Welcome back to part two of the State of Things in Music report. Last week we launched Part One, highlighting projects, trends, and processes that are occurring within the music3 space, as well as potential consequences and future considerations.
As we have seen in the last year, the music industry is undergoing a period of ongoing, ongoing innovation, with various communities being built around mutual trust in these revolutionary technologies and a shared belief in a future where artist, fan, and collector are slowly merging into one.
We are currently going through the process of building web3 (the new internet), which ultimately leads to ideological debates, especially regarding legacy music business structures. This so-called battle between innovative new approaches and more traditional legacy approaches is resulting in an unprecedented amount of innovation and ideas, making the music technology industry a very interesting market to watch.
Tools that improve user experience will have a big role to play in the coming years. The fact is that, since last year, more has been invested in NFT tools for artists than in the artists themselves. It highlights the fact that at this point in the adoption curve, these tools are extremely vital in helping the overall user experience and implementing the right tools will help further drive adoption.
They are necessary to remove different kinds of frictions that platform users face, and thus help improve accessibility and overall experience. Consequently, these tools will take different forms, such as helping users simplify more complicated tasks, such as introducing a fiat currency payment option with a credit card, and improving task complexity by allowing more customization and control. of the minting process, for example.
As popularity and adoption continue to grow, so does the number of new ideas, platforms, projects, and new users. In the foreseeable future, it is very likely that the further development of tools will push these processes further and, over time, make them more accessible and user-friendly for the general population.
It is certainly no secret that there are massive environmental concerns surrounding the CryptoArt industry. These concerns stem from the fact that most of the cryptocurrencies used to buy and sell NFTs are responsible for a substantial amount of carbon dioxide emissions.
All coins that work with the proof-of-work mechanism, such as Ethereum, rely heavily on computing power and energy to verify transactions, and thus become extremely unethical tools with respect to very relevant climate concerns. As a consequence of this development, there is a significant number of artists and creators who see the benefits of the CryptoArt world, but do not use or defend the technology simply because of their stance on the climate situation.
That brings us to an interesting situation, where the technology itself gives a lot of hope in terms of equality and redistribution of wealth within the music industry, while at the same time having the very costly downside of contributing to environmental pollution. Of course, it is impossible to predict the future turn of events, but it is nevertheless important to mention possible solutions to the problem that may materialize in the foreseeable future:
clearer distinction between tokens and cryptocurrencies is vital to fully assess the power usage in this case. While NFTs contribute to energy usage and also send reassuring signals to miners around the world, it must be stressed that the problem itself is rooted in cryptocurrencies and their operating mechanism, rather than token sales and purchases. .
As of now, NFTs still make up a relatively small proportion of cryptocurrency’s energy usage. What it tells us is that with certain solutions within the crypto world, digital collectibles technology has a chance to do some good without the unethical concerns that are definitely evident at the current time.
Proof of Stake vs Proof of Work is probably the biggest discussion going on in the cryptocurrency world regarding environmental concerns. The thing is, proof-of-stake offers an alternative, energy-efficient approach to validating transactions on the blockchain’s decentralized ledger.
It works by engaging or blocking a certain number of coins you own to validate transactions without relying heavily on computing power and energy. We have yet to see the effect of a proof-of-stake implementation on a network as large as Ethereum, but there is certainly hope of eliminating a substantial amount of energy waste. That in turn would alleviate some of the aforementioned environmental concerns.
Systematic problem of the lack of renewable energies is what it comes down to in the end. For example, if each artist invested a portion of the token sale profits in renewable energy projects and technologies, the carbon emissions of the entire CryptoArt industry would be fully offset. This scenario is very much in line with almost all existing environmental problems, that is, with the fact that the burden falls on the shoulders of individuals instead of governments and institutions.
In the same way that individual home energy use accounts for a small part of global environmental pollution compared to industrial and military energy waste, NFT sales and purchases can surely be viewed in a similar light.
To rephrase it, it is a notion that without a clearer definition systematic global policy making regarding climate change and the environment, we will not be able to fully transition to renewable energy sources, which would be a perfect solution to this (and many other) problems.
Simultaneously, in the absence of any substantive change in that regard, further growth in NFT sales, and especially low-cost, high-volume NFT sales, will surely bring detrimental effects to our environment.
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*All investment/financial opinions expressed by NFT Plazas come from the personal research and experience of our site moderators and are intended as educational material only. People are required to fully research any product before making any type of investment.
Music data strategist and music artist. One of the co-founders of the data analytics startup IMA, concerned with identifying trends and spreading awareness about the web3 transition in music.