Music Business

3 Things About Disruption That Bitcoin Can Teach The Music Industry

1 (1)Whether they're for it or against, people often discuss blockchain tech's potential to disrupt the music industry, but disruption may not mean exactly they think, and creating a new system that will change the industry in a way which truly benefits artists is no easy task.


Guest Post by Bryce Weiner on Zapchain

The music industry is about to change.  Everyone knows it.  Applied blockchain cryptography and new virtual reality systems are about to change digital entertainment more radically than what portable digital music players and streaming content platforms have in the last 20 years.  I’ve been involved in the tech industry since the late 90’s.  I saw, participated in, and profited from the tech bubble of the first decade of this century, mostly as a developer. I’ve been involved with Bitcoin and blockchain development since 2013.  I have been on the vanguard of the disruption as it rippled through the financial sector, and for the last two years I’ve been working with various entities within the music industry to educate and prepare them for the coming of blockchain cryptography.  From the sum total of those experiences, I think there’s three things of which the music industry should take note on the eve of its own disruption.

1. Disruption isn’t what you think it is.

Bitcoin was born with the battle cry of disrupting financial transactions and settlements, but suffered from a distinct myopia of opinion. Bitcoin didn’t disrupt the financial system nearly as completely as services such as PayPal and RUSHCard.  The technology which underpins Bitcoin, the blockchain, is extremely utilitarian as a data store methodology.  The initial implementation of Bitcoin was released in a white paper developed by a partnership between the NSA and MIT in 1996.  In 2009, the system was released open source with the addition of the “proof of work” transaction processing method by the enigmatic “Satoshi Nakamoto”.  Similar to the MP3, the specifications for the Bitcoin protocol were released open source.  This enabled the largest financial institutions of the world, considered the traditional target disruption of the Bitcoin movement, to sidestep the threatened disruption.  The end result of this is the wisdom that…

2. Big players aren’t all that easily unseated, they are actually empowered.

2The open source nature of the Bitcoin network allowed its philosophical foes to employ that technology for their own use cases, and do so with the added benefit of a public proof of concept in constant development at zero cost to the enterprise.  The Bitcoin network is essentially a crowd-funded laboratory in the real-world application of blockchain technology.  With sufficient financial investment in education and research, any large corporation can (and has) implemented their own version of the Bitcoin blockchain. There are many developers that have released their own slightly modified versions of the Bitcoin protocol (collectively called “alt-coins”), where developers have experimented with literally thousands of new and exciting cryptographic implementations.  In December of 2013, there were less than 200 alt-coins [for one of which the author is the lead developer].  By December 2014, there were nearly 1,500. It has already become a vast field of knowledge, but the value in investing the six to eight months to become versed in all of the various successes and failures is a well justified expense.  The failure rate of various economic designs is on the scale of natural selection, with nearly 99% no longer functioning.  All of them were well thought out with great marketing and promotions, but…

3. What looks good on paper often doesn’t work well in the real world.

2Viral network effects were invented by the music industry, not Silicon Valley.  The hype around an artist or performer and the effect their presence creates in a room is not unlike how some view Bitcoin, blockchain technology, and the effects that become possible.  Getting “tech-struck” is new for the music industry because the advanced mathematics is as a mystery to them as the ability to create a hit record is to a software developer.  The same sort of tactics have already begun to be employed in regard to music and the blockchain to manufacture a viral network effect and make blockchain projects look bigger and more successful than they are in reality.  This is a function of the fact that the problems of the music industry are well known and the balance of power within the industry promises to shift based upon whichever solution finds the widest adoption.  When one views the problems of the industry with a more holistic point of view, it becomes painfully obvious that the issues of royalty splits, content copyright establishment, and metadata are truly the low hanging fruit.  As a highly technical person introduced to the music industry two years ago, what has been revealed through my experience is that the problems solved by current blockchain designs are a symptom of greater problems and simply trying to fix it in a blockchain is akin to taking painkillers with the hopes it will cure a profusely bleeding wound.  What then becomes relevant are the subsequent costs of litigation and enforcement in the gaps these systems inevitably create.  Many of the cryptographic proofs involved in existing and proposed methodologies have not yet been tested in a court of law and the willingness to secure millions of dollars of content on such systems is equally lacking as a result.


The music industry has been repeatedly reshuffled into the mess that is what we see today.  Artists and performers are continuously on the losing end of negotiations, and simply because your royalty split is on a blockchain, that doesn’t mean the publisher or online distributor isn’t still taking the lion’s share. In blockchain systems proposed by these entities, a truly egalitarian system threatens their bottom line and will be a solution in name only… a painkiller, not a cure.  Any system which is created must benefit all stakeholders in the music economy, slanted towards none but the creative minds that are able to generate the content that gives everyone else a reason to exist in the first place.

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1 Comment

  1. Interesting indeed! Bitcoin’s future price is very unpredictable but It would really sky rocket very soon. Probably 3-4 years from now, a bitcoin will be on 4-5 figures each. Buying as early as now is a good investment. There are plenty of ways you can buy bitcoin though and one of them is if you are outside US and Canada. They offer several withdrawal options too and they just re-launched their XMLGold card that helps people withdraw their bitcoins easily.

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