Many artists and content creators are using blockchain to get paid for their work in a new way. Understanding the blockchain technology fundamentals is the key to monetization without a middleman.
The market for digital artwork is exploding. Not only are artists selling their work directly to the consumer and reaping the benefits, but this trend is also creating a secondary market as these consumers flip the art for a profit.
How is this possible when anyone can right-click-save a digital file? Blockchain and NFTs.
What Is Blockchain and How Does It Work?
A blockchain is a database that distributes information between different nodes in a computer network. Unlike a traditional database, which stores information in one place, a blockchain gathers information in groups. Each group, known as a “block,” holds a set of information up to a certain capacity. Once the block reaches its limit, the block closes and a new block opens to store the remaining data. As each block closes, it receives a timestamp and links to the previously closed block, forming a blockchain.
Because these blocks are linked together in chronological order within a decentralized network that all users control, the data stored on them is irreversible.
Blockchain Technology Fundamentals and Non-Fungible Tokens
When most people hear “blockchain,” they think of cryptocurrencies like Bitcoin and Ethereum. While cryptocurrency is the primary use for blockchain, it is far from the only application. Non-fungible tokens, or NFTs, use the technology to create one-of-a-kind digital assets. Because data on the blockchain is immutable, it allows users to create unique versions of infinitely replicable files, such as art, music, and other content.
How Creators Are Using Blockchain to Monetize Their Work
To understand how artists and content creators are taking advantage of blockchain, let’s look at an example. Many recording artists, specifically within the Hip Hop space, are unlocking the creator economy by turning their music into NFTs and selling them directly to the public. Why are they doing this rather than going through a traditional record company or streaming service?
The answer is—it’s more profitable for them to cut out these big companies.
Many people are surprised when they find out that lots of the artists they listened to growing up are far from wealthy. We’ve spoken to many such artists who are considered icons today, and in our conversations, we have found that making money from your music when you only get a small cut is extremely difficult.
That’s why understanding the blockchain technology fundamentals is so essential for today’s artists. If you want to monetize your art in a profitable way, you need to go straight to the people. Now that up-and-coming and established creators have built their audiences through platforms like Facebook and Instagram without the marketing and promotion that used to be required, they have direct access to their listeners. Blockchain and decentralization allow them to take this Rolodex of fans, so to speak, and sell directly to them off these big platforms.
Take what Tory Lanez did. When he dropped an NFT album and sold copies for a dollar per download, it sold out in a minute. Which would you rather have—a million dollars or $4000 for a million streams on Spotify?