File-sharing website LimeWire is relaunching in the form of a marketplace for nonfungible tokens.
LimeWire, the defunct file-sharing website, is set to make a comeback.
The controversial service was shut down back in 2010, after a lengthy legal battle with the Recording Industry Association of America over allegations of music piracy. A federal judge found the platform caused copyright infringement on a “massive scale.”
At its height, LimeWire was one of the most popular peer-to-peer file-sharing websites, allowing users to download music and other content online free of charge. The likes of LimeWire, BitTorrent and Napster were eventually succeeded by subscription-based streaming services such as Spotify and Netflix.
More than a decade since it closed down, LimeWire is making a comeback – but with a twist.
The service will relaunch in May as a marketplace for trading nonfungible tokens, or NFTs, digital assets that keep a record of ownership for virtual items on the blockchain.
Austrian brothers Julian and Paul Zehetmayr bought LimeWire’s intellectual property and other assets last year. They say they’ve been planning to bring the platform back ever since.
The new LimeWire will focus on music, letting users buy and trade rare items such as limited editions, unreleased demos and digital merchandise.
The platform will list prices in US dollars, rather than crypto, and users will be able to purchase tokens using credit cards. Its payment functionality has been developed in partnership with the start-up Wyre.
The company is counting on a more accessible approach to NFTs, as well as an advisory board that includes the manager of rap group Wu-Tang Clan, Tareef Michael, to attract users.
“The issue with the NFT market is that most platforms are decentralized,” Julian Zehetmayr told CNBC. “If you look at bitcoin, all the exchanges are making it really easy to buy, trade and sell bitcoin. There’s no one really doing the same in the NFT space.”
“We’ve obviously got this great mainstream brand that everybody’s nostalgic about,” he added. “We thought we needed to build a real mainstream user experience as well.”
So far, LimeWire’s revival has been funded with money the Zehetmayrs raised through the sale of their previous ventures. Their software firm Apilayer, for example, was bought by American holding company Idera last year.
The brothers say they plan to raise additional capital through the launch of a LimeWire token, which will initially be sold to a select few investors ahead of a public sale later down the line. The token will grant holders the ability to vote on changes to LimeWire’s policies as well as which artists are featured in its music charts.
The Zehetmayrs say they’re also considering a venture capital financing round later this year.
Taming a ‘Wild West’
NFTs took off in a big way in 2021, with trading in the tokens reaching billions of dollars. The market has attracted everyone from crypto enthusiasts to celebrities, with a popular range of digital collectibles called the Bored Ape Yacht Club even making an appearance on “The Tonight Show Starring Jimmy Fallon.”
Proponents of NFTs say they solve a key issue with the modern internet: namely, the unfettered distribution of media on the web, and a decline in compensation for artists and creators.
However, others criticize the speculative nature of NFTs, which are often bought with the intention of flipping them at a higher price, as well as the number of scams in the space.
Julian said there are “lots of parallels” between the NFT market today and LimeWire in the past, adding both are “kind of a Wild West.”
“We’re trying to be a more mature platform and professionalize everything, just like Coinbase or other exchanges would do for crypto assets,” he said.
LimeWire is not the first decentralized file-sharing service to turn to the world of cryptocurrencies. Rival company BitTorrent was acquired by crypto entrepreneur Justin Sun’s start-up Tron in 2018.