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Why non-fungible tokens are more important than just another collectible craze

>BY ANDY HOLLOWAY

Non-fungible tokens are the latest crypto craze, but they appeal to artists, too.

If you’ve been following the investing craze around nonfungible tokens (NFTS), you’ve likely noticed the growing field of digital collectibles such as video highlights of various National Basketball Association stars dunking. One such highlight featuring Lebron James sold for a whopping US$387,000 in April. Of course, that’s relative peanuts compared to a physical James’ rookie card that in April sold for US$5.2 million.

But such hype misses the bigger point that NFTS can be used to monetize all sorts of things, including artwork and music, the latter industry being particularly burnt by generations raised on Napster and then almost-free streaming services. “This is a great way for artists at all talent levels to sell artwork,” says Deacon Hayes, president of Well Kept Wallet, an online personal finance centre. “While artwork for known artists like Banksy might be out of reach for the average person, there are hundreds of other talented artists that you could get digital artwork from at a reasonable price,” he says. “As far as music, it is another way for musicians to monetize their talents. In many instances, the music accompanies some sort of art, as in the case of a piece by Steve Aoki that went for US$888,888.88.”

In February, Justin Blau, better known as the electronic dance musician 3LAU, sold 33 NFTS for various prices, including US$3.6 million for a custom song, access to never-before-heard music on his website, custom art based on his music and new versions of 11 original songs on his three-yearold album Ultraviolet. The buyer also got a vinyl copy of the record, notes Raine Maida, lead singer for popular Canadian rockers Our Lady Peace.

Maida is a longtime technology fan and was recently appointed chief product officer at S!ng, an app that uses the Canadian-built

Ethereum blockchain to help monetize music as NFTS on behalf of artists, essentially getting rid of the middlemen. “The power of Ethereum, and I’m not just talking about blockchain, but Ethereum specifically, is a smart contract,” he says. “And that can really be whatever you want it to be.”

Maida is realistic enough to know that not every artist is going to make millions from NFTS and that the blockbuster prices are not going to last, but he has faith that the technology can change things for the better. “I think from the ashes, what will happen, and what S!ng is betting on, is that we can build something that’s actually resilient for artists,” he says.

The key, Maida says, is protecting an artist’s intellectual property, rather than giving it away to a record company or receiving a small fraction of a penny for streaming plays. A band or musician could sell demos, artwork and live shows, and still retain all the rights to them, even preventing them from being resold for a profit without getting a cut of the action.

“It’s a game changer. I hope this isn’t a cliché, but I think it gives us superpowers, because we’re changing the pillars of what we do,” Maida says. “There’s new distribution, new monetization and new community building. Removing those old constructs just puts the power literally back into the artist’s hands.”

Of course, NFTS are still going to be seen as an exciting new investment vehicle, Hayes says, but they are risky and should be approached with caution. “The underlying digital asset is only worth what people are willing to pay for it,” he says. “It does not produce revenue like a company traded on a public exchange, so the value is really in the eye of those willing to purchase the asset.” And if you’re going to buy one, he advises not to misplace it. Even digital assets can get lost.

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