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Why blockchain won’t change music – Billboard

Why blockchain won't change music - Billboard

Almost five years ago, I wrote a column on how Bitcoin and Blockchain could change the music business. At the time the question seemed more about how how if: An online store for goods has just started accepting cryptocurrency, several entrepreneurs have founded startups to use blockchain technology to pay rights holders, as well as an entrepreneur and then-CEO of Dot Blockchain. Benji Rogers predicted that “blockchain technology is coming like a tsunami.”

I was skeptical. I called Blockchain a “problem-seeking solution” and pointed out that the only person I knew who bought anything with Bitcoin was a former neighbor in Berlin who bought LSD online. At the time, Bitcoin was worth $11,631 and the Dow Jones average was $25,803.

As Bitcoin skyrocketed to its November 2021 high above $56,000, more artists and music executives became convinced that cryptocurrencies and blockchain technology would change everything. Artists were selling NFTs – as were Billboard — and in February, Coachella sold $1.4 million worth of NFTs, including 10 lifetime passes to the annual festival.

Now crypto exchange FTX is in bankruptcy, bitcoin has fallen to $16,099 and the US will almost certainly regulate crypto “banks” and exchanges. From an economic standpoint, this means that crypto companies may have to compete head-to-head with traditional financial institutions, which will reduce the risk to consumers but eliminate some of the benefits that startups get from setting their own rules. From a non-economic point of view, mom and dad are at home, they are furious and won’t let you run your business unless you put on big boy pants!

So what about the tsunami? It has been a busy five years for the music industry: Recorded music has boomed, major financial players have invested in catalog publishing, two out of three major labels have gone public, Latin music has gained a large global audience, and TikTok has emerged as a transformative source of promotion. . However, blockchain and bitcoin did little to change the industry. Several artists have made an insane amount of money from NFTs, and several companies have announced plans to fundamentally disrupt destruction itself. But Bitcoin is still an inefficient medium of exchange and a poor store of value – a high-yield, high-risk investment at best – and Blockchain is still the solution in search of a problem.

A little over a year after my column, Benji Rogers, author of the tsunami prediction, left Dot Blockchain, which was renamed Verifi Media in September 2019. The company still helps rights holders track ownership and use of data, but does not emphasize blockchain technology on its website. (Emails to Verifi’s PR contact came back as undeliverable.) This makes sense: the big problem with entitlement data has always been that it’s incorrect or incomplete. Blockchain is a distributed database that allows users to track changes but cannot correct incorrect or missing information.

Five years ago, startup Choon had a plan to track music usage using Blockchain and immediately pay rights holders with a digital currency called Notes. It went out of business in 2019 as the value of Notes dropped along with bitcoin. Next year Chun co-founder Bjorn Niklas launched Rocki during the pandemic and traded outstanding Notes for Rocki tokens at a 50:1 ratio. (The company also allows independent musicians to sell NFTs.) Since then, the value of Rocks tokens has dropped from 5 cents each to a high of $5.45 in April 2021—it peaked when Bitcoin did—and dropped to about a penny. Sounds exciting and potentially lucrative, but I suspect most artists prefer to get paid in a currency that retains its value.

Bitcoin and NFTs aren’t going anywhere – some investors see the “crypto winter” as a buying opportunity, while others just want HODL. (Art-NFT works better than most.) But the collapse of FTX will inspire investors and, hopefully, government agencies to ask more questions about whether celebrities who buy and sell NFTs are transparent enough about their transactions, especially since that the fans they influence can invest in ways that help those who already own them.

Like many online technologies, Blockchain and Bitcoin offered a utopian dream of decentralization, free from government regulation and control. However, when it comes to finance, government regulation is not a mistake, to use a technological phrase, but a feature. Just ask anyone who had FTX money that wasn’t insured by the Federal Deposit Insurance Corporation (FDIC) like US banks. Among the assets stuck in the exchange are Coachella keys that offer owners access to the festival.

Coachella said Billboard that he is confident that he will cope with this problem. But it’s hard not to wonder if there wasn’t an easier way to do this – like QR code passes, or maybe even just seats in a database that could be sold with the cooperation of an event promoter. Blockchain is essentially a distributed database that can operate at the scale of the internet, and it’s easy to see how interesting that is. It’s just that it’s still hard to see what benefit this can bring to the music business.

Written by khirou

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