You can’t go a single day without hearing about NFTs. Non-fungible tokens. What are they? And why the hell would someone spend millions of dollars on something that no one seems to understand?
Which I can’t answer.
Enough people have asked about NFTs that I thought we should address it again. This time with the help of a music management company that embraces the idea of NFTs that they are not digital art.
Crown & Ace is a musician and event management company. It recently partnered with CurrencyWorks Inc and MusicFX to offer NFTs for fan club memberships.
First, a couple of definitions:
A blockchain is what you might think of when you think of a ledger. It is a digital record of transactions and property. Cryptocurrencies use their own blockchains to record who buys, sells, and owns their currency.
Bitcoin has its own blockchain, just like Ethereum, Bitcoin Cash, and Litecoin. By recording transactions on a blockchain, ownership cannot be debated.
NFT stands for non-fungible token. Non-expendable items have no inherent value. It is worth what the buyer thinks it is worth. A painting, autographed baseballs, and other collectible items are non-expendable items, while something like gold is expendable because it has an overall value set by an entity.
The “T” in NFT is simply the record, similar to an “authentication certificate” on a collectible or painting.
Crown & Ace and its MusicFX offerings are not necessarily digital content in the traditional sense. The company is selling a 12-month membership in country music artist Parker McCollum’s fan club that includes an NFT.
“The NFT can be anything from concert tickets to real music, artwork and album covers,” explains Cameron Chell, co-head of MusicFX. It’s like joining a regular fan club today, it’s just that the things you receive in this fan club can now become a real collectible.”
The Gold Chain Cowboy Club Black Card costs $100 and the company offered a limited edition membership that includes the NFT. Fans bought every one of the 1,000 available.
Once the 12-month membership expires, they can always sign up again for additional benefits, but there will always be only 100 NFT from the original Black Card.
“And presumably, since they are collectible, they will become more valuable over time,” Chell said. Artists, musicians, athletes, actors, and digital brands have already issued and sold their own NFTs. It seems like a fad right now, but as real life continues to move into the digital realm or the Metaverse, Chell thinks NFTs will be owned by everyone. They may just not know.
“Saying you’re never going to have an NFT is like saying, I’m never going to have an email address at the beginning of the internet,” he said. “We are already seeing it, but I predict that in 3 or 4 years every concert ticket will be an NFT.”
Chell said that the use of NFTs will reduce counterfeits and fake concert tickets that plague the concert industry and fans. He also brought up the idea that NFTs and blockchain could register car titles in the very near future.