Music festivals are a big part of the music industry. But where are they going in the future? We’ll be exploring that in our series The Music Festival of the Future.
You’ve probably heard of cryptocurrencies. For the most trendy among us, you might even have invested. But even though crypto might be a few news cycles past, it’s still out there and it’s still a mostly unexplored frontier with far-reaching applications that could bring significant shifts to many industries. Including the music industry.
But before we can discuss this, we need to set up some definitions where we can all work from. First, if, when you hear cryptocurrency, you think “Bitcoin” and then we get into a discussion about finance, securities, the utility of currencies, and Bitcoin’s market price, we’re getting nowhere.
Bitcoin, as you probably know, is not the only fish in the pond when it comes to cryptocurrencies. In fact, although it is still the biggest by market cap, it is nowhere near the most important when tech people talk about the exciting possibilities of cryptocurrencies (an anarchist, maybe it’s a different story). What they’re probably more excited about is the blockchain, the technology underpinning cryptocurrencies. And for a discussion about the practical applications of blockchain in the music industry, we turn to the second-biggest fish in this pond, Ethereum.
Ethereum started in 2015 and its founders set out to solve some of the biggest issues in Bitcoin’s construction of the blockchain. They saw the potential in blockchain, but knew that Bitcoin’s construction wouldn’t be able to scale the way many users were interested in using it. By building (and owning) a template and making a fixed set of rules to building on its network (ERC-20), companies could build their own blockchains without needing to expend the resources to establish a whole new one from scratch.
After all, Bitcoin limits its block creation time to an average of ten minutes and there’s a size limit to each block. This means that transactions happen and are verified only at a rate of about three to seven per second. These are limiting factors in the scale and viability of Bitcoin as a currency. In comparison, a digital transaction in fiat currency, for example, if you swipe a credit card, happens much faster and at a higher volume. Visa estimates it processes around an average of 1,667 transactions per second.
Then there is Ether, which is the cryptocurrency that drives the Ethereum network, and because it allows simultaneous block construction with only one eventually being added to the chain, it can process transactions faster.
Transactions go beyond just exchanging money for goods and services though. And that’s where things really open up. One of these abilities is “smart contracts”. This is a way of automating contracts and agreements so they will execute when consensus says that conditions have been filled. This kind of smart contract is where the vast business potential of the blockchain really shines. Other applications could be enabling payment systems that will release funds on completion of work or authorizing the transfer of ownership of goods when payment has been made.
Another application of the Ethereum network is the ability to create other cryptocurrencies, or tokens, using the same protocol as Ether but on different blockchains, either public or private. This is why many of the ICOs, identity verifications, and potential voting applications exist in the context of Ethereum.
Which is a long-winded way of hopefully explaining what the possibilities could be when applied to the music industry, the live event industry, or even the music festival of the future.
It’s already begun. A big announcement was the creation of Our Music Festival (OMF), a blockchain-powered music festival that has the star-power of having 3LAU’s name attached. The initial idea for a blockchain music festival gives people the ability to use OMF tokens VIP upgrades, merchandise, and food and beverages, which, if your mind is buzzing with ideas after learning about smart contracts, is kind of a snooze-fest
The really interesting part though is buying tickets. The medium of exchange for purchasing tickets isn’t the important part, as much as the ticket industry has a lot of issues because of all the intermediaries that are part of the ticket buying process.
There’s a startup called Blockparty that’s taking this even further. They’re trying to cut out ticket bots entirely by using blockchain as a way to store and verify a ticket purchaser’s identity. They’ve already successfully sold tickets at the Elements Music Festival in Lakewood, PA and there are plans to expand from there. Plus, to really emphasize the fact that blockchain applications are separate from just cryptocurrencies, Blockparty doesn’t even accept cryptocurrency as payment (yet anyway).
The other part of OMF that’s intriguing is that it might not be ready for this edition of the festival, but could exist as this becomes less of a one-off event and more of an ecosystem (or if something does). It basically provides a token reward for feedback and other activity that keep people engaged and participating in the ecosystem. And, if Facebook has taught us anything, having these engaged audiences are valuable and we should probably invest in more of them away from centralized authorities like corporations.
There are even more wild possibilities beyond just fixing what’s broken about the music and live event industries today. CEEK is a company trying to incorporate VR and blockchain into the live music experience. Imagine attending a concert in VR and getting something autographed virtually by the artist. That interaction can be digitally verified so that autograph has value, just like a physical one would.
All this is possible because of the power of the blockchain. Some of the music and live event industry’s biggest issues like ticket scalpers and corporate consolidation at the expense of fans and independent promoters have solutions that are unlocked by blockchain and cryptocurrency. And then the possibilities to innovate beyond solving problems go even further. In some ways, it’s almost a democratization. While the prospect of learning about blockchain may seem daunting, what can come of it is really taking the power away from centralized sources and giving it back to what really matters, the fans and the music.