How Can Blockchain Resolve Corruption in the Music Industry

written by Rosalie Mosner for Defy Trends

It has not been a secret that the music industry is sometimes corrupt and exploits artists for their money and talent. For more than 30 years, this has been visible as it started with the Warner Bros lawsuit against Prince, ending in Prince losing the rights to his music and his name in the early 90s. More scandals about ownership occurred in the years that followed. These are some issues the blockchain technology can solve.

Let’s review some of the key factors of the blockchain.

  • The blockchain is a shared ledger where data is stored in blocks then chained together.
  • It is decentralized, meaning there is no one owner (,) but ownership is distributed amongst participants.
  • It ensures visibility in that each set of data blocks is accessible and visible in the public ledger.
  • There is transparency within the public wallets and ledgers.
  • There is space for recourse when something goes wrong (rewriting and forking).
  • The blockchain makes transactions and processes easier, cheaper, accessible and increases accountability amongst users.
  • Its data is not stored in one single place, put in each node or computer that accesses the blockchain.
  • The functions of the blockchain are coded with smart contracts where the terms and conditions of the contract are encoded.
  • Because each transaction is visible, the blockchain makes it almost impossible for fraudulent transactions to take place.

Some key terms to remember that enable the secureness of the blockchain are:

Proof of work — refers to computers mathematically proving each transaction that enters the blockchain, the computers are given an incentive to mine which is a portion of the value of the transaction

Proof of stake — a way computers solve mathematical equations to prove if the last transaction was “true” or “false” but their incentive is taken away and replaced with a fee which reduces gas fees

Gas fees — refer to the energy that computers use to proof the transactions

Now, how can blockchain technology solve the problems that artists are facing with the music industry in terms of equal pay and ownership?

According to Coinbase Bytes, Universal Music Group recently went public and showcased their yearly revenue of $53 billion. In 2017, it was announced that artists under contract with Universal Music Group only got around 12% of the music label’s revenue.

With the new developments of blockchain technology, new decentralized online streaming platforms for music, such as Audius and Catalog, have been very popular recently. Audius, the online streaming firm that uses their token, AUDIO, announced that 90% of their tokens will be given back to the artists. The artist’s token percentage is based on the streams and engagement of their fans. This is where their royalties come from. Audius recently also made a deal with TikTok to allow 100,000 new upcoming artists to upload their music on the streaming platform. Holders of $AUDIO gain exclusive content and get a vote on the protocol of the blockchain.

Catalog, which is a new NFT platform that 1confirmation launched in August, is also changing the game for independent artists. In its first month, 100 new artists have already earned up to $213,234 in revenue according to theblockcrypto.com.

Picture from Audius.co

NFTs and blockchain technology is here to give back ownership

These platforms are transforming the music industry and giving the power back to the ones creating the art. We have seen this with NFTs and tokens in general, and music apps are next. We need platforms on the blockchain that ensure there is a community-governed, safe, secure and accountable way of paying participants for their work.

These streaming platforms ensure that artists get ownership of their work and are compensated accordingly based on their streams and fan engagement. This is revolutionary because the blockchain technology can ensure that there are no fraudulent transactions taking place, and everything is visible on the ledger. Royalties are an honest idea that needs to be implemented, more so that the hard work of the artist is recognized and compensated for.

DeFy Trends is a women-founded, all-in-one, intuitive, real-time analytics application and chrome extension that uses on-chain analysis and high tech data science algorithms to provide data insights based on DeFi fundamentals and sentiment. By scraping the web and social media for cryptocurrency sentiment analysis, incorporating real-time market data, qualitative data, and forecasting AI to bring retail and institutional investors state of the art insights on the rapidly growing crypto-decentralized finance markets.

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