Canadian Musician - November/December 2017 | Page 38

WILL
B
L
O
C
K
C
H
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N
CHANGE
THE
“Something is broken, and people can
either choose to be arrogant about it
and not admit these problems and
pretend like they’re rock stars, or they
can all stand up together and say,
‘There is something wrong
and can we fix it?’”
-Musiconomi’s Brian Byrne
F
or those not
immersed in the
world of web-
based technolo-
gy, blockchain is
a difficult thing
to wrap your
head around. It’s
a nebulous con-
cept that is simple on the surface
but deeply complex in its details.
By way of comparison, for
those older than 35, it’s like when
you were introduced to the inter-
net. Maybe you understood its
uses – email, websites, etc. – but
how it worked was likely difficult
to grasp.
Blockchain is like that. Its
applications are fairly simple to
understand, but its inner work-
ings require a great deal of study
(and a PhD-level knowledge of
cryptography). And as with the
internet in the early-‘90s, those
who ignore or dismiss blockchain
are likely doing so to their own
long-term detriment,
while those who em-
brace it and help guide
its adoption will benefit.
The recorded music
industry, unfortunately,
has a history of ignor-
ing and dismissing. We
know how that story
plays out, so what will the story
arc look like this time? Blockchain
is here, and a heated debate is
underway about its potential uses
and implications for the music
industry.
Will it disrupt, or will it enrich?
That depends on your perspective.
MUSIC
INDUSTRY?
By Michael Raine
38 • C A N A D I A N M U S I C I A N
In the simplest terms, a block-
chain is commonly described
as a decentralized, secure, and
unalterable digital ledger or da-
tabase that keeps a permanent
record of all transactions. On this
ledger are “smart contracts,”
which lay out the terms and costs
of the transactions. Those smart
contracts can be amended, but
all previous versions remain on
the blockchain. Because there
is always a complete history of
transactions and changes to the
smart contract, the open block-
chain technology is inherently
more transparent and secure
than the current system of closed
contracts and databases.
A common analogy is to
think of blockchains as Google
documents, while traditional
databases and ledgers are Micro-
soft Word documents. A Google
document is open, meaning
multiple people can access, view,
and amend it at the same time
and a record of changes is kept.
A Word document is closed and
its most recent version can only
been seen and amended by one
person at a time, with no record
of changes kept. A common use
of blockchains is for financial
transactions using crypto-curren-
cies, like bitcoin, which allow for
two people to conduct a financial
transaction that is secure and
transparent without relying on
intermediaries such as banks and
governments.
(If you would like a deeper
explanation of blockchain, there
are countless articles and videos
online that can help. For this ar-
ticle, we’re more concerned with
blockchain’s possible applications
than with how it works.)
Currently, there are generally two
camps of blockchain proponents
in the music industry. There are
those who see blockchain as a
way of facilitating more direct
artist-to-consumer engagement
and commerce, which diminishes
the need for intermediaries like
record labels, publishers, and
performing rights organizations
(PROs). Those are the disrupters.
The other camp sees blockchain
as a way of strengthening the
traditional music industry by
making it more efficient and
transparent. By using smart
contracts to cleanse data (i.e.
improving metadata by eliminat-
ing the need for multiple closed
databases that aren’t in sync),
this second group wants to use
blockchain to streamline music
licensing, tracking, and royalty
collection.
“Blockchain as a tool has
certainly proven its durability
and worth. There are lots of
industries that are using block-
chains. Blockchain for music, I’d
say, is still untested and I think
… the reason why we don’t have
a lot of examples to point to as
successful blockchain-based
music companies or start-ups, is
because people are trying to boil
the ocean. They’re trying to ask
too much … of the current tech-
nology,” says George Howard,