BBC – Capital – How blockchain could save billions of musicians

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In the bowels of a former nuclear research bunker, Imogen Heap sits at the piano. While singing, the small audience of this rare acoustic performance cheers her.

But this crowd is not simply enjoying the show. They are also benefiting from it. A recording of one of the two Grammy winners at the Stockholm concert in Sweden will be put on sale online. Incorporated within its digital code will be a contract that guarantees 150 ordinary spectators to receive a portion of the fees derived from sales.

A copy of every ledger is also stored on millions of computers all over the world, essentially producing millions of witnesses in a single contract

The technology that makes this captivating gift possible is blockchain, a digital ledger that records transactions and information in a verifiable and permanent way. Blockchains have been used primarily to support cryptocurrencies like BitCoin and Ethereum, but they can also be used to create the so-called intelligent contracts & # 39; to guarantee other agreements between two parties.

Heap offered beggars the opportunity to sign up for one of these contracts as part of an experiment that is conducting on the potential for blockchain in the music industry.

"It really opened my mind in terms of how it could change the way things are done," he says. He worked on a blockchain-based service for artists to help them keep track of where and when their work is used and to make sure they are paid fairly.

Heap, a musician who has worked with stars including Ariana Grande and Taylor Swift, is one of a growing number of blockchain innovators who are trying to overcome the limits in terms of how this emerging technology could be used. And if you want to believe in a new report on the future of work at the World Economic Forum (WEF), you will soon be joining many other people.

The WEF analysts have included "blockchain specialists" on a list of 50 occupations that will increase in importance over the next four years. And next to this there will be an increasing number of jobs.

"Among our respondents, 45% of companies say it is likely or very likely that they will expand into blockchain technologies," says Vesselina Stefanova Ratcheva, senior analyst at the WEF and one of the authors of the report. "That figure looks different from the industry".

The report notes that while the financial services industry could be considered one of the first to adopt blockchain technologies, other sectors such as health care, the automotive industry and energy will not be far behind.

It's the way blockchains work that makes them attractive to many enterprising companies and individuals. They form the so-called "distributed ledgers" – essentially electronic sheets of transactions and agreements that, once registered, can not be changed.

These registers can be linked to digital currencies like a BitCoin, a digital resource like a piece of music or even physical objects. When a transaction occurs, a public record of it is placed in an encrypted "block", which is linked to all previous blocks and to all that comes after a sort of fingerprint known as a cryptographic hash. If a block is changed, it will not match those around it, which means that attempts to defraud or tamper with a transaction are immediately apparent.

A copy of every ledger is also stored on millions of computers around the world, essentially producing millions of witnesses in a single contract. Since they all contain a copy of the ledger, they provide a consensus that a transaction or registered information is valid.

Blockchains can also be used to create other types of contracts, similar to legal documents, which can automatically perform several steps in a deal. For example, the blockchain contract may issue payment when an item is delivered securely, and at the same time order the replacement stock for the seller.

These types of contracts are seen as a way to overcome the uncertainty and lack of trust that surrounds many business transactions, where each part of an agreement must maintain its ledger and then its own version of the truth. Blockchains essentially shares the "truth" with all its members so as to make all the details of a transaction visible.

The Swedish land register, Lantmäteriet, conducted an experimentation using blockchain in real estate transactions. Its testbed technology produces a digital file that contains mortgage deeds, proprietary agreements and the transaction process that is shared by all parties involved in a property sale Рthe buyer, the seller, the mortgage company, real estate agents, lawyers and cadastre.

When a digital sales contract is signed by the buyer and the seller, accepting the purchase price and the date of possession, the loan will be automatically issued by the mortgage provider, the transfer of funds and registration of title documents. Estimated that it can reduce the time needed for a transaction from several months to a few hours. At the beginning of this year, the first ownership agreement with the blockchain system was completed.

Even the blockchain's ability to provide an irrefutable record has also opened up other uses. For example, the diamond industry is using them to combat counterfeits and "conflict diamonds" extracted in an unethical manner. Diamond blockchains contain high resolution images for each diamond at each point of its journey, along with certificates and product details such as carats, cuts, purities and serial numbers. Whenever a diamond changes hands, it is recorded in the blockchain.

Similar configurations are used for other valuables, such as musical instruments. Some farmers are also experimenting with the use of technology to authenticate fish, pigs and mango as they enter the market. In the healthcare sector, blockchain could be used to ensure that clinical trial results are not altered or tampered with by medical companies by providing an unalterable record of the results obtained at the time.

