[Editor Charlie sez: Can we have that in dollars, please? Ujo Music has plans to take over PRO general licensing as well as streaming mechanicals. Never heard of Ujo? You will. Ujo is a “spoke” of MLC vendor ConsenSys (kind of like being a portfolio company of MLC partner ConsenSys). The plan is to pay everyone in the Ethereum cryptocurrency promoted by Consensys founder, Joe Lubin. See how they did that? Puts the $50 handshake into the Ether.]
When it comes to the $15 billion recorded music industry, the artists rarely come out with a big payoff. The recorded music industry began in the late 1800s with the invention of Thomas Edison’s phonograph and benefited greatly from the rise of radio broadcasting in the 1920s. However, back in those days, for the artist, it meant that in order for their music to be heard, they would have to make deals with a series of intermediaries, such as record labels, publishers, and distributors. Almost 100 years later, musicians still must go through this archaic system of intermediaries developed before the advent of the internet, where the artists lose up to 86% of the proceedsfrom their music.
Bitcoin Magazine listed PeerTracks and Bittunes, as well as Ujo, as blockchain startups intent on enabling performing artists and others to have a freer hand in safeguarding and commercializing their assets, while speeding up payments to all who have rights to proceeds.That same story included comments from founding Ujo team member, Phil Barry, a legacy industry veteran who played an instrumental role in advancing Ujo Music to prototype, but then exited that team early this year.
Thank goodness the smart people have this covered for the “legacy industry.” Because it’s never quite hard enough, is it? But the Lord never made a burden too heavy to carry, did he now?]
Technology company ConsenSys and mechanical licensing administrator Harry Fox Agency (HFA) received unanimous approval from the MLC Board to become the primary vendors responsible for managing the matching of digital uses to musical works, distributing mechanical royalties, and onboarding songwriters, composers, lyricists, and music publishers and their catalogs to the database.
Thompson said, “Knowing that we would be operating with tight deadlines proscribed under the new law, we began a rigorous review process of potential vendors to build our infrastructure well before we were tapped by the Copyright Office to be the official mechanical licensing collective. In fact, since last November when the Request for Proposals process began, the MLC has invested thousands of hours investigating the options to create the core technology and public interface that will comply with the less than seventeen-month implementation timeline and specific directives of the Music Modernization Act.”
Yes indeed, and this is what they came up with, which seems like a pretty risky bet, even for a betting man.
In other great news for songwriters, it turns out that ConsenSys, the cryptocurrency “blockchain venture production studio” (whatever the fuck that means) anointed as an MLC vendor, is into asteroid mining. No, seriously, the company paid money (or scrip or ether or something) for a company called “Planetary Resources” and they are just ebullient about the whole thing:
Blockchain venture production studio ConsenSys, Inc. has acquired the pioneering space company Planetary Resources, Inc. through an asset-purchase transaction….Ethereum Co-founder and ConsenSys Founder Joe Lubin said, “I admire Planetary Resources for its world class talent, its record of innovation, and for inspiring people across our planet in support of its bold vision for the future. Bringing deep space capabilities into the ConsenSys ecosystem reflects our belief in the potential for Ethereum to help humanity craft new societal rule systems through automated trust and guaranteed execution. [How about the pending and unmatched? Hmm? Isn’t that what MLC hired them for?] And it reflects our belief in democratizing and decentralizing space endeavors to unite our species and unlock untapped human potential. We look forward to sharing our plans and how to join us on this journey in the months ahead.”
Right. Asteroid mining and deep space capability. Using ether for power. Doesn’t that just read like a bad Hollywood science fiction movie where the deep spacers rebel against their corporate overlords or something?
A year ago, Joe Lubin seemed like one of the most prescient people on the planet. Cryptocurrencies like ether were in the midst of a hockey-stick ascent, and Lubin, a cofounder of the Ethereum blockchain and one of its most articulate pitchmen, was scheduled to speak at events from Davos to SXSW. At his firm’s “Ethereal Summits,” it was standing room only, with crowds hanging onto his every utterance, no matter how bizarre…. [If you think there’s a “but” coming, there is.]
Back in late 2014, a few months after ether launched via crowdsale at 30 cents per token, Lubin created ConsenSys, a holding company he grandiosely describes as a global “organism” to build the applications and infrastructure for a decentralized world. In actuality, it is the first crypto conglomerate, comprising a network of for-profit companies supporting bitcoin’s biggest blockchain rival, Ethereum. More than 50 businesses were quickly spawned out of its Brooklyn headquarters, ranging from a poker site [again with the poker–Nesson and Lessig will be so pleased. What about you know who?] and a supply-chain company to a prediction market, a healthcare-records firm and a cybersecurity consultancy.
But there were no fundraising rounds or debt offerings. In Lubin’s version of the decentralized future, he is the architect, CEO and central banker, funding all of ConsenSys’ “spokes” from his personal cryptocurrency stash.
