Culture

How cryptocurrency is changing the music industry

February 26, 2018

The onset of new financial technology could be music’s biggest disruptor yet.

The launch of cryptocurrency in the music industry is potentially one of the most hype collabs of 2018. Seriously. Hip-hop legend 50 Cent was the first musician to make a crypto fortune this year. The rapper accepted Bitcoin for his 2014 album, Animal Ambition, turning what was $400,000 in album sales to a whopping $7.7M in Bitcoin currency today. He admitted to forgetting the crypto fortune existed to begin with, like we all do right? But, that doesn’t belittle his insight as one of the first global artists to accept cryptocurrency payments.

In their simplest form, cryptocurrencies are digital currencies backed without government involvement. Unlike regular currencies, which historically have been controlled by a bunch of old rich people, most crypto are controlled by mathematical algorithms and depend on independent, self-regulating operational systems. This means banks, music-streaming giants, lawyers, financial services, and of course, your favourite governing body can be eliminated from the process of how consumers purchase music.

Always an innovator, Björk was one of the first artists to realize the potential of entering the crypto-music space by partnering with AudioCoin, and accepting both Bitcoin and AudioCoin from fans purchasing her 10th album Utopia. She even awarded buyers 100 AudioCoins for purchasing through the music-exclusive cryptocurrency. Clearly for artists, the easy availability of different forms of cryptocurrencies signifies a major shift in the industry. Through cryptocurrency, not only can all artists — from chart-topping pop icons to your History teacher’s favourite indie band — now have the opportunity to limit the influence of major labels from their sales revenues, but now, more importantly, there presents a legitimate option for artists to have complete autonomy over their income.

And it’s no longer just a few freethinking musicians who are making the move to cryptocurrency. Monero, one of the largest cryptocurrencies has been targeting the music industry by chasing top icons. So far, 45+ major artists including Mariah Carey, G-Eazy, and Lana Del Rey are confirmed to be accepting Monero on their online stores.  So we get it, musicians are getting down with crypto (and it’s redefining how they’ll make that bank). But, what does it mean for the RihannaNavy, Arianators, and die-hard music fans of the world? If cryptocurrencies aren’t going to go away, and musicians focused on decentralizing their personal brand, how exactly are they going to embrace economics biggest new disruptor?

But could exclusive financial freedom for artists also mean exclusive access to new releases and concert tickets for high-earning fans?

A recent report from Business Insider Intelligence report outlined that a block-chain based model could increase sales for artists by essentially, turning their intellectual property (music) into a financial asset. As we’ve seen major festivals around the world adopt innovative digital currency alternatives onto their grounds, we can further anticipate that in the coming future, musicians might also develop their very own currency and partnerships with major crypto. Having their own currency would not only cut out the middleman, but could also mean fewer rules from their current sources of income and more genuine engagement with fans.

That being said, the growing prominence of crypto also arrives with the potential for negative, unforeseen results. The rise of crypto has the ability to divide fan bases and make music less accessible worldwide in the event that certain forms are illegal (or firewalled) in certain countries. On top of that, music-specific cryptocurrencies may fluctuate exchange rates when a fire new single is released — so that $1.29 single could inflate to over $5.

 

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At its core, music, which has universally been a great leveler of some of society’s many class, race and gender divisions. But could exclusive financial freedom for artists also mean exclusive access to new releases and concert tickets for high-earning fans? In the future, could we see approaches to music become somewhat restricted to music lovers with the disposable income to afford their passion?

In the near future, we may have Gaga coins and Yeezy tokens hitting the web, but the success of these currencies relies on the decision of us fans. So, if your favourite artist drops the hottest album of 2018 but crypto is your only purchase method — are you still a fan?

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