Blockchain’s Transformational Move into Music

By June Liu ’18

digitalencryptionThe music industry has battled its fair share of challenges in transitioning to the digital age. Artists, music companies, and fans have long experienced turbulent relationships with one another and with streaming and file-sharing services. With illegal downloading and piracy on the rise and musicians becoming increasingly dissatisfied with heavy losses from their work, the music industry is turning to blockchain technology as an instrument for proving ownership and authenticity so that content creators and consumers alike can gain greater control over their digital assets.

Blockchain, the technology behind the Bitcoin cryptocurrency, is a public ledger system that can be used to strengthen data integrity and control. Just as the blockchain secures proof of all transactions on the bitcoin network, the emerging technology can also prove the authenticity of digital music information by providing time-stamped verification and attribution. Several blockchain startups are entering the music sphere by building platforms that allow songs to be stored on the blockchain with a unique ID as soon as they are recorded.

PeerTracks strives to change how artists interact with their fans by issuing “artist tokens” that fans can purchase, thereby giving them equity in that artist. With a business model resembling that of digital service providers like Apple Music and Spotify, PeerTracks allows users to stream and download songs and albums while ensuring that each party is compensated fairly. The popularity of the artist who created the token determines the value of the token itself, so artists of higher demand are worth more and vice versa. Meanwhile, with UjoMusic, artists are able to receive royalties directly and to bypass distribution inefficiencies caused by record labels, publishers, and digital service providers. Users send Ether, the currency of the Ethereum blockchain, to a “wallet” that they themselves have created. Users are then issued a license once they have sent money from their funded wallet to a smart contract. At the same time that users are granted an MP3 file from their license, the artist and artist’s team get paid.

Despite the potential benefits that blockchain technology can offer the music industry, it may take some time for the music industry to fully accept the technology, if at all, much like with cloud computing. There are also limitations in regard to scalability and capacity that make it difficult to predict how blockchain technology will accommodate millions of transactions daily once it becomes widely adopted.

It is difficult to predict how much traction blockchain will gain in an industry as skeptical of digital technology as music. But whether or not blockchain technology becomes widely accepted, it is most certainly disrupting the music world and making players from all sides seriously consider the issues of transparency and ownership that have long plagued the industry.

Sources:

https://bitcoinmagazine.com/articles/three-startups-trying-to-transform-the-music-industry-using-the-blockchain-1447444594

http://www.cio.com/article/3058266/security/blockchain-technology-hype-or-reality.html

http://www.forbes.com/sites/jonathanchester/2016/09/16/how-blockchain-startups-are-disrupting-the-15-billion-music-industry/#5e5cfc6f652c

https://www.imusiciandigital.com/en/blog-article/to-good-to-be-true-what-the-blockchains-means-for-the-music-industry/

https://techcrunch.com/2016/10/08/how-blockchain-can-change-the-music-industry/

http://www.telegraph.co.uk/culture/music/rockandpopmusic/8325381/Illegal-downloading-is-suffocating-the-music-industry.html

Photo:

http://static.wixstatic.com/media/889919_c1c35794f8794d43bc00462306e284b5.jpg_srz_979_551_85_22_0.50_1.20_0.00_jpg_srz

 

Filed in: Featured content, Technology, Uncategorized

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