Tracing the origins of a dollar bill to its final destination is next to impossible, and various currencies are involved. A recent innovation in payment technology, blockchain, could change all that. But how does it work? It has since been adapted for other uses and can be used to issue payments, manage contracts, or track property ownership, among many other applications. Apart from the music industry, you may also read articles about other industries that use bitcoin the most.
It works by making incremental updates in transaction blocks called “blocks,” which are scattered across computers around the globe so that no one computer holds all the information (aka decentralized). This technology also brings users new solutions like censorship-resistant, tamper-proof, verified contracts.
Imagine if you could have a wristband that issued you all your payment options. That's what blockchain is trying to do, and it may lift cryptocurrency payments to an entirely new level. Until now, Bitcoin has been the most popular of all cryptocurrencies, with a worldwide market value of over 1100 billion USD as of October 2022.
In turn, this has led to the demand for other coins. Part of the problem is that there's no real unified global currency around which people can easily exchange their hard-earned money, meaning too many currencies are being used. Using blockchain for the music industry is an idea that several startup brands are exploring. Blockchain can complete this process in the music industry by allowing musicians to quickly exchange their digital assets for cash without an intermediary or mediator.
Music Giants are using blockchain:
Organizations like Sony Music and Warner Music Group have already experimented with blockchain for payments and distribution. With the usage of blockchain in the music industry, artists and producers can move their work to the blockchain easily and quickly. Blockchain also promotes transparency in transactions by recording which information is shared with who, when, and how they use it.
Since no single central database or point of failure exists, musicians/producers could expect greater security from their records. It also means that musicians and producers can access new funding options without paying for expensive intermediaries. If artists want to release their work in more than one country, blockchain can handle this, too – through intelligent contracts. With blockchains in place, it's easy to get global distribution for music and digital media payments.
Use of NFTs by music artists:
A Blockchain-based system could also be used by artists who want to release their work digitally. As a result, the current stock-exchange system of selling CDs would no longer be the only option for musicians. Instead, musicians may release their music as Digital Economic Rights (DER). DERs are permitted and governed by a blockchain system to ensure that music is adequately paid for and accounted for. Once artists own their intellectual property rights, they can offer it as a product on distributed networks without going through any middlemen. In addition, it will allow them constant access to new revenue streams from licensing and merchandising without spending so much time and money on marketing campaigns and promotions.
Crowdfunding music projects:
Crowdfunding is one of the most common ways artists raise money through blockchain. Artists and their supporters can use ICOs, or initial coin offerings, to support music projects. When someone makes an ICO purchase, they are essentially receiving a token that ensures they will get a certain number of future revenue streams from the project in exchange for the money and time they invested.
In this model, artists have more control over the creative process because there are no third parties involved who can decide whether or not an artist receives their funding. In addition, since every movement on the blockchain is tracked through smart contracts, everyone can see exactly how much money was raised and where it is being spent at any given time.
With blockchain, any user can trade digitally available assets fairly and pay the artist directly. In turn, artists will have more creative freedom to decide the number of copies each song will produce, whether or not to add lyrics and what type of album cover to use for their work.
Under such a system, any payment for an artist's work is recorded on the blockchain. It also means that if someone chooses to pay for a song with cryptocurrency, it is recorded and tracked via smart contracts, guaranteeing that the organization or people will pay the artist once copyright holders confirm its use.
Music industry pioneers have already set up platforms that help musicians manage their intellectual property rights and payment without the need for third-party intermediaries. Instead, the platforms let freelancers, or even fans, buy music directly from artists, be they famous or otherwise.
Using Blockchain technology, users can find an artist's work on the platform and pay them directly for a digital copy of the work they can store and use according to their terms. With this method, musicians do not have to worry about going through record labels that take a larger share of their revenue or other intermediaries necessary in the traditional music industry.