Musicoin

 To me, it's a mystery why the music industry, a pride of 20th century, withered and corrupted within last 15 years. Has music become less important to people? Maybe obsolete? Actually not. Researchers even point to its growing importance and increasing popular demand due to benefits music offer to modern society in terms of relieving stress and helping remain sane in day by day faster spinning reality (see for instance researcher and author Olivier Sacks and many more in this area). While music importance is beyond dispute there is growing popular awareness that the structure of music industry is heavily crippled.

Market is polluted by almost algorithmically generated “creations” with recurring motifs that were found most attractive in researches (2-5-1 and alike). Vocals boosted with autotune and no more resembling real human voices (to hide mediocrity of performers). Texts written probably by monkeys as they reflect monkeys IQ. Performers are often not worth mentioning, they are just disposable like plastic dishes. All wrapped in shiny packages, boosted with commercials and made up hypes and sold like cheap doodles.

Meanwhile, experimenting and creative people have almost no chance to become visible in this mess. Not being able to pay for promotion and being too “ambitious” for main players to be invested, they cannot make their life out of their creations and performances.

We need better music - it’s actually just around the corner. The only thing it needs to appear in full lights is access to wide public and fair incentivization.

The current music industry model is doomed. After years of selling worthless pulp and seeing only regression it should be clear that there must be a better way. But people tend to be conservative in their stances. They will fight using legal instruments, aggressive marketing, putting more money in shows. It pays off in a short run. The same has happened many times before - remember inter city horse carriages lines during Industrial revolution. They fought for years with those ugly steam locomotives, using methods similar to mentioned above. Guess how many such lines exist today? Zero. They probably realized their fate only after selling last horses.

We need to fix the industry, or rather offer a replacement of this current, obsolete scheme. Replacement that will take care about long forgotten grassroots of this area of human activity. That will return full power over creations to creators and introduce fair trade rules.

What's wrong with music industry

For an average person music comes from a sort of black box, from nowhere. User sees distributor only, has no contact with actual creator. This black box comprises of few top brands that are maybe known to user and lots of smaller ones that users never heard of. These brands “represent” creators (or even manufacture them). The problem here is that creators have actually no choice whether they want be represented or not - they must comply to enter the market.

Big labels hold licenses, therefore being an actual monopoly, they are the main reason of corruption of this industry and cause of an ultimate future fall of the current scheme. To add insult to injury due to resources held by this monopoly there is no chance for smaller labels to effectively undermine this copyright holding scheme.

However, those who watch carefully can already spot cracks that started to appear on the monolithic face of big labels. Despite reported growths in streaming and adjacent areas (electronic distribution), if calculated against current operational costs, numbers diminish from year to year. This causes increasing anxiety and panic moves in industry that has apparently no idea what to do with this problem. So, instead of changing schemes they harden their politics with respect to advance payments and licensing fees. This would probably hold for next few years before the climax.

Holding licenses like hostages isn’t the only issue here. As in general the only creative move of decision makers in big labels was choosing between managerial studies on Harvard and Yale they have little to no understanding what creativity actually is. Thus they hamper interesting and innovative artists via “Chilling or Catalyzing” effect. To put it in clear text - write off everything above standard, censor yourself or die.

Suppression of innovation isn’t the only sin to be attributed to monopolistic labels. What is more sad, due to restrictive license agreements, artists are reduced to poorly and not timely paid forced labor. Cash flow from user to artist is never transparent nor explainable in real efforts. It’s arbitrary and obscure. Artist must just produce acceptable, neutral music and conform to payment habits of the label. Which is why a need of fair trade is mentioned above.

With present scheme there are also issues independent from big labels. In last year streaming became one of leading distribution channels of music due to popularization of mobile devices and data exchange in IoT. However data transfer isn’t free, due to ancient architecture of Internet and protocols serving it it’s actually very expensive. So expensive that music suppliers serve it in quality lower than in pre-Internet era. As many people cannot remember so distant past they hear no difference. But the fact remains - they pay for low quality product without even being properly informed about it. More, this practise hampers perception of music in a way that causes most of productions sound almost the same.

New Model

The most prominent pathology of the current system is its unfair nature stemming directly from monopoly of big labels. Thus, while opening a blockchain based label would seem a no brainer, as it’s usual with no brainers, it would not yield any innovation. More, if successful it would probably corrupt very quickly.

To return actual powers over creations to creators and make a system where all participants can benefit according to their actual efforts, a brand new model must be worked out and applied. Model that would ensure that no participant has a privileged position just because of waving a paper with “license” word written on.

