Beware of the coin men!

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I’ve been reading about Blockchain lately… You’ve probably heard of it, at least you must have heard of Bitcoin, and have heard the latest crypto babble that the media enjoys so much. After all a good jargon is the wet dream of every journalist.

Now this technology is supposed to be the remedy to everything… Yes! Even the music industry! And well, if it can cure that, surely it will cure cancer!

Enter Musicoin and co

In the unsigned world, I see some people rave about Musicoin for example, and how this wonderful platform is going to pay out more than any streaming platform and materialize money out of thin air, without any ads, while still being totally free for listeners. That’s pure magic or I don’t know what!

Turns out that Musicoin is only one of the many new platforms with more white paper than sense, apparently. (Boy! Do they love their white papers! They are all chock full of technical jargon that is mostly included to confuse you even more than you were). Digging a bit, without too much effort, I then found out about other platforms like ArtbyteSoundchain, Emanate, eMusic, Bittunes, Voise, ChoonUjo (this one is funny, with Imogen Heap herself having released her “Tiny Human” song which sales amounted to a grand total of $133.20!) plus all these exotic new “currencies” dedicated to music like Musicoin but also Audiocoin, Songcoin, Metal Music Coin, Muse, Beatcoin… looks like they invent a new coin every day. Check out this website which references 1916 of these entries (as of today anyway!) Actually there is even a platform that allows anyone to create their own! Time for a BeardCoin?

My first contact with Musicoin was from links that some indie enthusiasts were sharing. Being curious I tried to listen, but the player would never want to play, so I went to the website and it looked rather messy to me. Not a really good impression overall. But OK. That’s another beta platform, right? <insert big sigh here>

Since their claim to being able to pay a decent amount per play was pretty extra-ordinary, I decided I would dig further… But I’m going to tell you straight up: I didn’t like what I found. At all.

Monkey money, monkey business

First, the value of Musicoin is in fact so fluctuant that what you read on their platform about the supposed earnings of the artists is never even close to reality. You see, first you have to exchange $MUSIC currency into another more accepted crypto currency (Like Bitcoin or Ethereum), using a convoluted process involving trading on a coin market or another (there are only a couple that can do this at the moment). The process is so ridiculously complex, involving installing a wallet application on your PC, opening an account on a couple trading sites, juggling with obscure hashes and calculating decimals, and gauging whether the time is right to “sell” your precious coins, that only seriously chronic nerds are going to want to go near it. I’m not joking, see this tutorial.

The real cost of Blockchain

The recommended process to ultimately withdraw your few Musicoin earnings is to trade them first against Bitcoin. Of course you will have to pay big fees to do so because the computing of your transaction involves a lot of computers in a pool, and it gets increasingly more complex as days go by, involving increasingly more processing power, and ultimately, increasingly more electricity. Fact is, Bitcoin today is already using 0.5% of the world’s electricity and by late next year, will be consuming more electricity than can be produced by the entire world solar panels. Let this all sink in for a moment. 

And then of course, once you get your Bitcoins fractions, you will have to trade them again on another coin market into some real money, which means a lot more transaction fees (up to 50% from what I’ve seen) and a lot more electricity consumption…

Techno magic

Reading further on the Blockchain craziness, it turns out there is a lot of approximation and misinformation around (but of course there is, it’s a big buzzword in the press, and most journalists have no clue about the underlying technological issues, which are apparently numerous). I also found some articles that took to debunk all this hype, for example this one about eMusic (a Musicoin competitor). Let’s just say that I don’t have all the background that this guy has, but I have the general feeling again (thanks Mom, wherever you are!) that when something looks too good to be true, it generally is! Anyway, the guy wrote a book about the Blockchain scam.

So, to sum up: you get your tunes on a platform that’s pretty buggy (it’s beta), people are going to listen to them for free, you get paid virtual coins that you need to exchange against other virtual coins using a complex process, opening many accounts on various platforms, leaving more of your private information everywhere, trade on a virtual market that is bound to spiral down when all is said and done (remember the internet bubble burst? I do) and is consuming electricity at an exponential rate, which will ultimately eat all our planet resources… what’s wrong with this picture?

The worst of it

All of this and I still have another issue with this whole thing. And it’s another big one: turns out that this whole mess is again making everyone believe that it’s perfectly normal to listen to music for free, that no one needs to pay for it. Aren’t we all tired of this refrain?

