Block Label

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NOKcoin

Now and again we'll do payouts as a proof of concept even though our current streaming numbers aren't anything to brag about.

From the start of this year to the end of February a total of 977 units was sold. With such a low count, doing an example with bitcoin isn't really that good. FANTOKEN holders would need to have enough tokens to receive a minimum of 5500 satoshis (0.00005500 BTC), this is a “dust limitation” in the Bitcoin protocol.

At current bitcoin price levels, 977 units sold would equate to around 32 satoshis per FANTOKEN. Which means you'll need to have 172 FANTOKEN to receive anything.

We don't want to exclude anybody, especially as this is merely payouts as a proof of concept. What we've done for the payouts this time round is to use NOKcoin.

What is NOKcoin?

NOKcoin was created on Counterparty last year and is similar to what they've recently done in Barbados with the blockchain-based version of the Barbadian dollar.

However, NOKcoin is unlike other currency pegs. It is just as much a thought experiment of transferring the value of a national currency onto the bitcoin blockchain.

The national currency in question here is NOK (Norwegian krone). Transferring from the Norwegian krone to NOKcoin is always set at a 1:1 ratio. What's interesting is that the amount of kroners spent on NOKcoin is used to purchase bitcoin. This is then sent to a paperwallet that acts as NOKcoin's gold-standard in the form of bitcoin. Which means NOKcoin can potentially be worth more than the original.

NOKcoin was also created in a unique way. To prove that it wasn't created out of thin air, the first 50 NOKcoin was created after a “Proof of Shredder”. The shredding of a 50 kroner note was filmed under UV-light.

The next 50 was created when NOKcoin was purchased with the Norwegian kroner. At the time this equated to 0.01373093 BTC (after subtracting miner fees involved with issuance and sending) which was then sent to the paperwallet/bitcoin-reserve.

Right now there's only 100 NOKcoin in circulation, and it will only increase when somebody purchases NOKcoin with the Norwegian krone.

All in all it's a currency backed by bitcoin in more ways than one.


Links:

Payout calculations

Blockchain-based Barbadian dollar

Proof of Shredder (Caution: Do not try this at home if you are based in the US. You have laws against it: 18 U.S.C. § 333)

Purchase NOKcoin (only available to those with a bank account in Norway) 

NOKcoin's bitcoin-reserve address

The announcement of NOKcoin on Reddit (this is in Norwegian) 

Bonus:

The 50 kroner's recent appearance in House of Cards

Update on payments

Block Label wants to do monthly payouts, there's no question about that! It's only fair, however, there are several challenges to face when accounting this correctly:

  • Block Label receives settlement reports and payment every quarter.

  • Settlement reports aren't always complete. Services send their reports to our aggregator with a 1-2 month delay. If a service hasn't sent in the monies owed, this gets pushed to the next quarter.

 

Here's how Block Label will base its payouts:

  • Monthly payouts based on the trend reports we receive. Trend reports are unofficial sales data.

  • Any deviation will be corrected with an extra payment after we receive the quarterly settlement.

Based on previous settlement reports, the minimum amount I've received for a unit (stream/download) was 0.02 NOK. We will use this number to figure out monthly payouts.

E.g. if the trend report shows 100000 units sold, the equivalent of 2000 NOK in bitcoin will be paid out. (100000 x 0.02 NOK = 2000 NOK)

When we receive the quarterly settlement report and it shows that we earned more than what was paid out, we'll make up the difference with an extra payment.
On the other hand if the report shows we paid out more than what was earned, this figure will be deducted, spread evenly over the course of the following 12 months.

 

This isn't a perfect solution, it's a little give-and-take for everybody involved. We can always put this up to a vote later. I can issue “vote tokens” to the artists and ultimately they will decide. I'm positive having monthly payouts is the best solution moving forwards at the moment.

 

Note: Due to the fact monthly payouts are coming out of (my) pocket, there will be a limit to what's possible to payout. This all depends on how many units are sold. Thousands of units are doable, millions aren't. In such a case, this will be accounted for with the extra payment as mentioned above. Please keep that in mind and thanks for understanding.

 

Achievement Tokens

This post was edited on Sept. 12, 2015

I've gone into how funds are distributed in a previous post. Now, an explanation to what happens if there is a breakout artist and what happens to tracks that receives more streams than others.

Tracks with more streams are generating a larger profit for everybody involved with Block Label. Hence, they deserve a larger reward. As stated on the front page, artists receive 85% of Block Label's total profits.

The artists share will be distributed like this:

  • 70% to Block Label Tokens
  • 10% to Level 2 Achievement Tokens
  • 5% to Level 1 Achievement Tokens

 

What are Achievement Tokens?

When a track receives a certain amount of streams, “Achievement Tokens” are sent to the artist. These are sent once a month before payouts are made.

Artists will receive:

  • Level 1 Token: For every one hundred thousand (100,000) streams/downloads the track had within the previous month. Max 5 tokens per track.
  • Level 2 Token: For every one million (1,000,000) streams/downloads the track had within the previous month.

 

What happens if there aren't any tracks that have enough streams/downloads for “Achievement Tokens”?

  • If nobody has “Level 2 Tokens”, that share (10%) will go to Level 1 Tokens: “Level 1 Tokens” will receive 15% of total profits.

  • If there aren't any tracks that have enough streams/downloads for “Level 1 Tokens”: Tracks with ten thousand (10,000) streams/downloads will receive “Level 1 Tokens” (15% of total profits)

  • If there aren't any tracks with ten thousand (10,000) streams/downloads: “Block Label Tokens” will receive the whole share (85% of total profits).

Proof of Concept

To give an example of the inner workings, three songs have already been released through Block Label. They're some old tracks of mine, so the numbers aren't impressive. Here's what the statistics I receive looks like:

The streams are coming from me playing them to see if they are getting registered. I'm slightly concerned with the count from Spotify though. I left the songs on repeat for a short period of time when testing it out, but I've read they have some anti-spam/repeat measure, so this could very well be the reason for the low count.

Tokens

Block Label tokens have been created! You can see them here.

Since a token represents each track, the artist (me in this example) should receive three tokens. For the sake of the next examples I've sent them to three different addresses. You can see the transfers to each address here, here, and here.

If you look at the last address you'll see that I've split and sent the token to other addresses. Here, here, and here

Why?  
E.g. if the token represents a song that was done with other band members, they can keep their share of the song/token. In this case there are three other band members.

 

Payments 

When Block Label makes a profit, artists will receive payments via their tokens.

So, lets say the artists share of profits is 0.003 BTC (bitcoin).

Since Block Label has distributed 3 tokens, each token should receive 0.001 BTC.

Here's the transaction of that payment. On the right you can see:

  • The top two addresses received 0.001 BTC; they have 1 token each.
  • The next four addresses have the token that was split between band members; they received 0.00025 BTC

(The last address can be ignored as it's a return sum/balance of the sender. It's the same as the senders address on the left)


Hope this helps to give a better idea on the flow of things. Don't worry if all these transactions look or sound a bit strange. I still find them so, but it gets better. Give it some time and you'll get used to it.

As an artist it's important to think of these tokens as a contract and tool between you and Block Label. It's your proof of contribution and the way you'll receive future payments.

 

Will H