In the bowels of a former nuclear research bunker, Imogen Heap sits at a piano. As she beings to sing, the small audience for this rare acoustic performance cheer her on.
But this crowd is not just simply enjoying the show. They stand to benefit from it too. A recording of one of the two-time Grammy winner’s songs at the concert in Stockholm, Sweden, is to be released for sale online. Embedded within its digital code will be a contract that ensures 150 ordinary audience members receive a portion of the royalties made from the sales.
A copy of each ledger is also kept on millions of computers around the world, essentially producing millions of witnesses to a single contract
The technology that makes this eye-catching giveaway possible is blockchain, a digital ledger that records transactions and information in a verifiable and permanent way. Blockchains have primarily been used to underpin cryptocurrencies like BitCoin and Ethereum, but they can also be used to create so-called ‘smart contracts’ to guarantee other agreements between two parties.
Heap offered ticketholders the chance to sign up to be part of one such contract as part of an experiment she is conducting on the potential for blockchain in the music industry.
“It has really opened my mind in terms of how it could change the way things are done,” she says. She has been working on a blockchain-based service for artists to help them keep track of where and when their work is used, and to ensure they get paid fairly.
Heap, a musician who has worked with stars including Ariana Grande and Taylor Swift, is one of a growing number of blockchain innovators who are attempting to push the boundaries in terms of how this still-emerging technology might be used. And if a new report on the Future of Work from the World Economic Forum (WEF) is to be believed, she could soon be joined by a lot more people.
WEF analysts have included “blockchain specialists” in a list of 50 occupations that will rise in importance over the next four years. And alongside this will be an increasing number of jobs.
“Among our respondents, 45% of companies state that they are likely or very likely to expand into blockchain technologies,” says Vesselina Stefanova Ratcheva, a senior analyst at the WEF and one of the authors of the report. “That figure looks different by industry.”
The report finds that while the financial services industry might be expected to be an early adopter of blockchain technologies, other industries like healthcare, automotive and energy will not be far behind.
It is the way blockchains work that makes them attractive to many enterprising companies and individuals. They form what are known as “distributed ledgers” – essentially digital spreadsheets of transactions and agreements that, once recorded, cannot be altered.
These ledgers can be attached to digital currencies like a BitCoin, a digital asset like a piece of music or even physical objects. When a transaction occurs, a public record of it is placed into an encrypted “block”, which is connected to all the blocks that came before and all that come after through a sort of digital fingerprint known as a cryptographic hash. If one block is altered, it will not correspond to those around it, meaning attempts to defraud or tamper with a transaction are immediately evident.
A copy of each ledger is also kept on millions of computers around the world, essentially producing millions of witnesses to a single contract. As they all hold a copy of the ledger, they provide consensus on whether a transaction or recorded piece of information is valid.
Blockchains can also be used to create other sorts of contracts, in a similar way to legal documents, that can automatically execute different steps in a deal. For example, the blockchain contract could issue payment when an item is delivered safely, while also ordering replacement stock for the seller.
These sorts of contracts are widely being seen as a way to overcome the uncertainty and lack of trust that surrounds many business transactions, where each side of a deal must keep their own ledger and so their own version of the truth. Blockchains essentially shares the “truth” with all its members so all details of a transaction become visible.
The Swedish land registry, Lantmäteriet, has been conducting a trial using blockchains in property deals. Its testbed technology produces a digital file that contains mortgage deeds, agreements of ownership and the transaction process which is shared to all parties involved in a property sale – the buyer, seller, mortgage company, estate agents, solicitors and the land registry.
When a digital contract of sale is signed by the buyer and seller, agreeing the purchase price and date of possession, it will automatically trigger the issue of the loan from the mortgage provider, transfer of funds and registration of title documents. It estimates that it can reduce the time it takes for a transaction from several months to just a few hours. Earlier this year the first property deal using the blockchain system was completed.
The ability of blockchains to provide an irrefutable record has also opened up other uses too. The diamond industry, for example, is using them to combat counterfeits and unethically mined “conflict diamonds”. Diamond blockchains hold high-resolution images for each diamond at every point along its journey, along with certificates and product details such as carat, cut, clarity and serial numbers. Every time a diamond changes hands, this is recorded in the blockchain.
Similar set-ups are being used for other valuable items, such as musical instruments. Some farmers are also experimenting with using the technology to authenticate fish, pigs and mangos as they enter the market. In the healthcare industry blockchains could be used to ensure that the results of clinical trials are not altered or tampered with by medical companies by providing an unalterable record of the findings made at the time.
