MUSICOIN: A STEP FOR CRYPTOCURRENCY AND MUSIC
The story of the global record music industry, estimated to be worth $15.6 billion (USD) in 2016, has always been grim reading for musicians. The Digital era introduced P2P sharing services like Napster, the iTunes Music store, and then streaming platforms like Spotify and Apple Music, none of which really benefited musicians financially. Today, the revenue from each streamed song often goes through several intermediaries like record labels, performing rights organizations, and publishers before a faction of it gets to the artist.
As for listeners, with affordable access to these large, global music catalogs, it is clear that they receive the better end of the stick. However, they are forced to either be locked-in to one app and the music included on its catalogue, or manage multiple apps, which is a much more tedious and expensive option. Futher, the nature of streaming apps means that users have no file ownership, thus losing libraries and playlists.
Musicoin
Musicoin, launched in February 2017, is a music sharing platform based on the blockchain. Employing the blockchain (the technology behind cryptocurrencies), Musicoin is reestablishing the relationship between artists, record labels and listeners to create a more equitable and sustainable method of consuming music. Musicoin has no fee, is fully open source and offers full transparency on all contracts and transactions similar to Wikipedia. To distill Musicoin in the simplest terms, musicians can upload their songs coupled with a copyright license in the form of a ‘smart contract’ built using blockchain. The contract tracks playback, and triggers payments directly from listeners to artists, instantaneously and without intermediaries, in the form of a digital currency.
Because there are no intermediaries in the platform, musicians can be ensured to receive the best compensation in the music industry, instantly and automatically. Musicians do not have to worry about infringement because the blockchain-based system reports content rights publicly and also provides equitable and transparent licenses with the Smart Contracts.
Listeners enjoy the streaming service without ads and are able to communicate with musicians directly via sharing thoughts and songs, making playlists, and even tipping artists. The platform also offers various value-added goods and services, allowing listeners to download songs, purchase merchandise, book tickets for live performances, and subscribe to music magazines with its cryptocurrency, $MUSIC.
$MUSIC
The digital currency that flows through the system is called Musicoin, traded as $MUSIC, designed by Musicoin to support creation, distribution, and consumption of music.
Like other cryptocurrencies, it can be mined through a mining client, yielding 314 coins per block. It is currently available on two cryptocurrency exchanges, Cryptopia and Bittrex, where it can be converted into Bitcoin. The value of Musicoin is what people perceive it to be and is constantly changing. There is also no finite number of Musicoin that can be generated as there is no finite number of song plays.
At this point, musicians paid in Musicoin can only exchange the currency for fiat currencies (like USD or HKD) via bitcoin. However, as is the case with many cryptocurrencies, the goal for $MUSIC is to be an accepted means of exchange for other goods and services.
Consumers can acquire $MUSIC by participating in activities such as content sharing and playlist building, which enriches the value of the network, or they can generate it by mining.
Universal Basic Income
Most of the existing music streaming services pay out less than a penny for unsigned artists per play. As of June 2017, Spotify and Pandora paid out $0.0038 and $0.0011 each while Napster paid out $0.0167 per play. Musicoin pays out $0.0200 per play, and it is more than 18 times the amount of Pandora’s per-stream rates.
The highest per stream rates is practicable because of Musicoin’s revolutionary concept in cryptocurrency, Universal Basic Income (UBI) pool. UBI is an economic model that allows each contributor to receive fair compensation based on the level of contribution to the platform. The $MUSIC rewarded by mining will go to the UBI pool, and it will be withdrawn for miners, musicians, and project R&D. 79.6% of $MUSIC in UBI pool will go to miners, 15.9% to musicians as the PPP for streaming, and 4.5% to project R&D. The revenue from the PPP for the musicians is unaffected by the changing market value of $MUSIC because the system adjusts the amount of $MUSIC per streaming based on the current market value of $MUSIC. This system ensures fair and higher rates for the musicians.
By the implementation of UBI, listeners use $MUSIC for tipping their favorite artists on the platform. According to Musicoin’s empirical data, the tipping income is five times higher than PPP revenue for musicians. Free streaming service without ads encourages listeners to tip musicians, and it will lead encouraging musicians to create quality contents to grow their fan-base.
Conclusion
Some similar platforms based on blockchain technology, such as Musiconomi, Voise, and Audiocoin, that also have fair and transparent compensation are gaining traction as well. However, Musicoin stands out because of its unique philosophy.
They believe that content creators, musicians, should be compensated the most for creation and distribution of their music. In this model, an exchange is made between the musician and the listener by each playback. The listener pays for the musician, and the musician grants the access to his or her music. The chief architect of the Musicoin blockchain, Issac Mao, mentioned his philosophy as simply,“The more you share, the more you receive. The more you share, the more you are shared. The more you share, the more you are. The more you share, the more others receive.”
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