Musicoin ($MUSIC), a free-to-stream distributed ledger technology solution to issues pervading the modern music industry, is an ambitious project – so much so that its current white paper has the coin’s fourth stage of development titled as ‘Life on Mars’. They want to make what was previously thought impossible, possible. Musicoin’s developers need to be ambitious, as do music industry incumbents and their competitors.
It uses pay per play (PPP) smart contracts to deliver $MUSIC direct to artists. Modern musicians flounder in fees and compliance – one may recall that the situation in the 2000s got so bad that, through the RIAA, musicians sued over 30,000 file-sharing consumers.
They’re doing well so far – the team has even anticipated the developments in the Music Modernisation Act. This new legislation will, inter alia, create a central entity to make the licensing of songs easier, giving songwriters and publishers increased digital rates. The platform provided by Musicoin offers services similar to this with added benefits.
The Musiconomy’s UBI
Underlying Musicoin is Sharism, the philosophy of founder Isaac Mao. Sharism purportedly overcomes the limits of the individual’s isolated intelligence. People reorient their values towards the community to create a “highly-intellectual social brain”. The musiconomy’s universal basic income (UBI) pool, one creature of this ‘social brain’, is at the musiconomy’s digital heart. The ‘musiconomy’ is the ecosystem in which musicians, consumers and miners act and interact.
The UBI pool is contributed to by third-party partners, users and hardware built on top of the Musicoin blockchain. Of the funds contributed to the pool, musicians draw 15.9%, miners 79.6% and an additional 4.9% is withdrawn for R&D. This binds the community to the project’s success.
Whilst the ‘social brain’ appears to have been created by the team, as opposed to generated by the entire community’s values, the effect is nonetheless the same – musicians remain committed to the platform because it delivers the funds to flourish. Giving miners, who are at $MUSIC’s infant stage, high payouts has artificially kickstarted the musiconomy. This combination of musicians and consumers seems to have created a solid and sustainable core base of users from which to develop Musicoin. The best musicians are rewarded by user tips. Currently, the tip to PPP income ratio is 5:1.
Prima facie, this sounds good. All income goes to the content creator with minimal hassle. But how does it compare to other streaming services?
Currently, it’s doing great. Musicoin’s white paper, citing research by The Guardian’s David Byrne, highlights that Daft Punk had nearly 105 million streams of ‘Get Lucky’ when Byrne’s article went to press in October 2013. Despite their worldwide acclaim, the duo had made only $13,000. They made so little because 97% of their profits went to their record label. If Musicoin had the scale for this many streams, the group would have made $2.1m. Musicoin pays artists, signed and unsigned, $0.0200 per stream. The highest paying incumbent, Napster, pays its signed artists only $0.0176 per stream. Of course, Napster has a monthly subscription fee, whereas Musicoin does not.
Musicoin: Why Can’t This Be Love?
Despite having set the foundations for success, Musicoin is not without its issues. Foreseeable obstacles for future consideration include fully functional fiat on-ramping and atomic transactions on the Lightning Networks. The former is needed for musicians to be able to cash out and non-crypto users to cash-in with fiat currencies. The latter will open the musiconomy to many more users in the crypto space as they’re able to trade their BTC for $MUSIC and vice-versa with very low fees being paid for instantaneous transactions.
At present, the most pressing issue is that of the quality of exchanges that $MUSIC holders can trade their coins on. Currently, $MUSIC is traded on Bittrex and Cryptopia. The former is essential to $MUSIC’s success.
That may not be the case for long. CoinGecko details that 92.38% of all $MUSIC is traded on Bittrex. Bittrex’s subreddit is inundated with users slating the exchange as a scam. According to users, Bittrex is delisting coins and freezing user wallets. Of course, scalability issues may explain why they’re locking user accounts and are delayed in responding to support tickets.
Yet, Bittrex hasn’t tweeted since 6th January, despite making some retweets. Their latest retweet suggests they’re having problems with the Commodity Futures Trading Commission. The CFTC is tasked with overseeing the US derivatives markets. Cryptopia, dealing with only 7.62% of $MUSIC transactions, has dealt better with scalability issues than Bittrex. Nevertheless, it has struggled with scaling online and offline. Since December, the exchange’s userbase has grown by more than 240%, with Cryptopia’s own team expanding from two friends to over fifty employees.
Early January’s demand was so high, the developers were forced to close LTC and DOGE base markets. Yet, unlike Bittrex, the team are transparent about their scaling issues. They have released statements on their website and set out plans to tackle current issues. Cryptopia has an online marketplace, where goods can be purchased with digital coins and tokens. Is this the perfect place for musicians to trade their merchandise and retail tickets? There is most certainly the possibility that they will do so.
As Musicoin grows, and if the Cryptopia exchange can handle the increased traffic, it looks like Cryptopia will be the exchange on which $MUSIC is traded most in the future.
Everybody Wants Some
Musicoin is dominating the crypto music space, but others are close behind. AudioCoin no longer poses much of a threat to $MUSIC, but Voise (another cryptocurrency) is a worthy challenger.
AudioCoin runs a hybrid proof-of-work/proof-of-stake script open to anyone who wishes to build on it. However, Musicoin’s growth has pushed Audiocoin aside. Why go the trouble of building another blockchain-based music streaming platform when one would have to deal with powerful incumbents like Muiscoin and Voise?
Voise, built on the Ethereum platform, is a more worthy challenger, and as of January 2018, poses a threat to Musicoin. Voise, like Musicoin, gives 100% revenues to artists. Voise has a secret weapon too. It allows users to tip both in fiat and Voise thanks to fiat on-ramping technology.
This will make the onboarding of listeners enthusiastic to help musicians much easier. Whilst Musicoin is cornering the market faster than Voise thanks to its headstart, Voise has a stronger base for growth as it is built on the battle-tested Ethereum blockchain and is already listed on six exchanges compared to $MUSIC’s two.
Musicoin, if it can sustainably scale from the relatively stable base built by the developers, might well be the next Spotify of the cryptosphere. The model detailed in its white paper underlines the genuine benefits it offers for musicians and listeners. One would not be so enthusiastic so as to say it is the next Spotify of the music industry. Musicoin’s developers optimistically hope for 1 million users by 2019. In June 2017, Spotify had 140 million users. Moreover, as Voise has shown, incumbents aren’t the only platform Musicoin developers should be worried about.
This does not, however, mean that hopes for $MUSIC should be set aside. Medium and Digitial Music News both covered the Volareo speaker last week. This speaker is hardware that is built on top of the Musicoin blockchain, giving users the option to tip $MUSIC to artists. Innovations like this are a major step towards ‘Life on Mars’, the seemingly impossible feat of rewarding those who deserve it the most: the musicians.
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