It seems like new cryptocurrencies are popping up every day. Sure, everyone knows Bitcoin, but there is also Litecoin, the joke Dogecoin and several others.
Well now the recording industry has its own cryptocurrency called Songcoin. Pimovi, a media and entertainment company, partnered with one of the architects of Namecoin and they plan to release Songcoin next week for use within the music business.
Pimovi’s chief technology officer, Kasian Franks, said in an interview with Evolver.fm (which was republished by Billboard) that Songcoin will be used to lower fees on transactions and international wires within the industry. To differentiate Songcoin from other cryptocurrencies, Pimovi said it will offer plenty of discounts that cater to musicians and fans. For example, Pimovi wants to work with ticket vendors to give fans that use Songcoin and cheaper rate.
“As the stewards of this thing, with a healthy amount of experience with the music industry, we can gear this towards the music industry,” Franks said.
To get the ball rolling, Pimovi will give them away for free initially and build a music recommendation system to help people discover new music. It will then add digital tip jars for each artist and will eventually gain value.
That’s Franks’ hope, anyway. The problem is that much of the value associated with Bitcoin is the complex “mining” process behind creating them. Bitcoin miners invest a lot of time and money to create a block of bitcoins that they can then spend as they please, giving bitcoins their initial value.
It also remains to be seen if the recording industry, typically slow to adapt to new technologies, will even be amenable to the concept of a cryptocurrency.
Franks is basing his strategy on Dogecoin, which was started as an Internet joke, and seems confident that it will work because Songcoin was started with a specific purpose in mind.
Franks also said that Songcoin users will be able to convert Songcoin into dollars by using Coinbase. However, Coinbase only trades in Bitcoin and remains unclear why it would be interested in Songcoin when it doesn’t even work with Litecoin, a fairly established and valuable cryptocurrency.
Of course, it’s entirely possible that Songcoin will take off and be a success, but the interview shows several fundamental misunderstandings about cryptocurrencies and how they work. For example, Franks refers to the anonymous creator of Bitcoin, Satoshi Nakamoto, as “this Japanese guy who they can’t really find right now for some reason.”
Maybe Pimovi will succeed in its goal to create an entire industry around Songcoin that includes products, partnerships and consulting services, but it seems more like an attempt to get rich quick from a serious misunderstanding of the cryptocurrency phenomenon.