Cryptocurrencies were the hot topic in 2017 and, while the public furore may have subsided somewhat in 2018, the industry is still changing the world around us. Naturally, for many, the main reason cryptocurrencies such as bitcoin have become big news is because they offer a new way to pay. Although the jury is still out on whether bitcoin could become a common payment system for the masses, it’s certainly become a viable option in a variety of industries over the last five years. Microsoft was one of the first major companies to embrace the digital payment system when it offered a BTC checkout option on its online store. As well as giving its customers a chance to pay and download PC content using bitcoin, the cryptocurrency was also integrated into the Xbox Live platform.
In fact, it’s in the online gaming world where bitcoin has gained the most traction. Steam, a virtual games network, has long accepted bitcoin, while online casinos have also been quick to adopt the technology in a bid to serve global audiences. By forgoing the traditional casino model, cryptocurrency casinos don’t have to offer multiple currency options. Instead, by offering digital currencies such as bitcoin, operators can offer games like Satoshi Blackjack to players around the world via a single monetary system. Indeed, it’s this combination of accessibility and fluidity across international borders is often touted as the main benefit of bitcoin and its cryptocurrency peers.
The Building Blocks of a New Era in Music
However, when you look beneath the surface, the technology powering cryptocurrencies such as bitcoin is giving artists more control over their content. In the first instance, musicians can now sell their content using bitcoin. Icelandic singer Bjork jumped on the crypto bandwagon in 2017 and gave fans the opportunity to buy her album Utopia using bitcoin, litecoin, dash, and AudioCoin. The move came about after Bjork’s record label, One Little Indian, teamed up with blockchain payment specialist Blockpool. As well as keeping up with the zeitgeist, the decision to accept bitcoin payments was a way for Bjork to have more control over the pricing of her record. Using universal cryptocurrencies meant fans around the world could all pay the same price using the same token.
Taking this idea a step further, artists with the necessary resources have the opportunity to create bespoke cryptocurrencies. Given that cryptocurrencies are decentralised payment systems, artists can, in theory, launch their own tokens which fans can then use to purchase their music. By launching a custom payment system, music creators can essentially free themselves from the grip of a record label. Assuming fans are willing to trust the cryptocurrency, an artist can not only set their own prices, but process payments and, moreover, keep 100% of their earnings.
Creating a Crypto Community
This is an idea Slovenian electro producer and artist Gramatik went with in 2017. During a performance in Switzerland in November 2017, Gramatik announced the launch of GRMTK. Based on the Ethereum blockchain, GRMTK not only gives holders a way to buy Gramatik’s work but earn a share of his royalties. Embedded in each token is a tracker that’s linked to record sales. Therefore, anyone that buys a token also owns a piece of Gramatik’s records. As he sells more records and his royalty payments increase, so too does the value of a token and, therefore, the holder’s share of the profits. In simple terms, what Gramatik has done is to create a link between his work, his fans and his financial rewards by using blockchain technology. What’s great about this model is that it not only creates a sense of community, but it promotes fan engagement. Because everyone benefits when record sales improve, fans have more reason to engage with the content and, moreover, Gramatik has more reason to give them what they want.
Beyond profiting from blockchain technology, artists can also protect themselves from piracy and copyright infringement thanks to bitcoin and its spinoffs. Take, for instance, Smart Contracts and the Ethereum Network. Without delving into too much detail, Smart Contracts basically involve two parties anonymously agreeing on some sort of deal. This deal is then written as a code and only triggered when certain pre-agreed conditions are met. When it comes to payments, this basically means that the goods or services aren’t released until the transaction is completed and verified. What’s more, because the Smart Contracts are stored on a public ledger, they’re always traceable and verifiable. Through this system and something known as proof of stake, artists could protect their content with Smart Contracts.
An Independent Future for All Artists
In practice, this would mean that anytime someone uses the music without the correct licence (i.e. a condition encoded in the contract), it would flag it up. Naturally, for the aspiring artists, this type of system isn’t a viable option just yet. However, as cryptocurrencies continue to increase in popularity and blockchain technology evolves, its usage will become commonplace across the industry. For those that value their independence and, moreover, the safety of their content, these innovations hold a lot of promise. Although the world at large is currently focused on bitcoin and its peers as a payment method in the gaming industry and beyond, the uses are almost endless. As computers become more advanced and people accept their own flaws, moving towards autonomous systems will become the norm.
When this happens, it could lead to a new era for the music industry. Just as streaming sites shifted the way consumers listen to music, blockchain could soon alter the way musicians create, promote and distribute their content. If and when this happens, independent artists could be the biggest beneficiaries. Instead of relying on a record label to process payments and protect your creations, technology could do it for you. That on its own is enough reason to be grateful for the recent rise of bitcoin, cryptocurrencies and blockchain technology.