Tuesday, Apr 5, 2022 • 29min
NFT & Blockchain
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Have you ever heard of an NFT? Of course you have, everyone seems to be talking about them lately… but what actually is an NFT? More importantly, what good are they to songwriters, performers, and creators? What could NFTs mean for the future of music production, distribution, and monetization? Thankfully for us all, we don’t have to ask ourselves these questions any longer. Join us on this NFT and Blockchain episode of “The Mix”, as Cari and Silvia ask Stella every question you’ve ever wanted answered on the subject. From UI’s to blockchains, to why it should matter to you.
The Mix is a Musixmatch Pro podcast.
All music content for this episode was composed and produced by Pierfrancesco Melucci.
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Talking about
Speakers
(3)
Stella Tavella
Cari Quoyeser
Silvia Olivieri
Transcript
Verified
Silvia Olivieri
00:00
So, what would be the process for an artist who wants to start selling the
NFT?
What would they do? What would they need to do? What are the steps?Share
Cari Quoyeser
00:08
Hello and welcome. You're listening to The Mix, a
Musixmatch
podcast hosted by yours, truly Cari Quoyeser
, in Artist Community and Services.Share
Silvia Olivieri
00:19
Silvia Olivieri, in Publishing.
Share
Stella Tavella
00:22
And Stella Tavella in
AI.
Share
Cari Quoyeser
00:24
Here to bring you the scoop on what's new in music innovation to help you navigate the modern music industry. Enjoy.
Share
Silvia Olivieri
00:34
Welcome to The Mix. We are sure you have heard the buzz around
NFTs
, but do you understand them? In today's episode, we will go step by step. First, explaining some of the hard words we keep hearing around the subject, such as fungible, non-fungible, Blockchain
, and Decentralized Web
.Share
00:52
We'll then try to understand how the music industry is adapting to this new world, and explore some of the ways artist's benefit from this new, exciting technology. You want to know more? Then stay tuned for The Mix.
Share
Stella Tavella
01:10
Hello ladies.
Share
Silvia Olivieri
01:11
Hello!
Share
Stella Tavella
01:14
Welcome to the
Metaverse
.Share
Silvia Olivieri
01:15
Oh, wow.
Share
Stella Tavella
01:17
Can we say this?
Share
Cari Quoyeser
01:20
We can say
Metaverse
, yeah.Share
Silvia Olivieri
01:22
Okay.
Share
Stella Tavella
01:23
Yeah. So today, I will talk a little bit about
NFTs
. Have you heard of it?Share
Silvia Olivieri
01:30
Yes.
Share
Cari Quoyeser
01:31
Yes. It's been kind of a scary subject for me. I can tell people are getting really excited about it, but I've really been honestly trying to learn about it by myself for a while and every time someone explains it to me, I'm like, okay, so what?
Share
Silvia Olivieri
01:51
Yeah. So the real question is "Have you heard of them?" And "Have you understood them?" Because that's another-
Share
Stella Tavella
01:58
Yes, the internet is exploding with all these concepts. I'll try to give you a little bit of a introduction of keywords and key concepts to elaborate on that. Maybe.
Share
02:13
So, an
NFT
is a Non-fungible Token. Maybe I should start from the concept of what a fungible token is.Share
Cari Quoyeser
02:22
Yeah. Has anyone ever heard the word fungible before? It's a really funny word to me
Share
Silvia Olivieri
02:29
It's not in my vocabulary.
Share
Cari Quoyeser
02:30
What would a fungible token be?
Share
Stella Tavella
02:33
So, the fungible token is a coin just like the Euro and Dollar and also a
Bitcoin
is a fungible token. Which is some assets that has always the same value. So, if I exchange one Euro with you and you give me back one Euro, we still have one Euro in value.Share
Cari Quoyeser
02:53
Right, fungible.
Share
Silvia Olivieri
02:55
Or effectively like, two, like two fifty cents. Still going to be one Euro.
Share
Stella Tavella
03:01
Yeah, yeah, it's yeah exactly. It's the same. It's the same.
