After the amazingly terrible Berklee white paper on how to make all musicians rich using magic beans, today we have a breathless piece of content marketing in Billboard hyping the notion.
The Billboard article is devoid of useful detail and keeps to promising the moon on a stick fueled by very complicated computer wizard magick. A company called PeerTracks claims it will have some sort of actual launch based around these ideas within two months. tl;dr no.
PeerTracks has been in the works for a while. In this interview from October last year, they try to explain what they’re doing. It involves a new blockchain — not Bitcoin — called BitShares Music, which is a variant of BitSharesX, an altcoin (a Bitcoin clone) that another cryptocurrency site called “impossible to understand”, and if you read that link you’ll see why.
Their great idea: Napster with micropayments in imaginary company points (bought with real money). That’s it. The incentive is that you, the listener, might get some imaginary company points coming your way for picking winners early.
(Note that, like Bitcoin itself and the many altcoins, it’s been substantially premined before launch. The original Bitshares site speaks of when the BitShares Music blockchain will be launched and the Notes made liquid [archive]. So as an economy, it’ll be a pump-and-dump, where early adopters hype up the tulip bulbs to cash in on later adopters who become the bagholders.)
There’s no details of the incentives to run all the computing power needed to maintain the integrity of the blockchain. This bit is important, as it keeps the trustless system usably trustworthy — and in Bitcoin it’s an evolutionary arms race that costs $10 in electricity for each transaction (paid by the miners, who are rewarded with Bitcoins, which are bought by new greater fools).
PeerTracks appears to have taken on board the complication factor of BitSharesX, which they explain like this:
PeerTracks users will spend and earn BitUSD, a crypto-currency market pegged to the US dollar. This shields our users (which are not day traders) from the volatility normally present with crypto-currencies while still benefiting from the many advantages like low fees.
This blockchain is a decentralized exchange; many things trade on it. First, there are Notes, the unit of the blockchain. Then there are artistcoins, which are user issued assets created by the artists to sell (or give away) to their fans. Think Snoopcoin, Biebercoin, etc.
Third and finally, there are BitAssets, like the BitUSD, which are market pegged to their real world counterparts and are collateralized by Notes, meaning all BitAssets are backed by units of the blockchain.
I hope how that works is immediately clear with everybody.
The founder Cédric Cobban, by the way, proclaims his interest in Austrian economics: an economics paradigm that (literally) eschews the concept of empirical testing of predictions. Yeah, this’ll work out great.
The Billboard article promises all this in two months. What they’re doing is ridiculously complicated, makes no sense, and if it’s ready by October 31st I’ll give you a lollipop. Two lollipops.
update, November 22: my lollipops are completely safe. Let’s see if they show life before 2016.