Now in its second decade, cryptocurrency has experienced a meteoric rise in popularity since the inception of Bitcoin in or around 2008 (the history of the technology behind it – blockchain – can actually be traced back to the early 1980s). Crypto’s spread around the world hasn’t been even though, with areas such as artwork and gaming receiving far more attention from developers than mainstream retail.
The obvious question to ask is, what about music? Cryptocurrency or, more specifically, the blockchain, has been touted by experts like PwC as the solution to some of the problems that modern musicians face. PwC, in the paper Blockchain: Recording the Music Industry, claims that the independent validation of transactions in the blockchain could strengthen musicians’ side in a battle that has been raging online since the days of Metallica’s fight with Napster (c. 2000).
On that latter point, the Finextra website adds that a database of ownership rights on the blockchain could enhance musicians’ prospects as far as royalties and copyright is concerned, simply by reducing the opacity of current protections. Put another way, everybody would be able to see what everybody owns, without having the ability to amend records for nefarious ends.
As mentioned, the good news is that there’s a precedent for this kind of thing in other parts of entertainment. Online, the casino industry has been one of the more vocal proponents of virtual tokens, allowing the use of crypto in online slots and other casino games. The Metaspins Casino in particular accepts eight different cryptocurrencies, including Bitcoin, Ethereum Litecoin, and Dogecoin.
The iGaming sector also uses cryptocurrency to increase the accessibility of its services to people who may not have the support of traditional payment providers. On that note, it’s no coincidence that emerging nations are some of the most ravenous users of virtual currency. Music, too, is made all the easier to listen to with a service like LimonX, which exchanges crypto for Spotify gift cards, again, without the need for a conventional bank.
For artists, the worry is that they rarely get a fair deal from current record companies or music streaming platforms. According to USA Today, Spotify pays a fee far to the right of a decimal point (around $0.003 to $0.005) as part of its “streamshare” agreement with producers. This piece of jargon refers to how much cash each person involved in the songwriting process receives.
The fees are less than impressive. As an example, the previous source cites the sub-$5 payday that singer Mackenzie Miller received for 14,000 plays of her new single, “Peach Lemonade.” So, how does crypto fit into this? The most basic promise of blockchain music companies such as the Musicoin Project and Mycelia is that they offer a way of doing things that prioritize artists and fans over the denizens of boardrooms.
Crypto Offers Hope for Artists and Music Fans
The downside is that artists are paid in whatever token the site happens to have created for its purposes – and these rarely have much value. Musicoin claims to have paid out 10,000,000 $MUSIC, which equates to about $2,186 as of mid-April 2021. That’s half the average monthly rent in Manhattan. Still, as a glimpse of what we might see in the future on BongMines, Musicoin does provide a useful case study.
Of course, the price of cryptocurrencies also fluctuates wildly, with Bitcoin losing 27.40% of its value over the year to date. Unfortunately, this is a difficult problem to overcome, especially as crypto’s value has been observed sinking and/or rising in response to celebrity comments. In fact, according to Coindesk, some traders experienced a 37% jump in Dogecoin prices after Elon Musk changed Twitter’s logo to the Dogecoin logo in April.
Overall, music remains in a sort of limbo phase, with artists and studio execs almost guaranteed to never see eye to eye. There’s hope though, somewhere on the blockchain.