The cryptocurrency culture wars: what are NFTs, and can they save rock music?

Kings of Leon have released their new album When You See Yourself as a Non-Fungible Token (NFT)
Kings of Leon have released their new album When You See Yourself as a Non-Fungible Token (NFT)

On Friday, Kings of Leon released their eighth album, When You See Yourself, in all the usual places: Spotify, iTunes, your local record shop and the band’s own store. But in a world-first, it is also available to buy as a Non-Fungible Token (NFT) via dedicated online marketplace OpenSea for as low as £40.

I know what you’re thinking. What?

NFTs are unique digital assets, bought and traded securely through a digital ledger called a blockchain. NFTs can be anything from visual art and audio to digital trading cards, and can also include real-life perks. They’ve been around since 2017, but have only really started taking off in the past year – thanks in part to a planet full of creative workers stuck at home, looking for new ways to pay the bills alongside the rise of cryptocurrency and the growing discourse around the true value of art and how much artists are actually getting paid for their work.

It’s a blossoming marketplace. The NFT Reddit currently has 23,000 members and the front page is full of first-time sellers. Auction house Christie’s is currently accepting cryptocurrency bids on an NFT from digital artist Beeple, while pop star Grimes recently sold $5.8 million worth of digital art as NFTs and musician Charli XCX is following suit with four pieces based around Spinning, her new collaboration with The 1975 and No Rome. You can even get a Banksy NFT. Think of them as an autographed MP3, the digital equivalent of a limited-edition poster or a work of fine art. They are, essentially, a digital collectible.

NFTs typically come with a license that allows the buyer to use them for bragging rights, displaying them across social media, on digital screens at home or in game worlds like Fortnite. Artists generally maintain all intellectual and creative rights to the works. In the same way you can’t download a movie and start selling copies of it down the pub or upload it to YouTube, you can’t reproduce NFTs. Only your morals can stop you screenshotting a piece of static digital art, however.

Pop star Grimes recently sold $5.8 million worth of digital art as NFTs - Zak Kaczmarek/WireImage
Pop star Grimes recently sold $5.8 million worth of digital art as NFTs - Zak Kaczmarek/WireImage

The Kings of Leon offering, released in conjunction with specialist NFT company YellowHeart under the NFT Yourself title, is a good introduction to what these tokens can offer. As Josh Katz, YellowHeart’s founder and CEO tells me via Zoom, “this is artistic expression through digital media”.

In a statement, Kings of Leon explained that “it’s been hard to find something that feels cool and right for us. This does. The conversation around NFTs makes it feel like a wild futuristic concept.

“We deprioritised some of those more traditional album release concepts – to take a risk, stick our necks out, maybe take some heat… This is adding the value back to music that has been lost. This is the beginning of giving fans a way to own music again, love whole albums, and have things to interact with while listening over and over again while sitting on their bedroom floor. The experience, we hope, gets us back to appreciating and valuing music the way we used to.”

The Kings of Leon NFTs are being sold via OpenSea, which is “the eBay of digital collectables,” according to Katz. You will need a cryptowallet loaded with the correct currency to bid or buy on anything, but it’s meant to be a pretty straightforward process. If this is all new to you, YellowHeart will direct you to an 11-minute video explaining how to download MetaMask (a browser extension that also acts as a wallet for your cryptocurrency), how to buy the necessary cryptocurrency and then how to link your wallet to your OpenSea account. “We want to make NFTs as accessible as we can for people, and hopefully using OpenSea will move them into that world,” says Katz.

I had a go at buying an NFT for myself. Setting up an OpenSea account is similar to setting up any online account, but it starts to get messy when you buy the cryptocurrency Ether. You have to load your wallet with this crypto before taking part – similar to buying tokens at a funfair, then hoping you’re going to be there long enough to use them all. While the Kings of Leon offering seems to be aimed at fans, a lot of NFTs are bought to be resold at a later date for a profit. Exclusivity is king.

