This report has been created for the course of Business Economics. The topic is about the impact of bitcoin on the music industry in the USA. Its objective is to find out how bitcoin affects the music industry. Visit the official trading bot for more information on bitcoin trading.
For this purpose, various secondary research means have been used, including internet sources and library sources. Also, some statistical data related to Music Industry in the USA are included in the report.
7 Positives of bitcoin that profits music industry in the USA
1. Reduction in transaction fees
Bitcoin is a currency that cuts down the costs of an expensive fee-based business model facilitating transactions from most parts of the world. This currency doesn’t charge users for its services. Instead, it pays them as rewards for their contribution to the verification process known as bitcoin mining. These currency miners allow currency transactions to occur without intermediaries such as banks.
2. Reduction in payment processing time
Unlike other payment methods, bitcoin transactions are completed within 10 minutes that can take several days or even weeks to complete the transactions. According to the data provided by Statista, the average transaction time in the USA was 24 hours in 2014, and it’s expected that this number will be reduced up to 12 hours in 2017 (Statista, 2016).
3. Scalability
Bitcoin has a very high scalability potential, making it “the most profitable option for money transfer” (Cohen & Toepfer, 2013). In addition, many have been implementing blockchain technology into other industries to increase transaction throughput, including the music industry.
For instance, a programmer named David Carter is working on a project called “Open chain,” which claims to solve some of the problems bitcoin has been facing, such as lengthy block time and scalability (Prasad, 2015).
4. Protection against inflation
Due to its decentralized nature, Bitcoin becomes the best option to save your money from inflation. In addition, its worth has been increasing in recent years, so by making some savings in bitcoin, you are diversifying your portfolio and protecting yourself against inflation.
5. Data privacy
Bitcoin is a cryptocurrency that doesn’t require users to reveal any personal information to make transactions. Its public ledger system is transparent, but it protects people’s identities by ensuring that no one can track how much money a specific person has.
For this reason, bitcoin becomes an ideal payment method for those who value their privacy and want to stay anonymous while buying digital goods.
6. Transparent and neutral
Bitcoin is a transparent currency that runs on a public ledger system that can’t be manipulated or influenced by any third party. Its open-source nature makes it an ideal payment method for artists who deal with transparency issues, such as journalism companies and non-profit organizations.
7. Use of tokens as currency
Bitcoin can be used as a currency, which doesn’t need any third party and allows anyone to create their money with desired characteristics and features. In addition, tokens will enable the creation of different cryptocurrencies which can be used for particular transactions, such as paying for music downloads or streaming.
This makes bitcoin an ideal payment method for artists who want to monetize their creations in several different ways.
Some negatives of bitcoin that affects the music industry in the USA
1. Volatility
Bitcoin price is known for its volatility, leading to the instability of bitcoin as a currency and preventing it from becoming an international payment method (Newhouse, 2015). Furthermore, Bitcoin users who want to purchase digital products such as music are not sure if they will afford them because bitcoin prices can change dramatically overnight without their knowledge.
2. Incompatibility with the music business
As a decentralized cryptocurrency, Bitcoin doesn’t have any connections with existing financial institutions, making it incompatible with most music industry processes, including copyright, royalty, and payment system. Although the number of companies accepting bitcoin as a medium for their transactions is increasing, it’s still challenging to find a company that would buy bitcoins as a payment method.
Conclusion:
Bitcoin proves to be a revolutionary payment method in many industries, including the music industry. Its potential in this sphere is excellent. Many companies are trying to extend bitcoin among artists by offering new features such as crowdfunding, selling tracks or albums with bitcoins, digital goods trading, etc.