Canadian Musician - November/December 2017 - Page 38

WILL B L O C K C H A I 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,