Blockchained Melody: The Promise and Pitfalls of Blockchain in the News
Blockchain is IT, the tech twist du jour, and new products and initiatives are springing up in the music industry in quick succession. This week, for example, saw the unveiling of curiously named Choon, which will use blockchain both to power smart contracts that dictate splits and rights, and to let fans pay artists via its own cryptocurrency. There are dozens of startups tackling other music business pain points, particularly in ticketing, where blockchain is touted as an end to scalping and other fraud.
These efforts, often launched by enterprising musicians-turned-tech entrepreneurs, are admirable. Who doesn’t want more transparency and disintermediation?
Like any shiny new tech development, it’s easy to see blockchain as the panacea (or to write it off completely as a gimmick, for curmudgeons out there). The technology is complex; even passionate advocates seem to struggle to distill the value proposition and functionality (unless you consider 22 ways it promises to change things a short summary). Yet all hype and complexity aside, blockchains suggest their own novel opportunities and pitfalls, and even in their novelty, they reflect the broader culture, even as they shift it ever so slightly.
Take this week’s hilarious and strange tales of the CryptoKitties, a blockchain-based virtual cat marketplace that lets user “breed” and trade or sell their cats. The site proved so popular that prices skyrocketed and the Ethereum system on which its blockchain runs ground to a snail’s pace thanks to the influx of kitty-related requests. Scaling seems to be a key issue, for kitties and other applications; would the current blockchain technologies have the capacity to power global music consumption, even if they continue to expand rapidly?
Another is security and stability. Hackers seem to have found ways to steal Bitcoin, and it’s unclear how secure the transfer points from crypto to fiat currencies are. Cryptocurrencies moreover seem prone to wild fluctuations in value. While this doesn’t affect smart contract-type applications, it could have serious implications for musicians and revenues.
The other elephant (CryptoPachyderm?) in the room: The method of relaying data related to a track doesn’t change the key problem of harmonizing who actually owns what. How would disputes be settled? How will musicians, managers, and labels, many of which remain less than perfect at crafting metadata, finally learn to clean up their data entry acts? Blockchain’s esoteric (at least for now) nature could make defrauding a musician with other concerns or vulnerabilities easy. No single technology can address these questions, but they need to be asked as we look at blockchain and the markets and uses it spawns.
Photo by Mikhail Vasilyev on Unsplash