Unless you're completely disinterested in technology or have been under a rock for all of 2017, you've by now heard of cryptocurrencies. What started out as a very long shot to dethrone central world banks has since gained a huge amount of traction this year. Bitcoin, the biggest cryptocurrency by far, has earned over a whopping 1000-percent return this year alone, going from a value of $731 per bitcoin to over $12,000 at its peak.
However, while prices have gone up, each one does slightly different things than the other. And though we're still in the wild west days of cryptocurrencies, one of the earliest adopters of them so far have been musicians. Artists like Gramatik, Imogen Heap, and Kraftwerk have already released albums and their own virtual monies on the blockchain—the technology, a digital ledger of economic transactions, that supports cryptocurrencies. Additionally, according to Billboard, Mariah Carey, G-Eazy, and others will be accepting Monero, another cryptocurrency, as payment for their merchandise this holiday season.
And the possibilities only seem to expand in the future.
One of the hardest issues with being a musician in the digital world is making a financial living off your music and still retaining control over the rights and usage of it. While being a music maker may seem glamorous from the outside, stories have surfaced of producers creating hit songs for major artists and earning virtually nothing. Considering YouTube's extremely low royalty payments, streaming businesses fighting for market space while being sued over monies owed, and digital download sales declining yearly, the music business is clearly still figuring out its revenue system that feels disorganized, fragmented, and outdated.
The possibilities at the moment may seem far-fetched and even impractical to us, including me. So let's open our minds and check out some of the capabilities that blockchain technology might be able to offer musicians in the future.
ARTIST TOKENS | Perhaps the biggest change that the blockchain could bring to the music industry is creating and hosting artist tokens. The concept is that fans would buy a token by their favorite artist and as that artist grows bigger, or smaller, people would buy or sell the token for the value that coincides with it. Think of it as buying stock in an artist.
Imagine buying an Ed Sheeran, Taylor Swift, or Bruno Mars token while they were still up-and-coming. It would now be worth much, much more today. Instead of "liking" Sheeran's page on Facebook, a third party, fans could essentially invest in and support the artists they like themselves, creating an entirely new way to bring in revenue to the music industry. In return, artists could give fans special or discounted deals when they buy concert tickets, merchandise, or other items with their respective tokens. Gramatik raised $2.4 million to get his own GRMTK cryptocurrency launched and after selling his tokens, the entire ecosystem is now worth $9 million.
ALBUM RELEASES | In 2015, Imogen Heap made history by releasing her single "Tiny Human" on the blockchain of Ethereum, the second biggest cryptocurrency. However, it wasn't the best execution. The release was plagued by bugs and most people still weren't savvy enough to understand using cryptocurrency to purchase the album. This lead to only 222 individual sales, totaling $130.20. Still, the project brought the concept of blockchain to the forefront and was a breakthrough in technology regarding artist releases. Imagine being the first song ever sold on the iTunes Music Store.
SECURITY & MANAGEMENT OF DIGITAL MUSIC LICENSES | What also makes Ethereum blockchain technology truly unique is the capability to use Smart Contracts. Smart Contracts allow for 100-percent verified purchases online to be made through a proof-of-stake transaction process. In the future, this could help musicians keep track of when someone uses their music without their knowledge and flagging it to either take down or monetize, instead of relying solely on YouTube's algorithm to catch it. Ethereum's blockchain is also public and open-source which means that developers can write programs utilizing its blockchain technology much like they did on Apple's App Store when it launched in 2008.
TICKET SCALPING | One obstacle faced in attending concerts, or trying to, has always been ticket scalpers. They have made big sums of cash by buying large quantities of tickets and then reselling them in various ways to turn a profit. Blockchain technology could track the ticket sale digitally, so that when they are resold the purchaser can be alerted of the price difference, ultimately helping artists and fans better enjoy their concert experience.
While there is still a very long way to go with scaling blockchain to reach mass consumers, the capabilities are there to enable these technologies. Or, who knows, this whole thing could fall through and it's all for nothing. But I feel that what musicians ultimately want at the end of the day is to make a living monetarily off their work, express themselves how they want, and engage with fans. Blockchain technology could give musicians that true direct-to-fan relationship they've always longed for.
I'm not saying record labels, public relations firms, agents, or other music industry professionals will be done for, but if the music industry learned anything from their stubbornness in fighting millennials over services such as Napster, they might want to take a listen this time around and understand where the young audience might be going and try to meet them there. Music is the number one subject on social media and if blockchain technology survives and matures, music will almost certainly be the biggest thing on it.