Bitcoin for Musicians: How Cryptocurrency Can Revolutionize the Music Industry
Have you ever thought about ways in which Bitcoins and the blockchain technology can revolutionize the music world? The Bitcoin was the first digital currency based on a distributed ledger technology or blockchain. When it comes to music, there are some major problems that musicians face today. There is yet no centralized database for tracking information relating to music. Any music piece has two key elements, namely one who owns rights to the music and one who creates the music. Finding out these details turns out to be quite challenging. But this problem can be resolved if we use blockchain technology.
On-demand streaming platforms like Apple Music and Spotify allow buyers to access music products; however, there are some intermediaries between consumers and artists and these cause inefficiency in royalty payments. But with blockchain application, this can be resolved. Artists will become free to make their own music and make more money from it.
While you may know who sang a popular song, you may not know who his music hands were when you listen to it on YouTube or Spotify. Earlier, such behind-the-scenes talent was displayed on CDs but these have become completely obscured in the digital world. Information about every contributor to an album is there but it is fragmented amongst multiple databases. These do not sync with one another.
The second issue is that you may get credit for your work but you may not get a payment that easily. Artists often sell rights to different record companies. A singer may choose to give rights of publishing to one company and rights to prepare sheet music to another for his song. So, when an individual writes a song and records it, he creates a cluster of rights which he can sell to different actors. When any track gets played on Spotify, for instance, it will track users playing it and then give a payout from its royalty pool depending on the song’s popularity. But this payout includes payments for different owners of rights to that song, like the recording company, performing rights organization, etc. Money will find its way to the artists only after passing through many intermediaries, each of whom has its timeline, fees, accounting processes, and standards. Outdated IT systems and information fragmentation are the biggest roadblocks to transparency. These inefficiencies centering on rights information can affect music creators by imposing unnecessary complexities and costs.
The best solution is therefore an open-source decentralized platform that is not owned or regulated by a single authority. This would have real-time data of ownership rights and credits that can be accessed by one and all. When data is reliably organized, music producers, singers, and licensees can benefit; any time they need to get data, they can access the network. So, anyone contributing data will be rewarded for this contribution.
Such architecture would build an efficient and simple way to pay creators and owners of music rights. Every song or recording will have its own address on this ledger and there will rules or “smart contracts” defining how these addresses relate to one another. Platforms like Spotify can then provide royalty micropayments to the address every time a song is played. Smart contracts that are linked to the address will recognize the payment source and then split the royalty, directing it to the other addresses which are entitled to get payments for that song. This software-based action for license and royalty payments ensures that creators are part of the action and have access to profits their work generates.
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