issue, people who are passionate about it, like myself, would definitely be turned off by that idea.
The only real perk about the NFTs, at least in my opinion, is it’s uniqueness and trendiness. I've been seeing a lot of flaws pop up about it that must be recognized before this could potentially be a new asset. In another article it’s explained that there have been “bad actors” that have begun to mint a number of digital artists work “as NFTs and listed for sale without their permission.” Unfortunately, because an “NFT is immutable, once it is minted the NFT itself cannot be ‘taken down.’” So then those artists may have their work out for sale and will not be associated with them, and that can be a huge issue within the industry. I personally don’t find it appealing and the complicated nature is enough for me to turn my nose up from it. However, I can imagine why it’s become such a topic as it is a curious idea and something people should look into further before establishing an opinion on it.