Lubin has yet to veer significantly from this master plan, despite serious cracks in its foundation. …The crypto landscape is littered with the carcasses of ill-fated Ethereum-based ICOs [“Initial Coin Offerings” yes, that’s right], and now the SEC and other regulators are targeting some of them for enforcement action. In November, the SEC settled actions against two Ethereum-based startups, Airfox and Paragon, which had effectively sold $27 million in unregistered securities when they issued their ICOs in 2017. Both tokens are now basically worthless…But almost all blockchain technologies remain glacially slow. Ethereum can process only about 20 transactions per second. By contrast, Visa can handle 24,000. [So trillions of streams should be no problem, right? Why go to Visa when you can get the ether?]
Yet Lubin’s organism keeps growing. ConsenSys has 1,200 employees [now 900 according to Wikipedia], and some 200 job openings are posted on consensys.net. Though ConsenSys declined to comment, Forbes estimates that almost all of its businesses are in the red, some with little hope of profitability. Lubin’s global organism appears to be burning cash at a rate of more than $100 million a year. [So cash infusions from MLC are just the ticket.]
When worried staffers have questioned Lubin about ConsenSys’ sustainability, Lubin has always had a pat reply: “Joe would say, ‘This is definitely not something you need to worry about. We can go on at this pace for a very, very long time,’ ” recalls Carolyn Reckhow, a former director of global operations who left ConsenSys in May.
And it goes on. And on. And on. This might be the kind of thing you read before you give them money. Like Noah built the ark before the rain.
According to CoinDesk (yes, that’s right, CoinDesk), Mr. Lubin began rethinking his business model last December:
Beginning last month [December 2018], layoffs have swept across nearly every corner of the distributed, 1,200-person [ConsenSys]. Lubin announced that “ConsenSys 2.0” would seek efficiencies – and a broader reliance on outside partners and investors. “Spinning out” these ventures has gone from an aspiration to a mandate.
“We have been interacting much more with external investors, mostly VCs, over the last nine or 12 months,” Lubin told CoinDesk during an interview in early December. “We’re gonna be ramping that up significantly.”
But even if ether prices recover and ethereum-based tokens come back into vogue across the broader marketplace, former employees and prospective investors tell CoinDesk they worry the road ahead for these projects may be rocky.
Simply put, because of the unusual way ConsenSys structured its investments, it will be hard persuading outsiders to put money into them.
Out of seven current or former ConsenSys employees interviewed by CoinDesk, four said they felt misled about the company’s employee share options. Although most employees are verbally and contractually promised they will soon have an opportunity to obtain ConsenSys shares, few receive it or are able to use it, said the sources, all of whom spoke on the condition of anonymity.
Now, after a year of discontent, ConsenSys is imminently expected to announce an official policy regarding employee share options, according to one of the sources. ConsenSys declined to comment for this article. We will update if we hear back.
“People would bring it up in town halls and Joe would say, ‘We’re working on it,’” one source said about Lubin’s repeated verbal assurances. “I didn’t know how important equity was or that I should fight for it. I definitely felt taken advantage of in that sense.”
With regard to shares for ConsenSys proper, which slightly over 100 early employees have allegedly received but few have tried to sell, another source who did receive equity added:
“If there’s no public offering and there’s no buyback program from the company, then that equity is not valuable.” [Spotify calls this a DPO.]
The next hard fork, Istanbul, will contain several EIPs and is due for mainnet activation at block 9,069,000. Istanbul is currently live on the Ropsten, Kovan, Rinkeby, and Gorli testnets. Collectively, the EIPS are designed to increase chain scalability and decrease transaction and smart contract costs.
The approved EIPs include; adding the Blake2 hash function to the ETH virtual machine (EIP 152), reduced alt_bn128 precompile gas costs (EIP 1108), adding a ChainID opcode (EIP 1344), repricing for trie-size-dependent opcodes (EIP 1884), a transaction data gas cost reduction (EIP 2028), and rebalanced net-metered SSTORE gas cost with consideration of SLOAD gas cost change (EIP 2200). ProgPoW is now likely to be included in Istanbul part two, sometime later next year.
Right. No idea what they just said? But regardless we wouldn’t touch it with an Istanbul Hard Fork.
Does any of this say “long term” to you? What if these guys aren’t around for the five year review by the Copyright Office? Are the bankruptcy experts taking a good look at what ConsenSys will or will not own in the way of data necessary to operate MLC if they go under?
Not to worry, songwriters. Your future is in their hands right next to their deep space capabilities. Whether you like it or not. And “deep space capabilities” will come in handy for the black box distributions.
Why do we think they are laughing their butts off over at the DLC?
Fee, fi, fo, fum, I smell fee simple from a brother in law…