Bitfury Surround CEO Stefan Schulz: “Unlike Apple’s iTunes, the entire music industry is involved in the platform.”
The Dutch crypto company Bitfury is known as a manufacturer of mining hardware. Now the company wants to conquer the music industry with its independent subsidiary Bitfury Surround based in Berlin. With SurroundTM, Bitfury creates a digital platform for monetizing and sharing intellectual property. CEO Stefan Schulz explained to us in an interview how the ambitious project should succeed, why Artificial Intelligence plays a decisive role and utility tokens are out of the question.
Stefan Schulz in an interview: Artificial Intelligence, Security Token and SurroundTM from Bitfury.
Question: You worked for Universal and you know the music industry. What do you think, how will the music industry react to a decentralized open-source music platform?
Schulz: It’s going to be a longer process. Because when you push transformation, you do not just have fans. But I know that the industry is open to such a collaborative and decentralized infrastructure. Many market participants are even waiting for someone to push this issue at the corporate level, making blockchain technology integrable into their internal processes.
Question: Which middlemen should be specifically bypassed?
Schulz: The mission to bypass middlemen definitely does not exist. Rather, it is about tackling inefficiency, injustice, lack of speed and lack of innovation. So we want to bring out the best from each stakeholder – and not force any participants out of the chain. Apart from the fact that we are not in this position, it would not make sense in our vertical. For the music industry is a rather fragmented, but also very collaborative industry. Hardly any company in this industry can control a product single-handedly.
Question: And how are the artists compensated on your music platform?
Schulz: Basically, there is the problem that the average asset value in the copyright area is falling. On the other hand, the use of content is increasing. This is mainly due to the progressive success of streaming and the development of emerging markets such as China and India.
At the same time, however, the music industry is an industry that still can not compete with the platform economy. That’s why market power is largely in the hands of the platform economy – and of course taking advantage of the opportunities it has. Therefore, the growth here is ten times as big as that of the music industry as a whole.
The problem is more complex. For example, today I do not even have the opportunity to legally register a copyright online. Registration alone costs a lot of time and is inefficient. A central component of our infrastructure solution will therefore be a global platform for copyright registration.
This transformation results in three key levels of remuneration: First, we allow a single value analysis that optimizes the value of the music market as a whole. Second, we improve process efficiency – which increases the margin for each participant. And thirdly, every participant in the music industry is involved in the platform, which is an essential asset of the blockchain world.
Question: What is the strategy to quickly get artists onto the platform?
Schulz: We are further than we initially thought, readiness and enthusiasm are greater than expected. Unlike Apple to launch iTunes, we set up the system so that everyone who participates, participates in emerging transformation profits for the industry. Not just those for his own product. So this will be a collaborative business model that can be guaranteed through an industry-wide blockchain platform.
Question: Artificial intelligence should also be used. Just a marketing buzzword or is there more to it?
Schulz: Bitfury invests heavily in Artificial Intelligence. This can be helpful, especially for data streams. Of course, if data from the music industry is available on the platform, it also needs to be enriched – and that’s about Artificial Intelligence (AI).
Blockchain and AI are the killer combination in combination: With the blockchain you ensure a clean data integrity and with AI you can still put the “turbo” of a data analysis over it.
Question: As numerous projects in the crypto sector have shown, it is extremely difficult to set up a token economy or issue a token that is really used. How do you want to solve this problem so as not to fail like most other ERC20 projects?
Schulz: First of all, we have to say that we are talking about an ecosystem based on real assets. That is, everything we do has a real equivalent; that’s about $ 50 million per day in the industry. At present, however, this value is still measured in local currencies such as the US dollar or the euro. But I do not want to rule out that there will be a token in the near future. Then this token will definitely be a security token too – optimized for the asset copyright. We certainly do not think of utility tokens. Just as one can own real estate through tokens, one can also tokenize the copyright ownership of a hit from the 80s. Copyright is a normal asset.
Especially nowadays so-called non-tangible assets [intangible, non-physical assets, note d. Red.] Play a much bigger role in Fortune 500 companies’ portfolios of securities. Therefore, there is a great need for us to equate copyright assets with classic material goods.
Question: What are the next steps?
Schulz: Currently we are working on the first live version (V0). But this will be more like a base version as with all other platforms. In parallel, we want to set up a test market. In other words, as a test environment, we envisage a complete country in which we can try our platform with the industry in live operation.