Musicoin White Paper: Free Creations While Rewarding Creators (v 0.9)

Two Failed Models

Napster, which was the first peer-to-peer (P2P) file sharing network widely adopted, marked the beginning of the end for the traditional approach to music distribution and consumption. In many people’s eyes, it’s seen as the assassin of the music industry. In this model (which we call the “Torrent Model”), content was casually shared on a P2P network and downloaded by other users without the musician’s permission and without sending any form of compensation. This model is doomed by itself, not only for its legal breach, but also because it is not sustainable as musicians’ benefits were totally annihilated.

Torrent Model, featured as peer to peer sharing without anonymously, where musicians are entirely disregarded.
Subscription Model (right), which retains all of the complexity and inefficiency of the legacy music industry, and ultimately pays musicians a small fraction of total revenue.
Figure 2. The current industry myth on distribution

New Paradigm

We need a new model that re-structures the entire process, from creation, to consumption, to compensation, and to more creation. The model we propose here is based on the theory of Sharism, which emphasizes a tight coupling between sharing and rewarding.

Figure 3. Sharism Model creates a closed circuit between musician and listener.

A Universal Blockhcain for Music

To support the Sharism Model, we need to create a digital ledger specifically tied to music consumption to close the loop. We call the ledger Musicoin for easy understanding. In this design, for every playback, a digital coin is sent directly from the listener’s account to a “little program”(someones like to call it “smart contract”) that lives on the blockchain.This little program actually helps enforce a “Pay per Play” license(PPP). So whenever a music was shared to a listener, the little program will help execute the license terms to charge corresponding amount of coins and send to the owner of the license. Under this, every playback will count.

Illustration of the payment flow, in which a user sends payment along with a request to play a particular work and in return is granted access. Specifically, granting access means providing a key that can decrypt an encrypted audio file that is stored on a distributed file system.
  1. To fully respect equality and free economy, the blockchain should not allocate any coins to anyone at the genesis . This means there will be even no coins be allocated as reward to the creators. Of course, based on this principle, the creator of Musicoin expect much profound business models emerged from such an open platform, instead of narrowly centralized ideas.
  2. UX is relevant. Whatever blockchain promised are still in hype stage. To make it really useful to public mass, it requires to make the entry barrier as low as possible for musicians and listeners alike, to avoid the risk of becoming yet another echo chamber of blockchain enthusiasts interacting only with other blockchain enthusiasts. We aim to be generally useful and accessible to the general population from day 0.


From micro to macro, it’s fairly safe to assume the biggest concern for new entrants here is money supply. If it’s just a cryptocurrency, the concern is valid and probably takes a long time to justify its value. However, the design of Musicoin is to attach to music consumption, which lead to the bigger topic called Musiconomy.

Open Opportunities

Musicoin is not only designed for a new paradigm, but also offering a great opportunity for larger stakeholder groups. Big labels may have to adapt, but they can benefit from this platform because the whole market scale can be enlarged, they can work once and harvest forever and worldwide. They can put their copyrighted content onto Musicoin blockchain and keep enjoying the upscaled consumption.


“Someone is making an enormous profit,” says Krukowski, a musician that shared his royalty check online, “and it’s not the musicians.” This is the complaint made by many musicians in the past. Today, with Musicoin, we can definitely change this. Musicians will make money and 100% income will go to their own wallet.

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