These sorts of contracts are widely being seen as a way to overcome the uncertainty and lack of trust that surrounds many business transactions, where each side of a deal must keep their own ledger and so their own version of the truth
Major organisations like IBM, Amazon, Ford, BMW, Nestle, Pfizer and Walmart are among those experimenting with how they can use blockchains to improve their supply chains. For the drug industry, for example, the ability to use blockchains to create a verifiable record of authenticity and traceability is highly attractive in a market where counterfeiting can be a major problem.
“The possibilities are quite endless,” says Min Teo, an executive director at ConsenSys, a blockchain software company set up by Joseph Lubin, the co-founder of the Ethereum cryptocurrency. It is working with a range of organisations attempting to implement blockchains into the way they work. “A lot of existing businesses could use it to optimise their operations and all sorts of assets are starting to be tokenised with blockchain.”
According to statistics from online jobs search engine Indeed.com, demand for employees with expertise in blockchain technology doubled during 2017 and is six times higher than it was in 2015. Blockchain developers are now experiencing fierce demand and can expect to earn up to $158,000 in the US.
But Teo sees the jobs potential extending well beyond employing coders who can create these digital contracts. As they begin to be used as legal documents, teams of technology-savvy lawyers will be needed to sort through the intricacies of how blockchains fit into traditional contract law. How, for example, could blockchains be used to replace a traditional rental agreement?
One project ConsenSys is currently involved in is to train lawyers so they can help to create and execute these smart contracts. Another project, called OpenLaw, is attempting to turn legal language into something that can be enshrined in computer code.
Blockchain developers are now experiencing fierce demand and can expect to earn up to $158,000 in the US
But blockchain faces problems too. Currently blockchain transactions require huge amounts of computing power and energy while the networks that underpin blockchains can only perform a limited number of transactions in a day.
“In terms of performance metrics like transactions per second, existing blockchain technologies are in many ways inferior to more conventional technologies,” warns Vili Lehdonvirta, an economic sociologist at the Oxford Internet Institute.
Other aspects, such as how governments regulate and tax smart contracts using blockchains, also still need to be figured out. Even the legal status of blockchains is currently unclear as it is not currently supported by regulatory acts.
Blockchains also do not guarantee the information they hold is accurate in the first place – rather, they show if that information has been tampered with – so they could also still be susceptible to fraudulent entries when they are created.
“There are people working on all these problems,” says Teo. “We are going to see some new roles emerging as this happens. But blockchain is also an enabling technology, so we are likely to see a lot of jobs being created by the new kinds of business opportunities that it will open up.”
Imogen Heap is a good example of this – she has helped to establish an organisation called Mycelia that is attempting to change the way the music industry operates. Digital piracy, file sharing and the global nature of the internet have made it far harder for musicians to get paid when their work is downloaded or used.
By embedding blockchains into the digital fingerprint of a song, however, it should be possible to record each time a track is played on a radio station or used in a YouTube video.
“The song itself will have the ability to pay all the people involved whenever it is played or purchased,” explains Heap. Information about all the contributors – from engineers to musicians – can be embedded into the blockchain, along with data about the equipment used to record it.
“If a radio DJ plays it they can get information about what the song was written about, who was involved,” says Heap. “If an artist wants payments for using a song to go towards a charity for the next two weeks, they can create the contract so it diverts money into a different account. Blockchain is the technology that makes this possible.”
Of course, for this to happen it will require the music industry, radio stations and online platforms like YouTube, where music content is often used on posted videos, to sign up to a system that will distribute royalty payments using automatic blockchain contracts. Heap believes the industry is starting to wake up to the idea that there needs to be changes as it struggles to deal with online piracy and payment disputes triggered by online streaming companies like Spotify.
But Heap’s vision goes further. Mycelia is attempting to create blockchain-based “Creative Passports” for artists that will record their entire history of work. Every time they play a gig, for example, the venue could validate that on their creative passport by “checking them in” with an app, helping to produce a single repository for an artist’s entire career.
This digital record of achievement could be appealing outside the creative industries too – no need to fish out certificates to prove that you achieved exam results when applying for jobs, for example. Prospective employees could simply submit their blockchain-based CV instead.
“There are going to be loads of jobs emerging involving blockchains,” says Heap. “Blockchains are going to be a big part of our lives and we are going to need a lot of people to help make the changes that are coming.”
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