The Coachella Valley Music and Arts Festival will see 250,000 festival-goers gather at the Empire Polo Club in Indio, California, to watch some of the most prominent musicians and artists perform. For the first time, you can now get festival passes and memorabilia as NFTs.

1. HOW THE COACHELLA MUSIC FESTIVAL
IS USING NFTS AND BLOCKCHAIN

2. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
HOW THE COACHELLA MUSIC FESTIVAL IS USING
NFTS AND BLOCKCHAIN
The Coachella Valley Music and Arts Festival will see 250,000 festival-goers
gather at the Empire Polo Club in Indio, California, to watch some of the most
prominent musicians and artists perform. For the first time, you can now get
festival passes and memorabilia as NFTs.

3. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
2022 will see the return of the Coachella Music and Arts Festival, following the cancellation
of the last two events due to the coronavirus pandemic. To mark its comeback, organizers
are creating a range of non-fungible tokens (NFTs). While NFTs have so far generally been
used to record ownership of digital collectibles, the aim is to connect the Coachella NFTs to
tangible real-world benefits such as lifetime passes to the event and access to exclusive
areas and attractions.
A very quick primer for those who have somehow managed to avoid learning about them –
NFTs are digital tokens that are stored on blockchains. This means that, like all blockchain-
dwelling entities (other examples include cryptocurrencies like Bitcoin), they are encrypted
and distributed, therefore highly secure.

4. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
It’s fair to say that not everyone is a fan of the concept. Critics point to the fact that some
NFT implementations burn an awful lot of energy, subsequently creating large amounts of
carbon emissions. Others simply see them as scams, and it’s certainly true that, as with
most new technologies, dishonest and unscrupulous people have been quick to work out
how to use them to extract money from the unwary. In fact, in some cases, sentiment
against them runs so strong that companies have publicly backtracked on plans to create
NFTs, due to backlash from their customers.
Despite this, it can’t be denied that there is also a huge amount of enthusiasm for them
from both artists and creators, as well as big business. Nike, Taco Bell, Coca-Cola, and the
NBA have all issued NFTs of their own, as well as artists such as Damien Hirst and Mike
Winkelmann (Beeple), and musicians Aphex Twin, Shawn Mendes, Grimes, and Kings of
Leon.

5. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
The most famous examples are those used to record ownership of artwork, some of which
have sold for many millions of dollars. However, proponents of the technology insist that
they can fill many other use cases. One real-world example I have written about recently is
Scottish distiller William Grant and Sons, which uses them to prove ownership of the 15
bottles of rare whisky it sold for $18,000 each.

6. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
SO WHAT ARE COACHELLA’S PLANS FOR NFTS?
The festival's organizers have partnered with cryptocurrency exchange FTX to build their own
NFT marketplace. Through this, festival-goers will be able to purchase and trade from three
initial series of tokens.
The first – the Coachella Keys Collection - will be an exclusive set of 10 NFTs that confer lifetime
festival passes on whoever owns them. Holders of these tokens will also get VIP access to the
various virtual events that Coachella is lining up, as it takes the brand into the metaverse.
Following this, two more NFT collections will be released. The Sights and Sounds collection is
more in line with typical NFT offerings, consisting of 10,000 digital images and sounds from the
festival, which will reportedly be priced at $60 each. The more expensive Desert Reflections
collection will be linked to physical ownership of a limited-edition photobook commissioned to
celebrate the festival’s 20-year history.

7. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
Probably the biggest criticism that gets directed at NFT projects is that they are wasteful in
the way energy is needed to “mint” the blockchain transactions that keep the tokens secure.
Coachella is attempting to avoid this by hosting its NFTs on the Solana blockchain. This uses
a proof-of-stake (PoS) - rather than proof-of-work (PoW) - algorithm to maintain consensus
and validate the information stored on the blockchain. In contrast, Ethereum - the most
commonly used blockchain for NFT projects - still currently uses PoW, which is far more
energy-intensive.

8. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
WHY PROOF-OF-STAKE?
The difference is somewhat technical, but a simple way to think about it is that under a PoW
algorithm, computer users are rewarded with cryptocurrency when their machines carry out
the complex calculations that keep the network running securely. This means they are
incentivized to throw as much computer power as possible at it, so their machines will be the
ones that verify the most transactions, and they earn more coins.
Under PoS, on the other hand, users “stake” their own cryptocurrency. Algorithms determine
who gets to verify the transactions (and receives the rewards) based on who has had the
most currency staked for the longest time. PoS is said to be far less energy-intensive and also
capable of handling a much greater number of transactions in a given period of time –
however, it is a relatively newer technology compared to PoW and not as thoroughly tested
or understood.

9. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
It's interesting to see that the Coachella organizers are taking the time and
effort to ensure that they have a (relatively) environmentally-friendly NFT
solution in place. Recently it has become clear that environmental concerns are
the issue that are most likely to scupper NFT and blockchain-based projects.
Take, for example, Elon Musk reversing his decision to accept Bitcoin as
payment for Tesla’s cars, which he attributed solely to his concern over the
cryptocurrency’s potential to cause environmental damage.

10. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
WHY IS THIS IMPORTANT?
On the face of it, this move by Coachella could be seen as just another example of a trendy, youth-
oriented brand hopping on board the NFT bandwagon. However, it’s significant because it is the
biggest real-world event to make the decision to get involved. NFTs as keys, or passes, enabling access
to digital environments within the metaverse, are one of the most commonly cited use cases. As
Coachella’s innovation lead, Sam Schoonover, put it, “We wanted to take it one step further and use
NFTs to enable ownership of experiences in the real world, too.”
This suggests that the most exciting implications for today’s transformative technologies – from
blockchains to the metaverse – don’t necessarily only apply to the digital domain. Humans, for now at
least, are still primarily creatures of the physical world, and while virtual music festivals might be a fun
diversion during periods of lockdown, or when we simply don’t have the time or resources to travel, it
will be a while before they can fully replace the real thing. This means that the real value of these
technologies is likely to be realized when we find ways to use them to impact the real world, not just
virtual ones.

11. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
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12. © 2021 Bernard Marr , Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker,
futurist, and a strategic business & technology advisor to governments and
companies. He helps organisations improve their business performance, use data
more intelligently, and understand the implications of new technologies such as
artificial intelligence, big data, blockchains, and the Internet of Things.
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