OpenSea is the crypto marketplace that was recently used for the Kings of Leon NFT auction, and it is already billing itself as “the largest NFT marketplace” as interest in non-fungible tokens explodes.
Investors are sold on the pitch: OpenSea has just raised $23m in funding led by the crypto arm of VC firm Andreessen Horowitz. The company also says that in February this year, $95m of digital items were sold on its site – a sharp rise from $8m in January.
“We don’t think it’s silly or faddish at all,” Andreessen Horowitz partner Kathryn Haun told Fortune. “We recognise there could be cycles. We’re crypto investors, so we’re very comfortable with that, and we’re very used to it. We’re in this for the long haul.”
However, the NFTs craze continues to attract its fair share of criticism. For example, this Twitter thread from musician Dan Le Sac yesterday raising questions about Ditto Music’s move into NFTs.
“No clarity on what aspect of copyright you’re buying. No information on what level of control that confers or how long your ownership lasts. Not against the concept but it’s entirely unclear what you’re actually buying,” wrote Le Sac, with Ditto CEO Lee Parsons then getting involved with a defence of the model.
Meanwhile another Twitter thread by developer Jonty Wareing, about the technicalities of how NFTs reference the art or media that is being bought, is also being widely shared. Its central question: what happens to an NFT if the company that made it goes bust.
“Right now NFT’s are built on an absolute house of cards constructed by the people selling them,” he wrote. “It is likely that every NFT sold so far will be broken within a decade. Will that make them worthless? Hard to say.”
A sobering thought if you’ve just spent $69.4m on a Beeple artwork. But Wareing’s thread has sparked responses from the NFTs world arguing that these issues can be addressed. Perhaps not a reason to run away screaming from the NFTs space just yet then.
However, as with the environmental impact questions that recently led artist Jacob Collier to abandon his planned NFT auction, these questions and debates show how important it is for musicians and the music industry to take a breath and research the NFTs model properly before getting involved.
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