Coda Music Agency's Jason Edwards, 6 Music's Tom Ravenscroft and The Great Escape director Kevin Moore will judge WeGotTickets' inaugural industry best-of
Sign up for IQ Index
The latest industry news to your inbox.
As the crypto market begins to recover from Bitcoin's early-2018 slump, the companies behind the some of biggest music-focused coins are bullish on their future growth
By Jon Chapple on 14 Feb 2018
The companies driving live music’s cryptocurrency revolution have insisted the future of blockchain technology in music remains bright, as the market struggles to recover from a dip that saw more than US$550bn in value wiped off between January and early February.
Representatives of blockchain ticketers Aventus and Crypto.tickets and live music marketplace Viberate – all of which have seen the price of their coins plummet since the start of the year – tell IQ they are unconcerned about the recent fluctuations in bitcoin and other ‘altcoins’, saying the underlying tech is more important than the price of their tokens and market cap.
“We were always expecting volatility,” says Vasja Veber, founder and COO of Viberate, whose VIB token has fallen in value from an all-time high of US$0.71 on 4 January to $0.26 as of today (14 February). “That’s the nature of the market: When it goes up everyone’s happy, and when it goes down… well, people aren’t!”
Veber says it “would have been a problem if it was only our token that fell [in value], but everything was in the red. The new investors who bought in in December bought into a bubble, which has deflated.”
Aventus director and co-founder Alan Vey says he hopes the crash will encourage investors to “think about other facets of the technology” behind the blockchain. “I think in this big ride, this crypto journey, people haven’t really appreciated the power of the blockchain technology,” he explains. “So far, it’s been mostly speculation on the price of coins.
“So, for us, the downturn isn’t too much of a concern, as there’s still value in what we’re doing. It’s all about the fundamental value for us.”
“There’s a lot of market manipulation out there”
“The price of bitcoin does not affect Crypto.tickets as a business and its tokens,” confirms Egor Egerev, CEO of the Russian company, whose TKTX coin has fallen from $0.14 to $0.04 on the Yobit exchange since 14 January. Egerev warns against conflating cryptocurrencies and the blockchain platform on which they’re based, which has applications in ticketing, licensing and music rights.
“We should divide the crypto space into two independent spheres: cryptocurrencies and blockchain-based start-ups,” he says. “We often merge the two: most of us understand ‘crypto’ and ‘blockchain’ as the same. But in the future, this will change, and we will consider cryptocurrencies as just a small part of the bigger blockchain world.”
Annika Monari, Aventus’s other director and co-founder, says her company has so far actively tried to avoid inflating (‘pumping’) the price of its AVT token, which will be used to power the company’s ticket sales platform. (One AVT coin is currently priced at $2.30, down from an all-time high of $6.76 on 8 January.)
“Right now, it’s just a game,” she explains. “There are lots of coins out there with no link between the volatile digital asset [the token] and the underlying technology.
“For us, it’s not about focusing on the tokens, or worrying about the speculation on their price, but about creating that fundamental value.”
“There’s a lot of market manipulation out there,” agrees Veber, alluding to the ‘pump and dump’ schemes in which traders conspire to artificially inflate the price of fundamentally useless coins before ‘dumping’ them for profit – something highly illegal in traditional, regulated stock market trading.
“There need to be clear rules of the game to get rid of scam projects”
“If you have shares in stock X it’s illegal for you to spread false news and take advantage of the increase in price,” he continues. “We follow the same rules as public companies, as we see our token as a publicly traded commodity.”
There are, however, as yet no laws in most of the world compelling such self-regulation on the part of blockchain/crypto companies, and new coins continue to con investors out of vast sums of money with alarming regularity (the most recent is LoopX, which pulled an ‘exit scam’ earlier this week after raising $4.5m in investment).
“The cryptocurrency market lacks regulation,” comments Egerev, who adds that there need to be “clear rules of the game to get rid of scam projects, and to strengthen start-ups that do create new markets and business models using blockchain”.
Monari says that while Aventus believes in free markets and doesn’t want to see “everything completely regulated” to within an inch of its life, “we’ve seen a lot of people hurt by fraudulent token sales, so there needs to be some degree of red tape.”
Ultimately, says Egerev, the success of Crypto.tickets and other companies applying blockchain tech to live music will depend less on their coin price and more – as it should – on the quality of their offering. “Industry expertise and experience is more important than positive positioning,” he says, “so those who can present ready-to-use systems in 2018–2019” – such as Crypto.tickets’ blockchain ticketing platform for Kraftwerk’s recent show in Moscow, and the recently launched BitTicket, which has already partnered with several festivals in the UK – “will be the ones changing the industry through blockchain very quickly”.
“Some people are focused on getting best price possible for their market caps,” concludes Monari. “But we’re focusing on building our product, and the market will ultimately reflect that.”
Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.