Share
03:05
So a non-fungible token has some value that changes depending on the data and information that are stored in the
NFT
, right? So it could be an image, usually is an image or an audio file, a video, a piece of art, everything that's digital okay? Okay, so this NFT
, basically runs on a Blockchain
. So a Blockchain
, imagine it of.Share
Silvia Olivieri
03:37
Here we go, dropping the bomb.
Share
Cari Quoyeser
03:41
It's one of those words that float around and I nod my head at it. But what is a
Blockchain
?Share
Stella Tavella
03:47
So a
Blockchain
is simply a network of computers and it is basically a decentralized ledger. So it is, okay, let's set aside the what the centralized for a moment.Share
04:06
So a ledger is basically you can think of it as a piece of paper, digital paper in which you can record all transactions that have been made in the network. So, if I give one
Bitcoin
to Silvia, it is recorded, everything is recorded on the ledger. So my account is giving one Bitcoin
to Silvia's account.Share
Silvia Olivieri
04:31
It's like a document.
Share
Stella Tavella
04:33
Yes, it's a record of all transactions and activity-
Share
Cari Quoyeser
04:37
Is the transactions by the purchaser, or is this collective transactions by the marketplace?
Share
Stella Tavella
04:45
So the marketplace is just this website in which through a
UI
you can connect the Blockchain
and execute all kinds of transactions and actions. So even the NFT
creation is a transaction actually.Share
05:05
And when I sell my
NFT
, so when someone buys it, this is also a transaction and it's recorded.Share
Cari Quoyeser
05:12
So essentially the
NFT
is the transaction and it's stored the data from the NFT
is stored on the Blockchain
, and the Blockchain
is just the recording of all the transactions.Share
Stella Tavella
05:23
So yeah the the
Blockchain
is the recording of all the transactions. So NFTs
are created through Smart Contracts
.Share
05:30
A
Smart Contract
is just a program, a piece of code that is stored on the Blockchain
and runs every time you make an action on these NFT
. So the the the code is stored on the Blockchain
, together with the record of all the transactions.Share
05:50
The content of the
NFT
is actually not on the Blockchain
and it's stored somewhere else. So for example, if I buy an NFT
, which is for example the giant bag of an image, all the metadata and the image itself is stored somewhere else. So it's not stored on the Blockchain
as of now from the Smart Contract
, you can recover the image that's stored somewhere else in this, think of it of decentralized Google Drive, okay? And I can recover it anytime I want in theory.Share
Silvia Olivieri
06:36
I wish I could see our faces like Cari's and mine because we're like uh-huh? Uh-huh?
Share
Cari Quoyeser
06:43
Can we pause for a second just to talk about the advantages of having something decentralized or having something on the
Blockchain
or actually using an NFT
in general. So this is a lot of background information which is super helpful because this is all new certainly to me, but what is the advantage of putting something like with a Smart Contract?
Are Smart Contracts
secure?Share
Stella Tavella
07:10
Okay, so there are a lot of advantages in using a
Blockchain
, not just for NFT
but for a number of other things. So Blockchain
is a way of creating trust between different entities on the web. Right now, if I want to send some money to a stranger online,Share
Silvia Olivieri
07:30
Or random people?
Share
Stella Tavella
07:34
Why do you laugh? You want to send money to random people?
Share
07:38
Okay, so if I want to send some money to random people online for any type of reason, right now, it's more secure for me to go through a bank right? Before the
Blockchain
, you would send some money through the bank. So the bank is the middle person in between. That's actually ensuring me that that person really exists, that I can send some money safely. And it also ensures the other person that I have the money to send to them. So it's not like fake money or something.Share
08:21
So the the
Blockchain
saw is a way to create some trust without the need to have a middle person in between, okay. And also its decentralized structure means, that there is no owner of the entire process. So the bank hones all my metadata, all my money, if I need to do some transaction, I need to go to them and ask them, can I make money transfer? Can I get back some of my money and stuff like that.Share
Silvia Olivieri
08:56
So in that case, the bank would be a centralized.
