Non-Fungible Tokens

To start with, we should separate NFT technology from usage. Recently, NFTs have been promoted as mechanisms for investment, which led to widespread speculation and a market crash. The technology that allows an NFT to virtually represent an asset, imparts no value to the asset. Sadly, when NFTs were introduced their novelty hid the fact that an asset without true value could still drive NFT prices. To have credibility, an NFT must be linked to an asset with inherent value, not speculative value. If that is done, the technology of an NFT offers great promise, especially in applications that provide a unique service, such as Play on Demand.

In blockchain terminology, a Non-Fungible Token is used to designate a data transaction for a unique entity. In simple terms, unlike a cryptocurrency coin, each of which is essentially the same as another, though stored on the block chain similarly, each NFT is unique. It’s like the difference between a 20 dollar bill and a movie ticket. Leveraging Ethereum derived technology, NFTs have been used to represent art, domain names, digital collectables and soon, Play on Demand licenses, which we call NFT integrated Play on Demand, or NFTiPoDs (pronounced Nifty Pods). Since the blockchain that stores an NFT record is decentralized, transaction history and token metadata are publicly verifiable, so it is easy to prove ownership but difficult to manipulate or steal ownership.

As opposed to each streaming service provider, music aggregator, retailer, recording company, etc. having to implement its own validity confirmation and NFTiPoD creation mechanism, duplicating effort and expense, the Fair Trade Music Distribution Group will provide a common applications programming interface, along with the required processing power necessary to do so. In addition, FTMDG will harmonize between the different music industry groups, concerning the use of NFTs to prove ownership of a Play on Demand license, while educating musicians and listeners of the value NFTiPoDs give them.

The most important aspect of NFT creation, to keep the technology viable for Play on Demand licensing, is to keep minting, or what are known in digital currency as gas prices low. By creating a new Ethereum derived currency, MUSIC, following the guidelines of EIP-2309 and managing the currency, Fair Trade Music Distribution Group will be able to maintain low gas rates while keeping the currency attractive to digital currency exchanges and viable for NFTiPoD transactions.

Disrupting the musical economy without disrupting business models already in place, will take great care and coordination within the entire music industry. As the business entity introducing the NTFiPoD concept, it is in the best interest of FTMDG to guarantee that all groups, including content creators and listeners, benefit from Play on Demand licensing. While there is resistance expected from those involved with music piracy, it is hoped that the revitalization of a music economy that encourages creativity and the development of new artists, will be seen as a common goal for all others.