We are seeing streaming services rise again however the streaming services themselves are coming under scrutiny with regards to the percentages they are paying out. That is to say we even saw some streaming giants go into legal proceedings hence with songwriters themselves. This is leading to a real trust gap widening.
“Middle Men” Contract
The contracts that artists signed with “middle men” or intermediaries such as record companies, music publishers, broadcasters, banks, streaming platforms so as even social media platforms engage within the law makers of any national state government. Meanwhile the artist has to instinctively trust that their rights will be accurately enforced and protected.
The issues that arise have massive financial, accuracy and time inefficiency repercussions. Not to mention the copyright disputes and false claims that copyright societies face.
The same issues exist within the banking sector, accounting and healthcare and every other industry.
Immutable Distributed Ledger
Blockchain and the Music Industry Smart Contracts are basically an immutable distributed ledger.
Immutable, meaning it can’t be erased.
Distributed, no single computer can decide, a network of computers around the world that have to work together to decide.
Ledger, it’s a table of data which contains information.
Cryptology: the Magic Ingredients
What makes this technology work is cryptology, it’s the magic ingredient of the blockchain.
Think of blockchain as a history of transactions. This is a lot of math but when combined and built on technology platforms like Ethereum you can build DApps, Decentralised APPlicationS.
Smart Contracts are pieces of code that codify business logic. And at the core they do three things:
- Store Rules;
- Verify Rules;
- Self Execute Rules.
Because they are a blockchain application there is no intermediary, government agency or legal entities. They are wholly automatic and secure.
The financial sector, healthcare sector, Internet of things (IoT) and indeed music industry will be revolutionised by this innovative step forward.
Closing the Trust Gap
Smart contracts are very good at storing data anonymously, with user data security and privacy as high priority, this problem is solved by using blockchain.
Smart contracts manage the issues surrounding trust.
Blockchain is going to change the way we trust. How we trust each other, how we trust in business.
If you have trust, you will transact. Trust is the fundamental currency in commerce. Trust itself is delicate, poignant and central to all relationships. When we exchange trust we as humans are essentially manufacturing trust.
With all ledgers we have to trust that it’s tamper proof. Before smart contracts there was always a trust issue with ledgers, record keeping and reports.
We would use trust-but-verify systems. Meaning we would establish intermediaries (middle-men) responsible for all transactions, music publishers, collection societies, broadcasters, record companies, streaming platforms and banks.
Blockchain ledgers have secure un-hackable keys attached to each ledger which holds information then enabling a “chain” of keys and records or “blocks”.
One record or ledger is dependent on the one prior and post. This makes the blockchain ledger system tamper resistant with the use of algorithms to identify tampered records and the immutable distributed ledger comes into effect.
We believe that “trust companies” will replace all existing companies. Thus that is the paradigm shift that for instance Nada Brahma has recognised. Nada Brahma is amongst a generation of “Trust Companies.”