Share
Stella Tavella
09:01
Yes, the bank is centralized entity.
Share
Silvia Olivieri
09:05
Entities. Because everything is in their hands basically, and with the
Blockchain
there's not just one entity that owns all the data.Share
Stella Tavella
09:15
Exactly, yes. And also what happens if someone hacks the bank and steals all my money? I mean this can happen if they steal your data from, I don't know, some social media or something like that because also social networks and all this kind of company are of course centralized. It means that all the data in their possession are in their private servers and you're not in control of your data.
Share
Cari Quoyeser
09:46
So in this case if we're relating it to the music industry, the bank being, you know, if we're thinking of like tangible, fungible money going through an agency that we know and trust like a company, like a bank. If we apply this to the music industry, it would be like, what is, what is that term? Web?
Web3
?Share
Stella Tavella
10:07
Web3
, yes, Web3
.Share
Cari Quoyeser
10:09
So any sort of entity, like a social media or a streaming service that you put your music through? That would be the middleman in this sort of situation. So you're cutting out that person, correct?
Share
10:19
And then you get to maintain all of your, they don't you don't give any of your own personal data. So it's a, it's a secure I guess more private way of doing music?
Share
Stella Tavella
10:29
Yes.
Share
Cari Quoyeser
10:29
Of doing your business?
Share
Stella Tavella
10:30
Yes. Also because for example when you create your
Crypto Wallet
, the only has to say so if you want to pay Silvia some money for example, I would only need a wallet address and I don't even need to know Silvia's name or surname or anything. I just need the wallet address which is this Alpha Numerical Long String. And this is also the reason why it's really private and secure.Share
Cari Quoyeser
11:05
That's that's a whole new subject as well.
Cryptocurrencies
. Is that is that usually what people use?Share
Stella Tavella
11:11
Yeah. To, so, to buy
NFTs
. You need Cryptocurrencies
.Share
Cari Quoyeser
11:16
And do they have a certain market value? Like, do you use a certain crypto over another. Are they worth different amounts?
Share
Stella Tavella
11:22
Yeah. Yes. So depending on the
Blockchain
you are buying or doing your activity on that exists a different currency.Share
Cari Quoyeser
11:35
Okay.
Share
Stella Tavella
11:35
That's that has a different value compared for example with the Dollar.
Share
Cari Quoyeser
11:40
Is it a fair assumption that I'm creating? Like if I can think in my mind just metaphorically that these different
Cryptocurrencies
are these different Blockchains
are like different countries therefore different currencies? If I can just think of it that way like. Yeah, so you place them in different places and they don't equate the same and they may vary in worth.Share
Stella Tavella
12:04
Yeah. Yeah you can think of it like that but the variation. So the fluctuation of
Cryptocurrencies
with respect to the Dollar or the Euro for example, is like very volatile. It means that it can change literally every second. Exactly. It's not yeah, it's not like fixed.Share
Cari Quoyeser
12:28
Okay.
Share
Silvia Olivieri
12:31
So what would be the process for an artist who wants to start selling their
NFT
? What would they do? What would they need to do? What are the steps?Share
Cari Quoyeser
12:40
Where would they go as well?
Share
Stella Tavella
12:42
Okay, so there are if you want to do it by yourself. So a lot of artists and are doing this by themselves just going on, I don't know, Catalog. works, which is a marketplace for music specifically or I don't know, maybe on one of the biggest one is
OpenSea
, in which you can find literally everything. They need to have a wallet and there are some ways you can connect your Crypto Wallet
to the browser.Share
13:15
So think of the marketplace as a
UI
in which-Share
Cari Quoyeser
13:19
What's a
UI
?Share
Stella Tavella
13:23
User Interface
.Share
Silvia Olivieri
13:26
That's-
Share
Cari Quoyeser
13:26
No questions are dumb questions here.
Share
Silvia Olivieri
13:30
Yes please, because that's the level we are.
