Musicoin
Musicoin is a blockchain-based platform and decentralized system that aims to transform the music business by enabling direct payments between artists and fans via smart contracts. It seeks to establish a fairer and more open music industry for both musicians and fans.
The Problem Musicoin Aims to Solve
An antiquated system of licensing, distribution, and promotion has plagued the traditional music industry since it started digitizing in the 1980s and was severely upended by peer-to-peer (P2P) file sharing networks like Napster in the late 1990s. For musicians, digitization has proved difficult, but it has helped listeners with large music libraries from sites like Spotify and iTunes. Artists find it challenging to make a living because the industry has typically kept the majority of profits and pays musicians slowly.
In particular, the conventional model has the following drawbacks:
Unfair revenue sharing and low artist compensation: Intermediaries frequently keep more than 80% of royalties. Singer James Blunt, for instance, claimed to have made just £450 for one million Spotify plays. Due to their much lower pay, many artists are forced to shift jobs or work part-time.
Middlemen: A structure that generally predates the digital age but still exists today, the industry is plagued by a vast number of intermediaries (labels, PROs, distributors, retailers, studios, PR, and marketing agencies) that take significant cuts.
Lack of transparency: The revenue distribution procedure is opaque.
Delays in payment to artists: Frequently, payments are excruciatingly sluggish.
Unsustainable business model: A sustainable and equitable system for musicians has not been established by either the “Torrent Model” (like Napster, which paid artists nothing) or the “Subscription Model” (like Spotify, which mostly depends on middlemen).
With the goal of creating a new era of music that is sustainable, international, and equitable for all parties involved, Musicoin was created to address these problems by reorganizing the entire process from production to consumption and remuneration.
How does Musicoin Works
Musicoin’s answer is based on a number of fundamental ideas:
Sharism Model: This approach highlights the close relationship between rewarding and sharing. Every playback is a direct transaction in which the listener pays the musician to gain access to the piece.
Universal Blockchain for Music: Specifically linked to music consumption, Musicoin is a digital ledger of its own. The first $MUSIC block was mined on February 11, 2017, the day the project was established. The native medium of trade in this economy is the $MUSIC cryptocurrency, also known as MC. Each block generates 314 $MUSIC for miners.
Decentralized Platform and Storage: As a P2P network, Musicoin has no central authority or server. It stores and distributes music using a decentralized file system like IPFS, making it more resistant to censorship and outages.
Smart Contracts and Pay-Per-Play (PPP): The main innovation is this. A “programmed contract” or “little program” also referred to as a smart contract is automatically generated on the blockchain when a musician submits a song. This Pay-Per-Play (PPP) license is enforced by this smart contract.
- Automated Payments: An automated micro-transaction quickly transfers a predefined amount of $MUSIC from the listener’s account or wallet to the artist’s wallet whenever a song is played, activating the PPP smart contract.
- No Intermediaries: Importantly, the smart contracts let musicians keep control over their licenses, and the musicians themselves distribute all of the money no middleman other than the blockchain itself is needed to process the payment. This implies that the artist receives all earnings from a stream.
- Multiple Beneficiaries: Depending on the percentages that the artists specified in the contract, the blockchain can instantly disburse money to several recipients (such as songwriters, singers, and guitarists).
Key Features and Benefits
Key Features of Musicoin
| Feature | Description |
|---|---|
| Decentralized Platform | No record label or centralized authority required. |
| Smart Contracts | Automates artist payments per play. |
| Free Streaming for Users | Listeners don’t pay; artists earn from platform incentives. |
| Instant Payment | Artists receive funds instantly through blockchain. |
| Fair Compensation | Eliminates traditional intermediaries like labels and publishers. |
For musicians, fans, and the larger music industry, Musicoin provides a number of benefits:
Fair and Instant Compensation for Artists: Bypassing the costs and hold-ups of conventional middlemen, musicians are paid directly, immediately, and fairly for their work.