If the fact that it’s all based on more hype and technological magic than reality, the fact that it’s unsustainable long term, the fact that it’s endangering our planet resources, if all of that wasn’t bad enough they are also basically saying that music is not worth paying for. 

Finally, the terms of use pertaining to license grants on most of these new platforms were alarmingly similar to the ones I advised everyone to stay away from

In conclusion, you know what? I wish you all good luck with this, but you can count me out. I mean until they come out with something really significant of course, like a BeardCoin for example, at which point I might trade my Monopoly money for it.

11 comments

  • Peter Cox

    Peter Cox Netherlands

    No such thing as free indeed mr. Beard! If one cannot explain it in simple terms, or if it is all tech babble, stay away. That is what 20 plus years in the financial world has taught me. Music has value, whether the "people" see it or not. Already too many getting rich over the backs of the ones that provide the content, meaning the songs and the albums. Yet that BEARDCOIN does has a certain ring to it ;) Keep fighting the good fight!

    No such thing as free indeed mr. Beard!
    If one cannot explain it in simple terms, or if it is all tech babble, stay away. That is what 20 plus years in the financial world has taught me. Music has value, whether the "people" see it or not. Already too many getting rich over the backs of the ones that provide the content, meaning the songs and the albums.
    Yet that BEARDCOIN does has a certain ring to it wink
    Keep fighting the good fight!

  • Ghostly Beard

    Ghostly Beard

    Thanks for visiting, Peter! You're right, there's no such thing as a free lunch! Too many people are too desperate to apply common sense to most of these things, that's why we are in such a mess.

    Thanks for visiting, Peter! You're right, there's no such thing as a free lunch! Too many people are too desperate to apply common sense to most of these things, that's why we are in such a mess.

  • Ross Seddon

    Ross Seddon Australia

    Love your work as usual. Free seems to be the only word we hear these days. Once upon a time there was more to life than sport politicians and Big Macs

    Love your work as usual. Free seems to be the only word we hear these days. Once upon a time there was more to life than sport politicians and Big Macs

  • Ghostly Beard

    Ghostly Beard

    Thanks for the comment Ross! I'm not anti technology, I'm just anti scams.

    Thanks for the comment Ross! I'm not anti technology, I'm just anti scams.

  • Zakk roberts

    Zakk roberts Nashville,tn

    I agree 100% beard i got msg from ppl to check out musicoin and i did not do it i like real money lol but i agree a lot of musicians are going get burned on this coin stuff......not me or you though!

    I agree 100% beard i got msg from ppl to check out musicoin and i did not do it i like real money lol but i agree a lot of musicians are going get burned on this coin stuff......not me or you though!

  • Ghostly Beard

    Ghostly Beard

    Thanks for the visit and the comment, Zakk! When musicians stop thinking, that's bound to happen. And a lot of these so called platforms are preying on that fact to make money. In the end, a few people will get filthy rich from these schemes, but artists are not going to be among them, I'm afraid.

    Thanks for the visit and the comment, Zakk! When musicians stop thinking, that's bound to happen. And a lot of these so called platforms are preying on that fact to make money. In the end, a few people will get filthy rich from these schemes, but artists are not going to be among them, I'm afraid.

  • Juxta

    Juxta UK

    I have to agree with a of what you have said but I also want to provide a little bit of a view from someone who has indeed used these sites and does so on a daily basis. The electricity issue is a big one and is starting to be addressed by using different technologies that are not as resource intensive. Steemit is a good example - there are not "miners" using electricity. Instead there is a pool of "STEEM" that is paid out to authors and curators on the platform. It's a bit like a decentralised Facebook but you don't have to give out any personal information. It's a bit like the industrial revolution at the moment - the first machines are not very efficient at all but this has to and is changing. Also not many people talk about the electricity that is used by big business and banks to run their own servers (e.g. Facebook vs Steemit). Blockchain is able to replace these centralised systems and therefore reduce their power output. The trouble at the moment is they are being run side by side. In terms of "cashing out" your earnings - this is a ridiculously complex procedure that leaves you feeling extremely frustrated but after all is said and done (and it has been "done" by many people I know) you still end up with more in your bank account that you get with the equivalent streams on somewhere like Spotify. Again services are being developed to make this process easier. I also still have my reservations with these services but I am more optimistic than you and think that when all the wrinkles get ironed out we will be left with a few that really do work well and pay more than the traditional services who take such a large cut to pay their shareholders, etc. In the meantime you can make money from them right now if you are willing to jump through some hoops. So in conclusion everything to do with blockchain is very, very new but the potential is huge. If you want to get involved now then it is a good way to learn all about it but be prepared for some frustration!