Share
Stella Tavella
13:33
So, the marketplace is just the
User Interface
that lets you connect to the Blockchain
in an easy way. So you would go there, do the login with your wallet and literally upload your music, your audio to the interface, add some data and that's it, it's ready to go.Share
14:00
But yeah, it's a little bit more complex than that because depending on the
Blockchain
you are using. You are also in some cases paying some little money to, just for uploading and creating your NFT
.Share
Silvia Olivieri
14:16
Like a sort of fee to the marketplace?
Share
Stella Tavella
14:19
Exactly. It is not a fee to the marketplace itself it is a gas fee.
Share
Silvia Olivieri
14:25
Gas fee?
Share
Stella Tavella
14:28
It's the gas fee. So yes to the, the thing is that for updating the ledger of the
Blockchain
this requires a lot of computational power, a lot of computers all around the world like working a lot to make this happen. And-Share
Silvia Olivieri
14:50
I think this is something that we definitely want to discuss maybe later, like yeah environmental impacts of
Blockchains
, NFT
and all this. Okay, okay.Share
Cari Quoyeser
15:01
I'm just kind of marveling that this is happening everywhere right now, and that it seems all of a sudden I'm sure it's been building for a while but like, I don't know, I have so many questions like first of all, what benefit does the purchaser get from, like what incentive do they have to buy
NFT
instead of going through all these services that are already established?Share
Stella Tavella
15:25
Okay. To me, there is a double benefit in doing so. So, if your favorite artist publishes an
NFT
. You are directly paying and supporting the artists that created that piece without going through other streaming services. And then like without, we cutting with the-Share
Silvia Olivieri
15:50
Direct money to the artist is supposed to directly.
Share
Stella Tavella
15:54
It's direct money. Exactly. And so since the
NFT
is thought as an unique asset, you would have a contract, stating that you and only you are the owner of that piece of art. And this increases the value of the purchase, right?Share
Cari Quoyeser
16:17
So you can resell it?
Share
Stella Tavella
16:18
Exactly if you want you can resell it.
Share
Cari Quoyeser
16:21
Or like pull it out at parties and brag to your friends that you own something.
Share
Silvia Olivieri
16:24
Yeah I think that's part of the old points. Like, if you're a collector you own something that no one else has. And it's like it's like, I don't know, a signed record by-
Share
Cari Quoyeser
16:38
That is so it's so strange to me it's hard for me to imagine like just our world transferring into this digital space in this way.
Share
Silvia Olivieri
16:49
Yeah. It is kind of weird. I think the concept as it is is quite easy. I think our, our problem is that we need to apply to the digital world and that's where it gets complicated. And obviously we don't have the knowledge that Stella has. I don't know these terms. So we're still wrapping our heads around.
Share
17:09
And I was reading something very interesting actually that there are some like established artists there offering
NFT
that are sort of mixed between a digital asset and also real life. So if you buy an NFT
then, connected to that you also have some real life experience. Like you have a ticket a free ticket to our concerts for the rest of our lives.Share
Cari Quoyeser
17:33
What?
Share
Silvia Olivieri
17:35
Yeah. I think
Kings Of Leon
was doing something like that. I think it's really interesting because obviously something so new and kind of disruptive for the industry, for the relationship between artists and fan that obviously you need to help people to understand to make this transition, transition yes., from the real world and the digital world.Share
Cari Quoyeser
17:58
Yeah.
Share
Silvia Olivieri
17:59
So it's really interesting to have this, like, mixed situation.
Share
Cari Quoyeser
18:03
I was saying to you guys yesterday when we were just chatting about this, that when I when I was listening to this interview on Time, of the DJ Aoki, how do you say his name?
Share
Stella Tavella
18:13
Aoki?
Share
Cari Quoyeser
18:14
Okay. Yeah. So he was referring to live concerts as IRL concerts and he kept talking about IRL as opposed to this, which really bothered me because it's like when you think of the word nonfiction to refer to like real stories, I think that's like part of the nervousness is like, wait, are we leaving reality now is reality? Like the past and now we're going into the
Metaverse
and that's that's the now and the future and that's where we'll be operating and-Share
Silvia Olivieri
18:47
I mean, reality is not that great so, I'm joking. Yeah. But it is weird, yeah.