Transparency and Trust: Anyone in the world may instantaneously access payment information with the blockchain’s transparent and auditable record of every transaction, which fosters confidence.
Artist Empowerment: Musicians maintain complete control over their material and funds, as well as their rights and earnings.
Free Streaming for Users: The Musicoin platform offers listeners ad-free, entirely free music. At first, listeners paid for each play, but Musicoin Version 2.0’s Universal Basic Income (UBI) model makes streaming free for listeners by having miners pay artists from a designated fund. With $MUSIC, listeners may still leave tips for their favourite musicians.
Direct Engagement: By establishing a direct line of communication, it facilitates more personal communication, feedback, and chances for fans to tip artists.
Global Access: Music is consumed and paid for globally since any musician or listener can participate from anywhere.
Innovation-Friendly: Third parties and developers can create a rich ecosystem of value-added products and services, cutting-edge technology, smart devices, and decentralized Applications using Musicoin’s open protocol and APIs. For AI researchers, this includes the possibility of AI-powered music recommendations based on playback history.
Advantages of Musicoin
| Advantage | Description |
|---|---|
| Artist Empowerment | Artists control their rights and earnings. |
| Transparency | All plays and payments are recorded on-chain. |
| Global Access | Any musician or listener can join from anywhere. |
| Innovation-Friendly | Developers can build dApps on the Musicoin protocol. |
Evolution and Roadmap
The “labour of love” that is Musicoin was initially developed on its own blockchain, a fork of Ethereum, and launched without an ICO, pre-mine, or pre-allocation of cash. The goal of Musicoin v1.0 (‘Hello’), the present version, is to employ PPP smart contracts to address the issue of unjust compensation.
A clear path for the project is to achieve the four S’s: stability, sustainability, security, and scalability.
Musicoin Version 2.0 (‘Heal the world’) – Q3 2017: This version introduced the Universal Basic Income (UBI) for musicians, which makes streaming free for listeners by using a pool of money set aside from each block mined to pay for streams. This seeks to increase consumption and decouple the enjoyment of music from $MUSIC’s market value.
Musicoin Version 3.0 (‘Walking on the Moon’) – Q3 2018: By switching from Proof of Work to a Proof of Sharing algorithm, this version aims to create a decentralized content distribution network that distributes $MUSIC material according to user demand.
Musicoin Version 4.0 (‘Life on Mars?’) – Q3 2019: In order to guarantee scalability and a healthy distribution for decades, this version seeks to eliminate the “difficulty bomb” that Ethereum left behind and modify the money supply in response to community input.
In more recent times, Musicoin has adjusted by switching from its own blockchain to an Ethereum mainnet ERC-20 token. In order to increase speed and lower transaction costs, they are also investigating second-layer solutions like Skale. Additionally, they are investigating the integration of Decentralized Finance and NFTs in order to further strengthen the music ecosystem.
Challenges and Limitations
Musicoin encounters difficulties like as:
Adoption: Competing with well-known behemoths like Apple Music and Spotify.
Volatility: The price of the $MUSIC token is subject to change.
Funding Sustainability: Depends on community support or mining incentives.
Technical Limitations: Although Layer 2 alternatives are being investigated to lessen this impact, blockchain speed and scalability can affect performance.
| Challenge | Description |
|---|
| Adoption | Competes with giants like Spotify and Apple Music. |
| Volatility | MUSIC token price can fluctuate. |
| Funding | Sustainability depends on mining incentives or community support. |
| Tech Limitations | Blockchain speed and scalability can impact performance. |
Essentially, Musicoin wants to function as a digital marketplace that acts as a direct connection between musicians and fans, akin to a music farmers’ market. Musicoin enables customers to purchase directly from farmers, with every transaction being transparent, guaranteeing that the farmer receives the full price for their labour, as opposed to several wholesalers taking a cut from the farmers’ produce and leaving customers unsure of where their money is actually going.