    I have to agree with a of what you have said but I also want to provide a little bit of a view from someone who has indeed used these sites and does so on a daily basis.

    The electricity issue is a big one and is starting to be addressed by using different technologies that are not as resource intensive. Steemit is a good example - there are not "miners" using electricity. Instead there is a pool of "STEEM" that is paid out to authors and curators on the platform. It's a bit like a decentralised Facebook but you don't have to give out any personal information.

    It's a bit like the industrial revolution at the moment - the first machines are not very efficient at all but this has to and is changing. Also not many people talk about the electricity that is used by big business and banks to run their own servers (e.g. Facebook vs Steemit). Blockchain is able to replace these centralised systems and therefore reduce their power output. The trouble at the moment is they are being run side by side.

    In terms of "cashing out" your earnings - this is a ridiculously complex procedure that leaves you feeling extremely frustrated but after all is said and done (and it has been "done" by many people I know) you still end up with more in your bank account that you get with the equivalent streams on somewhere like Spotify. Again services are being developed to make this process easier.

    I also still have my reservations with these services but I am more optimistic than you and think that when all the wrinkles get ironed out we will be left with a few that really do work well and pay more than the traditional services who take such a large cut to pay their shareholders, etc. In the meantime you can make money from them right now if you are willing to jump through some hoops.

    So in conclusion everything to do with blockchain is very, very new but the potential is huge. If you want to get involved now then it is a good way to learn all about it but be prepared for some frustration!

  • Ghostly Beard

    Ghostly Beard

    Hey Juxta! Thanks for visiting and giving us your experience about it. I know you are quite involved in this with Atom Collector so it's good to have your perspective! :) About the ecological issue, it's true that banks and big businesses are using a lot of resources, yet their consumption is not exponentially growing the way blockchain based technology is. The fact that the electrical bill of a Bitcoin transaction computing alone would be enough to power a household for a week (as of now) is pretty worrying, but that's just one aspect of it that is wrong. The fact is that there is more hype than reality in a lot of these new coins and some people who know the deeper technical aspects are starting to say so themselves, not to mention that the SEC is starting to look closer into it and will start regulating soon which will create more fees and big drops in value when speculators are going to realize they cannot operate out of the law forever. It's a landscape ripe with all sorts of scams and indeed arrests are being conducted as we speak in the worst cases of ICO frauds. The more I read about the technical underlying and the more it looks like it's just a different way to operate database transactions and not the revolutionary technology that's going to save us all. Still my main concern as with all these streaming platforms, is that they operate by reinforcing the already widely popular idea that music should be free... Users don't pay for it, so some elaborate scheme is used instead to try and compensate artists... This is wrong at the core IMO. So, no, I'm not optimistic about it, and I'm especially not prepared to jump any kind of hoops for a few mere dollars while saying to listeners: it's fine to listen for free! That message is the evil we should all fight instead of being complacent and complicit about it.

    Hey Juxta! Thanks for visiting and giving us your experience about it. I know you are quite involved in this with Atom Collector so it's good to have your perspective! smile

    About the ecological issue, it's true that banks and big businesses are using a lot of resources, yet their consumption is not exponentially growing the way blockchain based technology is. The fact that the electrical bill of a Bitcoin transaction computing alone would be enough to power a household for a week (as of now) is pretty worrying, but that's just one aspect of it that is wrong.

    The fact is that there is more hype than reality in a lot of these new coins and some people who know the deeper technical aspects are starting to say so themselves, not to mention that the SEC is starting to look closer into it and will start regulating soon which will create more fees and big drops in value when speculators are going to realize they cannot operate out of the law forever. It's a landscape ripe with all sorts of scams and indeed arrests are being conducted as we speak in the worst cases of ICO frauds.
    The more I read about the technical underlying and the more it looks like it's just a different way to operate database transactions and not the revolutionary technology that's going to save us all.

