About five years ago, I wrote a column about how bitcoin and blockchain could transform the music business. At that time, the question seemed more How rather than If: An online merchandise store recently started accepting cryptocurrencies, several entrepreneurs founded a startup to use blockchain technology to pay rights holders, and entrepreneur and then-DOT Blockchain CEO benji rogers predicted that “blockchain technology is coming like a tsunami.”
I got suspicious. I called blockchain “a solution in search of a problem” and pointed out that the only person I knew who had bought something with bitcoin was a former neighbor in Berlin who had bought LSD online. At that time the price of bitcoin was $11,631 and the Dow Jones Average was 25,803.
As bitcoin shot up—to a November 2021 high of over $68,000—more artists and music executives became certain that cryptocurrency and blockchain technology would change everything. Artists sell NFTs – as did Board — and in February Coachella sold $1.4 million of NFTs, including 10 lifetime passes to the annual festival.
Now crypto exchange FTX is in bankruptcy, bitcoin is down to $16,099, and the US will almost certainly regulate crypto “banks” and exchanges. In economic terms, this means that cryptocurrency companies may have to compete on an equal playing field with traditional financial institutions, which will reduce risks for consumers, but take away some of the benefits startups get from making their own rules. will put an end to In non-economic terms, Mom and Dad are at home, they’re pissed, and they won’t let you run your business unless you can put on your big-boy pants!
So, what about that tsunami? It’s been a busy five years for the music industry: recorded music boomed, major financial players invested in publishing catalogs, two of the three major labels went public, Latin music found a huge global audience, and TikTok emerged as a transformative source of propaganda. However, blockchain and bitcoin have hardly changed the industry. Some artists made wild money on NFTs and a bunch of companies announced plans to fundamentally disrupt the exchange. But bitcoin is still an inefficient means of exchange and a poor store of value — at best it’s a high-yield, high-risk investment — and blockchain is still a solution looking for a problem.
A little over a year after my column, Benji Rogers, who was of Tsunami Prediction, left Dot Blockchain, which was rebranded as Verify Media in September 2019. The company still helps rights holders track ownership and access data, but it doesn’t emphasize blockchain technology on its website. (The emails for the verified promotional contact came back as undeliverable.) It makes sense: The big problem with authority data has always been that it’s inaccurate or incomplete. Blockchain is a distributed database that allows users to track changes, but it cannot fix incorrect or missing information.
Five years ago, startup Chunn had a plan to track music usage with blockchain and instantly pay rights holders with a digital currency called Notes. It went out of business in 2019, as the notes fell in value along with bitcoin. The following year, Chun co-founded Bjorn Niklas Launched Rocky amid the pandemic and exchanged outstanding notes for Rocky tokens in the ratio of 50:1. (The company also lets independent musicians sell NFTs.) Since then, the “rock” token has gone from a value of around 5 cents, to a high of $5.45 in April 2021 — which peaked when bitcoin — And lost almost a penny. It sounds exciting and potentially profitable, but I doubt most artists prefer to be paid in a currency that holds value.
Bitcoin and NFTs aren’t going anywhere — some investors see “crypto winter” as a buying opportunity, while others just want to HODL. (Art NFTs are doing better than most.) But the collapse of FTX will prompt investors, and hopefully government agencies, to ask more questions about whether celebrities buying and selling NFTs are being transparent about their transactions. are transparent enough – especially since they influence fans can buy into investments in a way that helps those who already own them.
Like many online technologies, blockchain and bitcoin offer utopian dreams of decentralization, free from government regulation and control. When it comes to finance, however, government regulation is not a bug—it’s a feature, to use the phrase technology. Just ask anyone who has money with FTX, which was not insured by the Federal Deposit Insurance Corporation (FDIC) the way American banks are. Among the assets staked on the exchange are the Coachella Keys which give holders access to the festival.
coachella told Board That he is confident that he will handle the issue. But it should come as no surprise that there was no easy way to do this – say, passes with QR codes, or even spots in a database that could be sold in collaboration with event promoters. Is. Blockchain is essentially a distributed database that can operate at internet scale, and it’s easy to see how exciting this is. It’s still hard to see what use the music business could have for this.