These types of contracts are seen as a way to overcome the uncertainty and lack of trust that surrounds many business transactions, where each part of an agreement must keep its ledger and then its own version of the truth

Important organizations such as IBM, Amazon, Ford, BMW, Nestle, Pfizer and Walmart are among those who are experimenting with how to use blockchains to improve their supply chains. For example, for the pharmaceutical industry, the possibility of using blockchains to create a verifiable authenticity and traceability record is extremely attractive in a market where counterfeiting can be a big problem.

"The possibilities are quite endless," says Min Teo, executive director of ConsenSys, a blockchain software company created by Joseph Lubin, co-founder of Ethereum's cryptocurrency. He is working with a number of organizations trying to implement blockchains in their way of working. "Many existing companies could use it to optimize their operations and all kinds of resources are starting to be tokenized with blockchain."

According to statistics from the online jobs search engine Indeed.com, the demand for employees with experience in blockchain technology doubled in 2017 and is six times higher than in 2015. Blockchain developers are now experiencing a ferocious demand and can expect to earn up to $ 158,000 in the United States.

But Teo sees the employment potential extending far beyond the use of programmers who can create these digital contracts. As they begin to be used as legal documents, expert technology lawyers will be needed to analyze the complexities of how blockchains adapt to traditional contract law. How, for example, could blockchains be used to replace a traditional rental contract?

One project in which ConsenSys is currently involved is to train lawyers so they can help create and execute these smart contracts. Another project, called OpenLaw, is trying to turn legal language into something that can be inserted into the computer code.

Blockchain developers are now experiencing a ferocious demand and can expect to earn up to $ 158,000 in the United States

But even the blockchain faces problems. Currently blockchain transactions require huge amounts of computing power and energy while the networks that support blockchain can only run a limited number of transactions in a day.

"In terms of performance metrics such as transactions per second, existing blockchain technologies are in many ways lower than most conventional technologies," warns Vili Lehdonvirta, an economic sociologist at the Internet Institute of Oxford.

Other aspects, such as the way governments regulate and tax smart contracts using blockchain, have yet to be clarified. Even the legal status of blockchains is not clear at present, as it is not currently supported by regulatory acts.

Blockchains also does not guarantee that the information in their possession is accurate in the first place – rather, show if such information has been tampered with – so that they may still be susceptible to fraudulent rumors when they are created.

"There are people working on all these problems," says Teo. "We're going to see some new, emerging roles like this happens, but blockchain is also an enabling technology, so we're likely to see a lot of jobs created by the new kinds of business opportunities that will open up."

Imogen Heap is a good example of this: it helped create an organization called Mycelia that is trying to change the way the music industry operates. Digital piracy, file sharing and the global nature of the Internet have made it much more difficult for musicians to get paid when their work is downloaded or used.

By embedding the blockchain in a song's fingerprint, however, it should be possible to record whenever a track is played on a radio station or used in a YouTube video.

"The song itself will have the ability to pay everyone involved every time it is played or bought," explains Heap. Information on all contributors – from engineers to musicians – can be incorporated into the blockchain, along with data on the equipment used to record it.

"If a radio DJ plays, they can get information about what the song was written about, who was involved," says Heap. "If an artist wants to pay for the use of a song to go to a charity for the next two weeks, he can create the contract to divert money into another account." Blockchain is the technology that makes it possible. "

Obviously, for this to happen, it will require the music industry, radio stations and online platforms such as YouTube, where music content is often used on the posted videos, to register for a system that will distribute royalty payments using automatic blockchain. Heap believes that the industry is starting to realize that there must be changes as it struggles for online piracy and payment disputes triggered by online streaming companies like Spotify.

But the vision of Heap goes further. Mycelia is trying to create blockchain-based "Creative Passports" for artists who will record their entire work history. For example, whenever they play a concert, the venue can validate it on the creative passport by "checking" them with an app, helping to produce a single repository for the entire career of an artist.

This digital record of results could be interesting even outside the creative industries: it is not necessary to evaluate the certificates to demonstrate that you have achieved exam results when you are candidates for a job, for example. Potential employees could simply send their own blockchain-based CV.

"There will be a lot of emerging jobs involving blockchain," says Heap. "Blockchains will be a big part of our lives and we will need many people to help make the changes that are coming."

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