Share
Cari Quoyeser
18:58
Yeah. It's strange but what I'm getting from this conversation is like, it's kind of scary when you don't understand, but the more you understand it, and you start seeing it, like how you can apply it, it gets really exciting. So for an artist, I don't know how developed the infrastructure is for like you know emerging artists, maybe people that are not huge like
Kings Of Leon
, but I can see that in the future.Share
19:25
Like, is there a way for emerging artists to really make like, a living income on
NFTs
right now, is that possible?Share
Stella Tavella
19:34
So I've seen some, I will I'll introduce another concept which is the concept of for
Decentralized Autonomous Organizations
.Share
Cari Quoyeser
19:43
Decentralized?
Share
Stella Tavella
19:44
Autonomous organization.
Share
Cari Quoyeser
19:46
Autonomous organization. Okay, okay.
Share
Stella Tavella
19:49
So in simple words, this is just a community of people in which each member as the right to vote on proposals, changes, changes and they can contribute to making decision over the community activities. So, it's like a company that has all of its employees in the board of direction. Imagine it like this.
Share
20:17
So yeah, it's really an interesting concept. Yes, so for example, I'm speaking of Sound. xyz, which is one of the famous and the first ones that are emerging now. So they directly connecting the artists with their fans. Okay, so there is a form, if you want to participate to the community actively, you can join the discord and you can like, really actively participating to the decisions.
Share
20:51
But also there is a form for artists to send their music so that the community can discuss about releasing it and selling it as
NFT
and also they are developing some other like Silvia was saying some other things to like connect to a different tokens and NFTs
. They're selling like, exclusive listening parties.Share
21:19
The possibility to leave a comment and attach that comment metadata to that song forever, so that maybe you can be like famous because you were the first one like commenting that song and other interesting things. So yeah there is the possibility to do that and actually the Sound. xyz It's becoming really like the how to say the main channel for for that, for this kind of experiment in music.
Share
Silvia Olivieri
21:56
If I understood it right if you're an established artist obviously it's easier for you to sell
NFT
because everyone knows you and you have a big fan base, and if I, in that case a fan we'll be happy to buy your NFT
because it's more like a collection thing. It's something that they only own, while for established, for non-established artists upcoming artists. This community works more like investors.Share
22:24
So I believe in your talent. I believe that eventually this
NFT
will actually become a collection, yeah, object. Think digital thing, digital piece. So I'm investing now for the future. Once I get my invest investment back. Whoa.Share
Stella Tavella
22:41
It's really interesting and also there are some other platforms very interesting also for you Silvia in which fans or investors let's say let's call them fans investors, they can buy some shares of the song in terms of royalties and they actually can earn some money back.
Share
Cari Quoyeser
23:02
That's crazy.
Share
Silvia Olivieri
23:03
Yeah. So the better the music performs, the more money they get.
