“Bitcoin For Rockstars” Mastermind D.A. Wallach Revisits His Utopian Vision for the Music Industry

Discovered by Kanye West and Pharrell Williams while still an undergraduate at Harvard, D.A. Wallach was on his way to music stardom. In 2008, one year after graduation, his pop-rock duo Chester French signed with Interscope Records imprint Star Trak Entertainment, and the lead singer joined Spotify as one of the streaming service’s first Artists-in-Residence four years later.

But one major problem loomed: Wallach and his bandmates weren’t actually earning income in a predictable, intelligible way—and especially not as major-label artists.

The way money flowed through the music industry back then—and often even now—put artists at the bottom of the priority list. Instead, the dollars that the average music fan paid for a CD or streaming subscription were first allocated to a crowded chain of intermediaries including labels, publishers, digital distributors, and performing rights organizations, all with their own siloed accounting methods, reporting standards, and payment timelines.

Amidst this fragmented landscape, Wallach was also carefully studying the digital innovation surrounding the music business, and found a potential solution in a technology whose revolutionary use cases were just starting to take shape: blockchain.

In Dec. 2014, the musician-turned-investor outlined an ambitious proposal for how blockchain could transform the music industry in an essay called “Bitcoin for Rockstars, How Cryptocurrency Can Revolutionize The Music Industry.” In Wallach’s eyes, there were two separate but equally stubborn problems in the music business that could benefit from the burgeoning technology: paying artists fairly, and figuring out who owns what.

Wallach grounded much of the essay in his firsthand struggles as an artist. “It’s extremely difficult to piece together a clear picture of one’s financial life,” he wrote—describing how “checks for widely varying amounts randomly show up in the mail each month, from all sorts of different issuers,” with “all of the receipts represent[ing] different rights categories and earnings periods.”

On the industry level, ownership data for a piece of recorded music is often “fragmented between a large number of databases that don’t sync with each other,” wrote Wallach, who once spent two weeks trying to figure out who to contact to obtain a license for using a song in a commercial. “For an industry seeking to rebuild its economic livelihood, this is an enormous problem.”

How could bitcoin serve as a blueprint for disillusioned rockstars? Wallach offered a two-pronged solution for weaving blockchain into the music business: a “universal, authoritative reservoir” for rights and credits ownership data, plus an “instantaneous, frictionless payments-routing infrastructure” to get money to artists and rights holders more quickly. Both components would be “decentralized, open-source,” and “owned and controlled by no single entity,” as opposed to kept in stubborn silos within major music corporations and tech companies.

With payment automation in particular, “the record deal of the future could primarily be a set of smart contracts … that establish very clear protocols for how an album’s address should automatically split different income streams between an artist and a label,” added Wallach. His ambitious proposal preceded several other blockchain and smart-contract projects from artists including Imogen Heap, RAC, and 3LAU, in collaboration with Ujo Music, Breaker (formerly known as SingularDTV, BREAKERMAG’s parent company), and countless other startups.

But fast-forwarding to 2019, is “Bitcoin for Rockstars” still viable—or was Wallach’s plan too far-fetched to fit the inherent conservatism of the mainstream music industry?

In a recent paper for the International Journal of Communication, researchers Nancy Baym, Lana Swartz, and Andrea Alarcon referred to Wallach’s essay as one of the first instances of a “radical utopian blockchain dream in music,” which has yet to be fully realized.

While blockchain music startups have collectively raised at least $150 million through ICOs and venture capital investment to date, few of these companies have actually rolled out a tangible, user-friendly, scalable application in the market—in part due to the challenges of convincing notoriously opaque stakeholders about the benefits of decentralization.

Hence, rather than becoming truly disruptive, the majority of today’s proposed blockchain music solutions are instead “incorporative,” encompassing a “far less ambitious, far more achievable, and potentially useful set of plans that might never have existed without the radical visions that inspired discussion,” write Baym, Swartz, and Alarcon.

In other words, no matter what you think about the viability of “Bitcoin for Rockstars,” Wallach’s essay has arguably played a crucial role in opening up new possibilities for music, by establishing a clear benchmark against which artists and other rights holders could more concretely measure their own progress as well as their limitations.

“Building a blockchain infrastructure that won’t collapse under the technological demands of micropayments, a huge volume of consumption, a huge inventory of product and a huge number of creators is not trivial. But I think that can be funded by all the world’s active music listeners contributing just 10 cents a month.”

Five years later, Wallach still stands by his original vision—but now has a clearer view on the challenges in its execution.

“This is primarily a human organizational problem, and not really a technological problem,” Wallach tells BREAKERMAG. “Building a blockchain infrastructure that won’t collapse under the technological demands of micropayments, a huge volume of consumption, a huge inventory of product and a huge number of creators is not trivial. But I think that can be funded by all the world’s active music listeners contributing just 10 cents a month.”

