Blockchain & The Musical Industry
In recent years, blockchain has emerged as a disruptive technology across many sectors, including the music industry. Although its name may sound technical and complicated, its basic concept is simple: it’s a decentralized digital ledger that ensures the transparency and security of transactions. But what does this mean for musicians and the music industry in general?
Current Uses of Blockchain
Cryptocurrencies: The most well-known use of blockchain. Bitcoin, Ethereum, and other cryptocurrencies operate thanks to this technology. While it may not seem directly related to music, these digital currencies are fundamental to many music projects based on blockchain.
Smart Contracts: These are programmed agreements that automatically execute when certain conditions are met. For example, a smart contract could ensure that a musician gets paid automatically every time their song is played.
Rights Management: Blockchain allows the transparent recording of authorship and rights for musical works. This prevents disputes over ownership and ensures creators receive their fair share of royalties.
NFTs (Non-Fungible Tokens): NFTs are unique digital certificates that can represent art, music, or even exclusive experiences. For musicians, this means the possibility of selling albums or concert tickets in exclusive, verifiable formats.
Music Projects Using Blockchain
Wavelake is a 2.0 music platform that enables artists to monetize their work directly and in a decentralized manner through Bitcoin’s Lightning Network. Designed to empower musicians, Wavelake eliminates intermediaries, giving creators the opportunity to receive direct financial support from their fans through micropayments in satoshis.
Fountain is an app that allows podcast listeners to directly support creators using the “Value for Value” model. Leveraging Bitcoin and the Lightning Network, Fountain simplifies micropayments, fostering a more direct and meaningful connection between creators and their audience.
Zap.stream is a live streaming platform built on the “Value 4 Value” model, enabling creators to receive direct support from their audience via Bitcoin’s Lightning Network. With a decentralized approach, zap.stream facilitates real-time interaction between streamers and viewers, allowing fans to send instant micropayments in satoshis as a token of appreciation, fostering a closer and more authentic connection between creators and their community.
Audius: A decentralized streaming platform that allows artists to upload their music and receive direct payments in cryptocurrency without intermediaries. Additionally, listeners can also earn rewards for their interaction on the platform.
Royal: This platform allows musicians to sell fractions of the rights to their songs as NFTs. Buyers can invest in the music and receive a share of future royalties.
OPUS: A project that uses blockchain to store music and pay artists directly every time their work is played. It eliminates the high commissions that traditional platforms typically charge.
Band Royalty: An interesting case where NFTs representing a share of the rights to songs are sold. Buyers earn passive income as the songs generate royalties.
Zora: A platform combining the use of NFTs with a focus on sustainability for creators, allowing musicians to set dynamic pricing and receive direct payments in Ethereum.
BitSong: According to its own description, “it is a multifunctional blockchain-based ecosystem created to empower the music industry. It connects artists, fans, and distributors in an environment where music, products, and fan loyalty are valuable assets. BitSong’s decentralized ecosystem of services provides the global music community with a trustless marketplace for music streaming, Fan Tokens, and NFTs, powered by the BTSG token.”
Benefits of Blockchain for Music
- Transparency: All data and transactions are visible and accessible to participants.
- Direct Payments: Artists receive their share without intermediaries, increasing their income.
- Clear Ownership: Blockchain removes disputes over authorship and rights to works.
- Innovation: It opens the door to new ways to monetize music, from selling exclusive albums to creating unique experiences for fans.
Current Challenges
Although promising, the adoption of blockchain in music faces several challenges:
File Size: Blockchain is not designed to store large amounts of data, such as audio files. Instead, files are often stored off-chain and linked via references, which could compromise full decentralization.
Accessibility: Not all musicians and listeners are familiar with cryptocurrencies or decentralized platforms, which could be a barrier to adoption.
Regulation: The legal framework for blockchain-based technologies is still in development, and legal uncertainties may discourage creators.
Transaction Costs: In some blockchains, the fees for making transactions (known as “gas fees”) can be high, making it difficult for microtransactions like streaming payments.
Interoperability: Many blockchain projects operate on separate platforms that aren’t always compatible with each other, limiting collaboration and data exchange.
The Magic Solution for All Our Problems?
Blockchain is not a magic wand that will solve all the problems of the music industry, but it represents a step toward a more fair and efficient model. By decentralizing control and increasing transparency, this technology is giving power back to musicians and their listening communities. While it’s still in its early stages, projects like Audius and Royal are showing how this revolution can be viable.