Peer-to-peer music file sharing is not a new concept. The original iteration of P2P music sharing, Napster changed music forever through its use. BitShares Music extends the ideas pioneered by bitcoin and Napster into issuing trust-free digital assets. These digital assets have the potential of fluctuating in value through sales of the artist’s music. They can also be used to fund the artist and reward the buyer.
With the rapid growth in technology, piracy has become a serious problem for artists who would like to make a living from their music. Often, the problem has not been one of paying customers, but one of the conveniences that come with pirated music. Products such as iTunes have demonstrated that people are willing to pay for music if it can be made convenient enough, or more than pirated copies. In addition, crowdfunding websites such as Kickstarter have also demonstrated that people are willing to support an idea without getting much in return, so long as they are guaranteed that the funds will be used for the right purpose.
Bitshares brings all these ideas together. It is an experiment that pushes the envelope in the new peer-to-peer music market. It creates a decentralized exchange that uses a blockchain to create fungible digital tokens that are tied to the artist’s profile. Bitshares Music has units that can be transferred much in the same manner as bitcoins. These units are known as Notes.
A musician who uses BitShares Music would be able to create 10,000 tokens. For the purposes of the example, we shall call the tokens artistcoins. He will then be able to sell or give away the tokens to his fans so as to fund his or her career. Each single artistcoin that he creates is recorded in the BitShares Music blockchain.
The musician can set the price of his artistcoin. The income generated by his fans buying the artistcoins goes to the musician thus funding his career much, in the same way, like any other crowdfunding website works. The model would enable more artists put their music online since there is an incentive for fans to pay for the music. Rather than fans simply downloading torrent music, they are now able to buy it through the BitShares blockchain.
By buying an artist’s artistcoin, a fan would be investing in the artist’s success. In turn, each time the song is purchased, the new artistcoin holder can see the value of his portfolio rise and can cash out at any time. In addition, a fan can buy an artist’s artistcoin for speculative purposes, hoping that he might make something off it in the future.
One big advantage of the BitShares Music blockchain is that it eliminates the middleman. Often, most revenues end up with the companies that produce the music. In addition, the record labels sometimes end up becoming gatekeepers, deciding who rises to the top.
With the BitShares Music blockchain talent discovery is made much easier and is done peer-to-peer. It is heartening for struggling artists who would not be able to make a mark in any other way. They can now create new niches and even new genres of music, and market their music directly to their fans. It is also possible to market globally and directly as well.
If the BitShares Music blockchain model works, it will open several other possibilities. The concept could be extended to video and other services. It has the potential to completely revolutionize the entertainment industry in much the same way as bitcoin is doing with the financial industry.
Images from BitShares and Shuttertock.