Wallach also admits that blockchain may now be unnecessary for solving some of the problems he delineated in his original essay, in the wake of adjacent technological advancements.

Yes, tracking rights and ownership for songwriters has gotten more difficult and complex over time, in part because the assembly line behind a given song has ballooned in size. The average streaming hit in the U.S. in 2018 credited over nine songwriters; Travis Scott’s “Sicko Mode” alone lists over 30 cowriters. But more advanced attribution and collaboration tools like Sessions and Sound Credit have emerged since “Bitcoin for Rockstars” to help artists record and verify credits throughout the creative process—with no blockchain in sight.

“You and I could now write a song, document our ownership splits instantly in software and then all payments and attribution that happen downstream of that could be automated,” says Wallach. “We can log in at any time and see how much money we’re making on that product. These tools didn’t exist when I was a full-time musician, and to the extent that they’re now available, I think it’s a positive shift for songwriters.”

There are also behaviors rooted deeply in music-industry norms, including pure human negotiation, for which Wallach believes blockchain alone is insufficient. “You could automate the software through which the actual transaction happens, or you can implement a bidding system,” he says. “But if something is indeed a negotiation—if a record label is paying someone to actively negotiate with you over the price for one of their songs—a smart contract may not be the most elegant way to instantiate that.”

So what is blockchain actually good for in music, then? One answer lies in perhaps the industry’s most buzzed-about controversies today: the perception that streaming services are unwilling to increase their payments to artists.

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In early March 2019, Spotify, Google, Pandora, and Amazon filed notices to appeal the Copyright Royalty Board’s recently proposed rate changes for songwriters and publishers, which would have boosted digital music services’ payments to these rights holders by 44 percent over a four-year period. The notices compelled David Israelite, president & CEO of the National Music Publishers Association, to claim that Spotify and its peers were “suing songwriters.”

Regardless of how the appeals play out, this controversy has illuminated how music creators, like in many other industries, lack the power to determine the price of their own goods. In Wallach’s eyes, blockchain could help decentralize and liberate the process of pricing for individual artists.

“In theory, on a platform like the one I’ve proposed, artists could specify different rates for different types of usage, or even for different types of users, and all of that complexity could be managed in an automated fashion,” he says. “I might not want the NRA to use my music in their advertising, but if they want to pay me $20 million for it, that might be a different story. That concept of having full price transparency between creator and consumer sounds crazy to people in music, but is completely normal in any other industry.”

Like many of his peers in the music industry, Wallach also believes that performance rights organizations, or PROs, such as ASCAP and BMI—tasked with collecting public performance royalties for artists and songwriters—are naturally most threatened from the rise of blockchain, which stands to replace PROs’ relatively bureaucratic practices around administering royalty and usage data for music.

But there’s another important function that PROs serve that cannot, and perhaps should not, be automated: collective bargaining on behalf of songwriters.


“They go to CBS and say, we have half of the world’s biggest artists, so we demand $200 million for our pool of payments this year,” says Wallach. “It’s not a super rational process, but it’s not like as an artist you can single-handedly walk into CBS and nudge your way into higher payment rates.”

Wallach is putting his money and energy where his mouth is, albeit rather selectively: His first and only third-party blockchain-music commitment to date is as an advisor to JAAK, a startup that is currently piloting a decentralized global-rights network known as KORD with several major music companies including Warner Music Group and BMG. JAAK recruited Wallach to its advisory board in December 2018.

“If we were to destroy everything right now and ask how we should be administering songwriting and performance royalties globally, we’d start with something that looks much more like JAAK than like ASCAP,” says Wallach.

The music industry could also benefit from studying how outside industries with equal or greater complexity deal with blockchain. Today, Wallach spends the majority of his time advising and investing in healthcare and biotech startups through his firm Inevitable Ventures. A handful of his portfolio companies involve blockchain, including Nebula Genomics, which just won the SXSW 2019 startup pitch competition.

“There’s a similar problem in healthcare and biotech with respect to decentralizing ownership of patient and health data, and managing expectations around that,” says Wallach. “You could think of the patient as an analog to an artist, and the former’s data as the latter’s music. There’s a similar need to create a system for people who need to buy and utilize that data that doesn’t exist today.”

And to Wallach, whether every element of “Bitcoin for Rockstars” will materialize in the near future may be missing the point.

“If you went and surveyed crypto pundits five years ago, they would’ve radically overestimated the kinds of results we’ve had by now,” says Wallach. “But their job isn’t to be fortune tellers—it’s to go build cool shit.”