Share
Cari Quoyeser
23:08
Okay, so this is interesting in terms of investment on royalties then for the purchaser. But that does lead me to another question for you Silvia. So coming from a musician, musicians are quite protective of their creative works when you're selling in
NFT
, and there's the option to resell it for the purchasers to get a percentage. Does that mean you're also selling them a percentage of your copyright? Is that is that how that works?Share
Silvia Olivieri
23:32
Not really. So let's say you buy a Picasso for your collection, you will be the owner of that Picasso of the physical painting. But Picasso owns the intellectual property of it because he is the person who created that painting. Same for an
NFT
, the person who created the NFT
has the intellectual property and you are simply the one who possesses the digital art.Share
23:57
Now to connect to what Stella was saying, buyers who own the
NFTs
can essentially have a cut of the royalties if the artist agrees obviously. But that would simply be a share of the revenue and not on the intellectual property. Now this is the simple answer and obviously there is more that needs to be tackled and there is more than we need to understand when it comes to this new technology, for example, what's the status of Smart Contracts
now?Share
Stella Tavella
24:22
To be honest, I'm not aware if there is, as far as I know, there is no like official protocol for
Smart Contracts
that says that manages the royalties and the copyright. So each marketplace can at the moment each marketplace is like playing with it a little bit in the sense that for example, on OpenSea
. So if you are the owner of a piece of an NFT and that NFT gets reselled multiple times, every time it gets reselled, the original owner gets, gets a little percent.Share
Silvia Olivieri
25:04
I would say in terms of royalties then and copyright, all these
Smart Contracts
. I think everything is still so new that it's, it's hard to have an answer right now and it's I think it's gonna be really interesting to see where this is going to go, how the industry, not only the industry, everything is going to adopt this. As you said, the Smart Contracts
, they still not have a real legal value. So the short answer is we will see.Share
Stella Tavella
25:33
Exactly. And Cari, what's your perspective, I mean from the perspective of your colleagues and friends, musicians and writers was the discussion about this all these
Web3
and-Share
Cari Quoyeser
25:48
I think it's overwhelming at first if you don't come from a background of tech or you're not necessarily tech savvy, but the idea of being able to get paid the total amount for your music and like just that concept in itself, it's so disruptive to the whole industry as we know it.
Share
26:07
So because it's something we don't know, it's scary, but that's very exciting. Especially because artists have always struggled to make a living with their music even if it's doing well. So I think it is caused to be exciting. And I also want to say that like if there are no legal boundaries developed yet now is the time to really get into it and learn about it. Like it's it's okay.
Share
26:31
At least I'm telling myself that it's okay that up until this point, I haven't known what's going on. Because with this knowledge, I think that, I don't know, I think it could be a really great thing for art in general.
Share
Silvia Olivieri
26:43
And because we mentioned it earlier, what's the issue with the environment,
Blockchain
and environment?Share
Cari Quoyeser
26:50
Yeah, obviously this is not, IRL, if it is non-fungible, then how it's affecting the IRL?
Share
Stella Tavella
26:59
So in IRL, everything related to
Blockchain
is really super cool. But yeah, there is still some little problems in terms of energy-Share
Cari Quoyeser
27:11
Servers, right?
Share
Stella Tavella
27:12
Yeah, there are servers processing stuff all the time, and so but there are already some types of
Blockchain
that have developed different methods for updating data on this ledger. So they're testing it, some of them are already like used and integrated perfectly into the marketplaces so this issue is going to be solved.Share
Silvia Olivieri
27:40
Okay. Yes because I was reading that like
Ethereum
works in a proof of work methods. I don't know still if you know anything about it.Share
Stella Tavella
27:50
Exactly yeah. Yeah so this proof of work is exactly this so a bunch of computers processing stuff but I don't know exactly when, but it is scheduled for the
Ethereum
protocol to switch to Proof Of Stake
which is another method and it should be less consuming and should lower the gas fees.Share
Cari Quoyeser
28:17
Awesome. Well I feel like I learned a lot.
Share
Silvia Olivieri
28:19
Yeah my brain is burning a little.
Share
Cari Quoyeser
28:22
Thank you Stella.
Share
Silvia Olivieri
28:24
Thank you.
Share
Stella Tavella
28:25
Thank you. So I found this amazing tweet on Twitter that's explaining a little bit. All the stuff go for a nice metaphor so it goes "If you're a millennial struggling to understand crypto, just recall Harry Potter from your intellectually impoverished childhood. The houses are
DAOs,
the points are tokens, the magic is the Blockchain
. So choose your DAO,
learn some spells, get some tokens. See you in the Metaverse
bye." Thank you girls.Share
Silvia Olivieri
29:02
Thank you.
Share
Cari Quoyeser
29:03
Thank you so much. Bye.
Share
Silvia Olivieri
29:05
See you next time. Ciao
Share
Cari Quoyeser
29:07
See you. Ciao
Share
29:08
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