Kings of Leon and Yellowheart are offering digital art (moving images of their iconic Cherry logo), only available to buy during the initial 56-hour period, for between £70 and £1,800. Like all NFTs, the price fluctuates depending on demand similar to the stock market, as does the exchange rate for Ether. There’s also an album bundle that includes a vinyl copy of When You See Yourself benefiting Live Nation’s Crew Nation charity, currently going for 0.035 Ether, and an extreme Golden Ticket package that includes one-off blockchain artwork alongside a lifetime supply of front-row tickets (four per tour) merch and meet & greets.

Eighteen Golden Tickets have been minted. Currently, the cheapest one of these packages is going for 7.7 Ether (about £9,400) while the most expensive is about £110,000. Ideally, Katz would like to see these bought by companies and then used to raise money for charity, but it doesn’t look like there’s any way to stop me buying a Golden Ticket, then flogging the gig experiences to eventually make a profit.

The Kings of Leon album has been released in conjunction with specialist NFT company YellowHeart
The Kings of Leon album has been released in conjunction with specialist NFT company YellowHeart

I went for the cheapest option, the album bundle. I clicked Buy Now and brought the necessary 0.035 Ether through MoonPay, who handle OpenSea’s payments. The Ether cost a little over £40 plus a processing fee (£3.99) and a network fee (£1.85), though at first this transaction did cause my credit card to throw up a fraud alert. Then there’s a little wait while your crypto is delivered and, despite originally clicking Buy Now, you then need to go back to the NFT and checkout again. Turns out there’s a fluctuating “gas fee” that isn’t mentioned until now, and I find myself 0.034 Ether short.

By the time I’ve brought enough crypto and paid all the fees, this NFT has cost me over £80. Twenty-four hours later, it would cost me over £120. My local record store would have sold me a limited-edition vinyl and postcard set for £25. As for the charity aspect, I’m not sure what percentage of that £80 counts as “all proceeds”, considering a bulk of it was fees. Looking online, I’m not the only one put out by the high cost of taking part in this relatively new technology.

YellowHeart was founded in 2017 as a blockchain ticketing platform with the mission to “create a symbiotic relationship between fans and artists.” Instead of seeing NFTs just as digital art, YellowHeart wants to also use them as tickets, removing the risk of fraud and making it impossible to tout. After the gig, the ticket would become a collectible – an e-version of pinning the ticket stub to your bedroom wall.

Then Covid-19 hit and nobody needed a live ticketing platform. (It’ll be launching soon, though.) After seeing the rise of NFT marketplaces across Asia and used by underground artists with a strong online following, as well as encouraging movements elsewhere in music, such as the resurgence of vinyl and the success of artist-supporting innovations such as Spotify’s tip button, YellowHeart started building a platform that’ll enable artists to mint and sell their own NFTs.

Katz says it’ll be released in a couple of weeks, after a few more drops like their collaboration with Kings of Leon, and will take “very low fees compared to what creators are used to paying. We let artists do their art and we get out of the way. All we are is a mechanism that allows them to sell directly to their fans. I think it’s going to enable creators to make money again.” After YellowHeart announced their collaboration with Kings of Leon, the amount of people searching for ‘NFT’ doubled, according to Google Trends. By Saturday afternoon, they’d made over £340,000 in sales.

Is this the future? Grimes created a piece of NFT video art titled Earth
Is this the future? Grimes created a piece of NFT video art titled Earth

Katz agrees there’s not much difference between YellowHeart and direct-to-fan services such as Bandcamp or Patreon; it’s just a different product being sold. He also isn’t concerned about being the next big thing. “I’m providing a service. And if the artists want to use it, it’s there for them.” Rather than looking to replace streaming services, YellowHeart and NFTs “give the artist a digital expression and the opportunity to give their fans more than they have in the past. This is a freedom-of-expression act and this is a creator revolution.” It’s very much aimed at the die-hard fan, though.

Linkin Park’s Mike Shinoda became the first major artist to launch a single as an NFT last month, when he auctioned 10 pieces of artwork alongside a 75-second clip of the track Happy Endings (featuring Iann Dior and UPSAHL) via the Zora platform. “What musicians are so used to is, ‘everyone’s songs are worth X amount on this platform,’ a price in part dictated by the intermediary (for example, a digital service provider like Spotify),” he explains via email.