    Still my main concern as with all these streaming platforms, is that they operate by reinforcing the already widely popular idea that music should be free... Users don't pay for it, so some elaborate scheme is used instead to try and compensate artists... This is wrong at the core IMO.

    So, no, I'm not optimistic about it, and I'm especially not prepared to jump any kind of hoops for a few mere dollars while saying to listeners: it's fine to listen for free! That message is the evil we should all fight instead of being complacent and complicit about it.

  • Juxta

    Juxta UK

    Indeed 70% of ICOs (Initial Coin Offerings) are scams apparently so as an investment opportunity it is "buyer beware" x 1000! In terms of music for free. I wish there was a way to wind back the clock but that cat is now well and truly out of the bag and we can all disagree with it but I don't see it ever changing now. It's like trying to resist the move from vinyl to CD and then from CD to streaming. I'm afraid it's an inevitable consequence of the modern world. Blockchain technology is a lot more than just another way to carry out transactions though. It is already helping people in third world countries that have no access to bank accounts. There is a lot of good being done behind all the scams but of course that does make very good click bait! Also back to the currency issue - the world is tied to the $US at the moment and that's about as fake as you can get. At any moment they can just print more or even just type some numbers into a computer to make more. It's pretty scary when you look into it. The point of the cryptocurrency mining is that it makes that impossible so it is actually a great idea BUT the electricity issue needs to be addressed for sure!

    Indeed 70% of ICOs (Initial Coin Offerings) are scams apparently so as an investment opportunity it is "buyer beware" x 1000!

    In terms of music for free. I wish there was a way to wind back the clock but that cat is now well and truly out of the bag and we can all disagree with it but I don't see it ever changing now. It's like trying to resist the move from vinyl to CD and then from CD to streaming. I'm afraid it's an inevitable consequence of the modern world.

    Blockchain technology is a lot more than just another way to carry out transactions though. It is already helping people in third world countries that have no access to bank accounts. There is a lot of good being done behind all the scams but of course that does make very good click bait!

    Also back to the currency issue - the world is tied to the $US at the moment and that's about as fake as you can get. At any moment they can just print more or even just type some numbers into a computer to make more. It's pretty scary when you look into it. The point of the cryptocurrency mining is that it makes that impossible so it is actually a great idea BUT the electricity issue needs to be addressed for sure!

  • Ghostly Beard

    Ghostly Beard

    It's not about winding back the clock, but educate our listeners. I'm not against progress, for example I'm not one for vinyl as I believe it's mostly a fad, or a collector thing. Yet, vinyl rising from the dead shows us that there are people willing to buy music, as a product, and these people generally put more value into it than the casual streamer. People start to realize that with the amount of available music at their fingertips they don't value anything anymore, so some are starting to get back to a more tangible relationship with music. I believe, as unsigned, this is our true audience and it's out there, and it's reachable if we put our mind to it instead of chasing the mirages that streaming is offering us. The more the merrier or course, but nothing is truly impossible and when a situation is unsustainable it's bound to change at one point, so up to unsigned artists to lead the way as always, where signed artists can't.

    It's not about winding back the clock, but educate our listeners. I'm not against progress, for example I'm not one for vinyl as I believe it's mostly a fad, or a collector thing.

    Yet, vinyl rising from the dead shows us that there are people willing to buy music, as a product, and these people generally put more value into it than the casual streamer. People start to realize that with the amount of available music at their fingertips they don't value anything anymore, so some are starting to get back to a more tangible relationship with music.

    I believe, as unsigned, this is our true audience and it's out there, and it's reachable if we put our mind to it instead of chasing the mirages that streaming is offering us. The more the merrier or course, but nothing is truly impossible and when a situation is unsustainable it's bound to change at one point, so up to unsigned artists to lead the way as always, where signed artists can't.

  • Mickle

    Mickle USA

    You have provided a great analysis of coins or cryptocurrency which is getting familiar like Emercoin Blockchain with the passage of time. I think your post is best to warn people not to indulge themselves in too much risk.

    You have provided a great analysis of coins or cryptocurrency which is getting familiar like Emercoin Blockchain with the passage of time. I think your post is best to warn people not to indulge themselves in too much risk.

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