Art, Music, and Communication: Which of These Areas Can Be Transformed by NFTs? Many people believe in digital tokens, and some are skeptical.
“Stop asking you to do NFT,” American rap star Kanye West recently wrote on his Instagram profile. It is difficult to imagine the world of hip-hop without the subject: Berlin rapper Cole Savas, for example, sold the lyrics to “King of Rap” last October as NFT for 30 thousand euros. In December, the world’s first SMS was sold as NFT for 107,000 euros, and in the summer of 2021, the first source code for the World Wide Web (WWW) was sold for the equivalent of about 4.8 million euros.
NFT stands for non-fungible token (non-fungible token). They are digital certificates of authenticity that refer to tangible objects or virtual goods. Although there can be any number of mirrors of an object, only one NFT can be considered the original, and thus can only be assigned to one owner.
Digital symbols on everyone’s lips. In the art and music industry in particular, many expect new business models from digital degrees. Some experts are also convinced that NFTs can also change the way we communicate. What is the noise? What potential do NFTs have – and what are the risks?
There has been a real NFT boom in the art market since the beginning of 2021. Countless digital images are being sold as NFTs on private websites such as “OpenSea”. However, Philip Sandner, a professor at the Frankfurt School of Finance and Management, is critical of the market. For him, these “small pictures” are status symbols, but they are not art – like a watch or a chain in reality.
Which NFTs will become valuable and which will not?
As Sandner says, just as prices and highs return to normal after booms in other markets, this will eventually be the case as well. “At some point I think it will turn out that some little pictures have value, just like an expensive watch; and that others may have little value. Like a plastic chain.”
Johanna Neuschwer and Anne Schwach, founders of the “Office Impart” gallery in Berlin, see things differently: “For some it’s a niche, but for some it’s also a love of digital art,” they say. Above all, they see advantages in NFTs and point out, for example, the so-called royalties. In a way, this is the license fee with which artists earn money with every NFT resale. Neuschäffer says this is new in this form in the art world. Other advantages: NFTs are transparent, trading and prices can be viewed at any time and cannot be falsified. All this can also be transferred to other markets.
But how do NFTs fit into the traditional art market? “Digital art will not replace painting, but will be taken for granted as a new medium. The art market will simply become more diverse,” say the founders.
In the music industry, too, NFTs have the potential to return quality to the music world, according to Eva Keltz of the Most Wanted: Music conference. Because with the advent of MP3 and so many streaming platforms, something has disappeared: exclusivity.
Today, any music file can be copied and transferred endlessly. Therefore, it is almost a public good. “It may be that this is no longer valid exclusively, that is, the music recording – will be replaced – at least in part – by a new distinction. This is made possible by the digital ownership that I can create via NFTs,” Kiltz explains.
Something for lovers and collectors
The music recording itself can still be copied and transmitted. However, an authorized individual piece has only one owner. “I imagine the future of the music industry will continue to consist of many different forms of use geared to the needs of different user groups: low-end, mass-compatible broadcasting like radio, and low NFT being more of a thing for fans and collectors like vinyl,” says Keltz.
There is still a look to communicate. Floris Henning and his company advise other companies on the topic of digitization. In his view, NFTs can make digital meetings more secure. Because NFT acts as a kind of access token for a digital space. Unlike the access token for popular communication platforms, it can’t be copied and distributed for free, Henning says.
Another advantage of NFT from his point of view: the traditional access token belonging to a particular communication platform is also associated with that platform. However, the custom NFT token can be used across platforms, he explains.
In general, there is another drawback that applies across industries and that both Henning and Sandner mentioned: Given the abundance of different projects, it is difficult to assess which NFTs have real value and potential and which are questionable and perhaps just rip-off. “There is the phenomenon of the Wild West, which means that the limits and rules of use are not quite right yet,” Henning says.