Is cryptocurrency the future of the music industry?

I make music because I love making music, and because it helps me to process my emotions and thoughts. That's true for most online musicians, because the reality is that for most of us, making music is not particularly lucrative. Yes, there are exceptions. There are examples of musicians who uploaded a few tracks to Soundcloud or YouTube and went onto become a multi-platinum artist, but those examples are quite few and far between.

In fact, even though my music has had some degree of success on Soundcloud—I have had nearly 14,000 likes and over 70,000 plays—making music has cost me money over the years when you factor in all of the equipment I have bought or rented, all the money I have paid to session musicians, and for travel, and for promotion. My Soundcloud stats look cool, but I've never made a penny from that.

But they have been making someone money. Spotify and Soundcloud have grown into multi-billion dollar businesses on the back of underground artists and enthusiasts like myself. While I might not be as famous as Justin Bieber or Ariana Grande, thousands of underground artists like me upload the content that are making the owners of these websites rich. And to start claiming the tiny level of royalties payed out by Spotify, YouTube, and Soundcloud, artists have to pay a fee to register with a performing rights society.

Additionally, artists with record deals are getting screwed twofold—a big cut of their money is going to Spotify and Soundcloud, but bigger cuts are going to their labels, and management. The music industry is really more of a middleman industry.

That makes the industry ripe for disruption. In many ways, the status quo mirrors the state of the financial industry. Big banks have grown fat with wealth by creating trillions of dollars worth of money and financial instruments out of thin air and lending it at interest to people in the real economy. The banks parasitize the monetary economy precisely as record labels and distribution channels parasitize the music industry.

There are already a growing plethora of alternatives to the middleman-infested music industry. First is channels.cc. Then there is dsound.audio, which uses the Steemit blockchain, and Musicoin, which is a fork of ethereum. Essentially, these websites are using blockchain technology to cut out of the middlemen. Artists can log on, and upload their music. They can tweet out and Facebook links. They can listen to their friends' music. And instead of just earning plays and likes that are worth no money, they gain cryptocurrency. We are taking back power from the music industry, in the same way that cryptocurrency adopters are building a system with the intent of taking back power from the financial industry!

I am still going through the learning curve of working out how to use the websites effectively. My take so far—and we are still very early in this game—is that Musicoin is the best, because it pays artists more than 10 times what Spotify pays per stream, without charging the listener to listen. It does this via a system called universal basic income that siphons off some of the proceeds of mining Musicoin, and distributes this among artists on a per-play basis. dsound lets users listen for free, but does not pay per stream. Instead, it pays per upvote using a complicated and confusing system where different people's upvotes are valued differently. While this system has been lucrative for some of my friends, it seems a bit dependent upon attracting the attention of powerful Steemit users. Channels.cc is a new system, but the fact that users have to pay for content they consume is potentially a barrier to adoption. However, one advantage of channels.cc is that the site is much quicker than Musicoin, and it is possible to cash out into Paypal without going through the complicated and costly process of transitioning into Bitcoin, as is at present necessary for users of Musicoin or Steemit. Also, the current exchange rate between the U.S. dollar and channels.cc is fixed, whereas the U.S.-dollar denominated value of Steem dollars and Musicoin are highly volatile.

Perhaps one of these websites will explode, and come to dominate music consumption, making millionaires out of early adopters. Or perhaps another website will refine the idea, and take it to great new heights. At the end of the day, basic economics will probably win out. Right now, Musicoin are paying musicians 3c of cryptocurrency per stream. That's an order of magnitude better than Spotify, or Soundcloud, or YouTube. Once word gets out about this, most artists who can adopt these systems will adopt these systems. The others who can't—the bigger artists with major label record contracts—might well want to wriggle out of those record deals, and go direct to their existent fanbase through crypto infrastructure. After all, it's paying better.

Yes, cryptocurrency is not currently real money used for purchasing everyday items. Legally, cryptocurrency is more like an obscure digital asset. But it might well become real money in the future, if enough people use it. By dipping our toes into the water, we are helping to create a better future for the music industry, where artists get paid without hundreds of middlemen taking a big cut.

In any case, these new blockchain-based websites are illustrating to me that underground musicians deserve to get remunerated for the things we create, and all the costs that we bear in creating our art. Underground musicians are a community of creators and artists, and the owners of web infrastructure like Spotify, Soundcloud, and YouTube have been parasitizing our creativity for a very long time.

Please follow me on Channels.cc, Musicoin, and dsound for more! I will write more about my experience with these websites.

This post originally appeared on Channels.cc