This does not mean that licenses should be excluded from the new model - on the contrary, licensing system is its crucial component. What differs is no support for parasitic entities as access to public and funds is direct. More, the model is open and free to enter, thus no self proclaimed bouncers can exist.

The most essential element of the new model is a ledger that will keep track of every event in music piece’s lifetime - from first publication, through sharing, sublicensing, remaking up to it’s expiry if set. If not, the ledger will record changes indefinitely.

The above would sound crazy even few years ago, but with advent of blockchain and its successful verification as a reliable medium it’s now absolutely possible. Blockchain has also multiple qualities that would further benefit the new model. To name just a few:

• It’s borderless, or rather borders independent, thus enabling worldwide spread of this idea;
• It has no central authority, thus there is no entity that could authoritatively alter its functions;
• It’s privacy-proof if its particular iteration is designed to be, in the new model privacy should be enforced to let both users and creators decide to which extent they share their life with others;
• It’s most tamper-proof of human creations - there is no actual way to change the ledger even a bit without conscious consent of 51% of users. Which is extremely hard to accomplish as Ethereum’s case showed most prominently. This ensures that entries into the ledger will be genuine and independent from will of even big players.
• It’s transparent if designed so - all transactions and interactions can be clearly visible in the ledger. The new model would encompass this transparency to ensure as full as possible information about internal chain’s transactions - in such environment no monopoly has chance to survive as they base their existence on information control and rationing.
• Blockchain is able to handle complexity of this industry. In this particular case of music related issues it can not only handle but also augment it by making a link between human relations modeled by contracts and technical layer of actual content serving.
• It's is also important that smart contracts in blockchain give also possibility to further extend the scheme without affecting its base caveats.

Our proposed new model comprises of four essential and one optional layers built into the blockchain in form of contract and/or protocol. In short they can be presented as follows (they are explained in detail further in the text):

• Sharing Contract referred hereinafter as SC is responsible for content flow and exchange and is basis for further layers;
• Transfer Protocol (optional) referred hereinafter as TP - bounds music pieces data bilaterally with blockchain records and manages data availability to ensure fast and reliablie data exchange;
• License Contract referred hereinafter as SC - this layer follows created music pieces and interact with other contract to ensure that music creator’s intent is terms of license conditions is followed;
• Catalog Contract referred hereinafter as CC ensures existence of an unified register of music works accross the blockchain.
• Playlist Contract referred hereinafter as PC is a tool contract enabling users build their playlist based on the catalog.

The above structure would enable three essential features. First it will make possible for seamless fees acquisition via micropayments to contracts. Second, will ensure elastic yet transparent licensing scheme in which creators play the most prominent role. Last but not least will provide means to ensure availability and fast access to media content which is by far one of most important issues in the industry.

Sharing Contractor

The flow depicted on this illustration can be described as follows:

• Alice publishes her media content using Sharing Contract
• Alice serves the first encrypted copy of her media content
• Bob executes the contract and gets a copy of the content from Alice. By executing contract he pays her a license fee
• Bob can further serve an encrypted copy of content as well, by linking to the contract
• Carol has chosen to get her copy from Bob. As it's performed via contract both Alice and Bob are incentivized. Alice gets her license fee and Bob gets sharing fee. To make sure that the price never favours direct distribution channel all fees are balanced to ensure incentivization of all participants.
• Other users took different paths to get the content. All got the same music piece for the same price, however from different sources. Every time the creator gets a fee.

The design above will bail out the long time demonized p2p music sharing as an infringement of music copyrights. Our design turns p2p sharing into the best ever copyright enforcing tool as this way every participant is financially motivated to share and pay fees, because resharing yields profits. The only group that can be dissatisfied with this approach are monopolistic parasites, which is actually one of lateral aims of this project.

With SC, everyone can become legally a sharer and serve as content providing node, and be fairly paid because for helping maintain a distributed resource.

In theory SC could be enough to share any unlisted, private and non-infinging copyrights content legally (in many jurisdictions). However, to further strenghten the scheme in it's legal aspect and to enable mutual payments indicated above there is a need to supplement it with licensing solution.

License Contractor

Our design makes it obligatory for SC to be amended with LC. If no LC is specified by a person introducing own content via SC, the default LC is applied. This serves two purposes. First, it ensures that the creator of music consciously decides about own creation's lifetime and rules upon which it's served. Furthermore, it makes possible for appropriate fees calculation and their potential redirections.