“I love the ease of accessing music on Spotify, but I also feel that not every release by every artist is equal. In fashion or in gallery art, the price of a piece varies based on what the creator and fan converge on. It seems that music is ready to explore this type of relationship.”

Despite the never-ending discovery that streaming has given music fans, Katz argues that “music has been super devalued over the last two decades. I just want to see creators step up, have the freedom to create and be paid fairly.” Removing the middlemen of DSP is “what decentralisation does, and it’s what blockchain is all about. We’re all going to get used to practices like having transparency, having fair trade, having accountability, not being able to cheat or commit fraud. All of these things are going to become normal in our lives again, and people will see what was missing.”

Rather than resistance from established companies, Katz believes they’ll embrace it. “It’s the new world and it’s going to happen quickly. Everyone’s so used to using this digital world and YellowHeart is just going to allow the masses to move into this tech very quickly. Adoption will be fast.”

In the future, he reckons NFTs will just be part of the package. An album will be released on streaming services, in stores and through YellowHeart, though there’s no word yet as to whether NFTs will count towards chart positions. He’s been having conversations with plenty of artists and “telling them to dream your biggest dream on what you want to give your fans. Ask yourself what your fans want and let's give it to them.”

“Right now, there’s a lot of hype and activity surrounding the big-money releases. I think Beeple and Nyan Cat [a remastered version of the meme that sold for $590,000 last month] 100 per cent deserve the attention they’re getting. But a new lane of affordable, collectible items are really where it gets interesting,” explains Shinoda.

Linkin Park’s Mike Shinoda became the first major artist to launch a single as an NFT last month - Guy Prives/Getty 
Linkin Park’s Mike Shinoda became the first major artist to launch a single as an NFT last month - Guy Prives/Getty

As with anything that thrives on exclusivity, most NFTs are quite pricey, but “once a kid can buy something cool for $50 and display it on both their Roblox and Minecraft avatar in an owners-only kind of way, that’s where it gets really exciting,” Shinoda continues. As a visual artist as well as a musician, he knows there are a lot of different media avenues to explore that’ll hopefully put the “fun” into Non-Fungible Tokens.

When live music comes back, there’s no reason fans can’t pre-order an album, get early access to gig tickets and then buy merch at the shows, all through NFT platforms and all controlled by the artist. “To have a yellow heart is to have a heart of gold, and it’s to care about others and be compassionate,” Katz says. “In 2017, I thought the ticketing industry could really use that. Now I really hope YellowHeart means fair trade for artists and fans.”

NFTs aren’t without their issues though. Grimes turned one piece of her digital art into 303 NFTs, which created 70 tonnes of CO2 emissions. “It really is a problem,” admits Katz. Though he doesn’t currently have a solution, “we do have a set of engineers dedicated to that right now.” Currently their platform uses Ethereum, a cryptocurrency that in 2018 used as much electricity as Iceland. “It’s something that we’re super-aware of and we’re looking at closely,” but it’s an industry-wide problem that’s yet to be tackled.

There’s also the twisted web of music ownership. Shinoda believes “the value of art is at the crossroads between what the artist thinks it’s worth, and what the fans think it’s worth. But music is a more complex puzzle.” He once had dinner with Len Blavatnik, the fourth wealthiest man in Britain, who told Shinoda that one of the reasons he bought Warner Music in 2011 for $3.3 billion was because he wanted to solve some of the technological problems of infrastructure and payment systems.

“I think,” Shinoda says, “he was talking about the fact that the royalties systems are so complex and convoluted. He said he spent millions on the issue and hadn’t found a way to crack it. Maybe it’s a system that works as well as it’s going to work.

“Certainly, the most basic NFT, where there’s only a creator and fan, is simple. But the music that people are listening to is created by a small army of five writers, three performers, a record label, publisher, and management team who are all supposed to receive a share of the song – even without DSPs involved. That’s going to be inherently more difficult to decide participation on, if we’re talking about an NFT.”