How the Coachella Music Festival uses NFT and blockchain
The Coachella Music and Arts Festival is set to return to 2022 after the last two events were canceled due to the coronavirus pandemic. To mark his return, the organizers created a series of non-fungible tokens (NFT). While NFT has been widely used to record ownership of digital collections, its goal is to connect Coachella NFT with tangible benefits such as lifetime event tickets and access to exclusive areas and attractions. A very quick tutorial for those who somehow managed to avoid learning it – NFT is a digital token stored on the blockchain. This means that like all blockchain objects (another example is cryptocurrencies like bitcoin), they are encrypted and distributed and therefore highly secure. It’s fair to say that not everyone likes the concept. Critics point out that some NFTs use a lot of energy, producing large amounts of CO2 emissions. Others just see it as a scam, and it’s true that, like most new technologies, dishonest and unscrupulous people are quick to figure out how to use it to make money off of frivolity. In some cases, sentiment against them is so strong that companies publicly cancel their plans to create NFTs due to backlash from their customers. However, there is no denying that there is a huge buzz for them among artists and creators as well as big corporations. Nike, Taco Bell, Coca-Cola, and the NBA have released their own NFTs, as have artists like Damien Hirst and Mike Winkelman (Beeple) as well as musicians Aphex Twin, Shawn Mendes, Grimes, and Kings of Leon. The most famous examples are those used to record ownership of works of art, some of which have sold for millions of dollars. However, proponents of the technology insist that it can serve many other uses. A vivid example I recently wrote about was Scottish distiller William Grant and Sons, who used it to prove ownership of 15 bottles of rare whiskey that he sold for $18,000 a bottle. So what are Coachella’s plans for NFT? Festival organizers have partnered with cryptocurrency exchange FTX to create a dedicated marketplace for NFT. This will allow festival goers to buy and trade from the initial three token series. The first – the Coachella Keys Collection – will be an exclusive set of 10 NFTs awarding festival tickets for life to whoever owns them. Holders of these tokens will also get VIP access to various virtual events that Coachella hosts when bringing the brand to the Metaverse. Two more NFT collections will be released. The Sights and Sounds collection is more in line with NFT’s signature offering, consisting of 10,000 digital images and sounds from the festival, which are reportedly priced at $60 each. The more expensive Desert Reflections collection will come with physical possession of a limited edition photo book commissioned to celebrate the festival’s 20 year history. Perhaps the biggest criticism of NFT projects is that they are wasteful in terms of the energy required to “slice” the blockchain transactions that keep tokens secure. Coachella tries to avoid this by hosting its NFT on the Solana blockchain. It uses a Poor Proof Algorithm (PoS) – rather than Proof of Work (PoW) – to maintain consensus and validate information stored on the blockchain. In contrast, Ethereum – the most widely used blockchain for NFT projects – still uses PoW, which is much more energy intensive. Why Proof-of-stake? The difference is a bit technical, but a simple way to think about it is that the PoW algorithm rewards computer users with cryptocurrency when their machines perform complex calculations that keep the network running securely. This means they are encouraged to use as much processing power as possible so their machines will check most transactions and they will earn more coins. With PoS, on the other hand, users “bet” on their own cryptocurrency. The algorithm determines who can verify the transaction (and receive the reward) based on who has pledged the currency the longest. PoS is said to be much more power efficient and also capable of processing a much larger number of transactions over a period of time – however, it is a relatively new technology compared to PoW and has not been thoroughly tested or understood. It’s interesting to see that Coachella organizers are taking the time and effort to ensure they have a (relatively) eco-friendly NFT solution. It has recently become clear that environmental concerns are the ones that are likely to halt NFT and blockchain based projects. Take for example Elon Musk, who reversed his decision to accept Bitcoin as payment for Tesla cars, which he attributed solely to his concern about the potential of cryptocurrencies to harm the environment. Why is that important? At first glance, this move from Coachella is just another example of a modern, youth-focused brand setting foot on NFT. However, it is important to make the decision to participate as this is the biggest event in the real world. NFT as a switch or loophole that allows access to the digital environment in the metaverse is one of the most frequently cited uses. Sam Schounover, Head of Innovation at Coachella, said, “We wanted to go one step further and use NFT to enable real-world experiences.” This shows that the most compelling implications for today’s transformative technologies – from blockchain to the metauniverse – are not always confined to the digital realm. Humans are still inherently physical creatures, at least for now, and while virtual music festivals are a fun diversion during times of lockdown or when we don’t have the time or resources to travel, it will remain that way until they can completely replace it. the real thing. . This means that the true value of this technology is likely to be realized when we find ways to use it to impact the real world, not just the virtual world.