The flow depicted on this illustration can be described as follows:

• Alice attaches an LC to SC of her content. If Alice omit this step the default LC would be attached
• Dan, who entered the sharing contract with Alice (or with any of her sharers) must accept also the LC that comes with SC
• Based on the LC Dan pays the license fee to Alice. Pays also for sharing if received the content from sharers
• Dan can either only consume the music piece or consume and share it further

This contract is a core of the whole Musicoin model. It enables mutual payments and definition of specific rules. This way the creator can include certain restrictions, define the expiry date of own work (after which it will no longer be available), cede his financial rights on a third party, define minimum fees for sharers (that will be subtracted from creator's fee), define maximum depth of sharing and many more. However, creator must conform to some general rules, as for instance, cannot forbid sharing of own content via Musicoin network.

Musicoin will provide creators with a set of predefined licenses for convenience.

Catalog Contractor

The CC is a contract that serves as a global register of verified music works. Verification is performed by a distributed team chosen by the community which aim is to check whether the person who applies to have own creation popularized is an actual creator and no infrigment of copyrights takes place. Catalog is the only way to have widesread coverage over the network. It's paid service, but the payment is meant to be minimal.

We are sure that every legitimate creator will love to join the catalog as it enables being visible outside of network via web interfaces.

The flow depicted on this illustration can be described as follows:

• Alice applies to CC.
• CC staff verifies positively that Alice's authorship of submitted music piece
• Dan finds Alice's music piece through one of web interfaces or applications
• Dan decides to join the contract with Alice and buy her music

The main purpose of the above CC is to provide a "social consensus" as to authorship and ownership of content. As this process must be performed in "material" reality instead of virtual, it would require some manpower to complete. The outcome of this process will be available easily via web interfaces and APIs.

All derivative works will be linked to the original providing an evolutionary trace of music. CC will expose all important data of a music piece, such as price, license details or genre, to general public.

This tool will also give more general view enabling looking through the whole music world, seeing market trends, changing public music tastes, changing licensing rules.

Playlist Contractor

This PC is a helper tool contract for both curators (for instance DJs) and regular consumers enabling them to select and organize content according to their wishes. This contract fetches data from CC and further from respective LCs and SCs.

The flow depicted on this illustration can be described as follows:

• Carol gets favourite music from CC (catalog) and push them into newly created PC
• She then shares her playlist with Dan
• Dan reads her PC and accesses music listed in
• If Dan has never listened to these music pieces he can enter respective SCs to obtain them

While PC is a convenience contract it differs from other playlists concept by being an active structure that further enables fetching data and music piece details. Updates to expiry of some pieces will be immidiately reflected in CC and therefore in all PCs built upon CC.

Privacy and copyright

Today most Internet activities are a threat to users' privacy. Users no longer have control over data that is collected about them by third parties. Music distribution isn't exception here - actually metadata about users' searches in the web lets distributor offer targeted content. It wouldn't be a negative factor if not used to manipulate users' music taste by adjusting availability of certain types of content.

Blockchain technology in this respect is totally different - depending how it's designed it can offer different levels of anonimity, mostly outreaching those available elsewhere.

In Musicoin, the privacy model is meant to be strict with respect to regular users. However, when it comes to creators wishing to be included into CC they will have to expose some details to be positively verified as authors.

This privacy model wouldn't affect prevention of copyright infrigement as without being registered in CC author can only share privately, while upon entering CC becomes subject of public scrutiny. This way safeguarding copyrights is possible even while keeping users anonymous.

Musicoin blockchain would be surely much more easier for users to interact directly with copyright owners.

Network and incentivesor

To make the model really work we need a network to support it. Setting a genesis block on blockchain is easy, getting nodes interested in participation isn't. We opt for evolutionary development - first adopters will recruit from avant garde musicians and avid listeners. Then, with growing number of music pieces in blockchain, more users are expected to join.

Since we count on early adopters ideological approach they will act as a very devoted first tier of marketing. More, since Musicoin will be also a digital currency, this will further motivate early adopters to join, sometimes for reasons not connected to music per se.

It's also a great opportunity to demistify peer to peer sharing and remove the tag so easily pinned to it - "piracy". This peer to peer sharing is intended to be legitimate and in fact focused on safeguarding copyrights.

Economy

It's debatable whether the supply of Musicoin should be capped or left to grow on a certain pace. Setting a cap would make it deflational, which could cause music consumption become unbearable to consuments. However this can be mitigated with letting contracts adjust the price to supply. On the other hand, an easing strategy to constant coins supply poses issues with actual pace that must be chosen in advance. While attractive at a first glance it can be risky in the future.

Conclusion

By creating a blockchain-based new music transaction system, it’s possible to solve the chronic disease of current music industry. The coded contract will ensure every transaction not only be recorded, but will also make sure that they reflect the creator’s will. Elimination of many unnecessary layers on profit sucking will assure a more healthy industry. At the same time, the security mechanism attached with such an open system will ensure privacy of consumers as well, which is the most important measure for future soc