New cryptocurrencies are popping up everywhere these days. Of course, everyone has heard of Bitcoin, but there’s also Litecoin, the one that started as a joke Dogecoin, and some more that have gathered followers.
And now the music industry wants to have its own cryptocurrency and has created Songcoin. A media and entertainment company named Pimovi has struck a partnership with one of the architects of Namecoin and together they are looking to launch Songcoin in the next week for use in the music business.
The CTO of Pimovi, Kasian Franks, shared in an interview for Evolver.fm that Songcoin aims to lower fees for transactions and international transfers in the industry. But in order to distinguish Songcoin from the many other cryptocurrencies, Pimovi stated that they will offer discounts that are tailored to both fans and musicians. An example of this will be the joint work with ticket vendors who will offer fans using Songcoin a cheaper rate.
“As the administrators of this currency and our solid experience in the music business, we can mold it in a way that suits the industry,” said Franks.
To start things up in the beginning Pimovi will give away Songcoins for free and create a music recommendation system that helps users in discovering new music. Then the company will create online tip jars for the artists that adopt its use and slowly the currency will gain some value.
This is of course what they are hoping is going to happen, but the main problem is the aforementioned increase in value. With Bitcoin the mining process is what creates the value, the time and money which miners spend to build a block of bitcoins is where it initially comes from.
Another hurdle would be the music industry’s notoriously slow adoption of new tech, coupled with a possible suspicious outlook to the idea of a cryptocurrency.
The main model which will be followed here is that of Dogecoin, the currency which started out as a joke, but has gained some traction in the online world. Franks feels confident that here there’s an even better chance of success, as Songcoin starts with a purpose and aim behind it.
He adds that the users of Songcoin will have the ability to change them into hard currency through Coinbase, but at the moment the exchange trades only with Bitcoin. It’s unclear why they would be motivated to add Songcoin to the mix, when they don’t even accept Litecoin, which is widely recognized and has a solid value behind it.
It’s perfectly possible that Songcoin will pick up and be a huge success but the interview with Franks highlighted some basic misconceptions of cryptocurrencies and how they function. An example of this is how Franks describes the creator of Bitcoin, Satoshi Nakamoto - “a Japanese guy, who can’t be found for some reason.”
It remains to be seen if Pimovi’s project Songcoin will be a success in creating a business including partnerships, products and consulting, but at the moment it leaves the impression that its more of a get rich quick scheme which is based on a misguided understanding of the way cryptocurrencies work.