Everybody agrees on the fact that the future of music will be like tap water. It will be available instantly everywhere. From the cloud to the skies (where you can listen to streamed music on airplanes). With the current streaming services the future is almost here. But not quite yet.

I believe music – and most other digital products – will be distributed on ‘the block chain’ in the future. The block chain is the next generation P2P network services that the crypto currency Bitcoin runs on and is a gigantic series of networked servers connected by open source software, an activist community and cross platform apps.

The open question is who will win this race for the music fans in the future? Where will we go to get our musical fix? There are already numerous destinations, and new ones announced all the time, but I think most of them will fail because even though they are seemingly advanced technological ventures they are based on old business models, where a single company control everything in a relatively or totally closed environment.

Amazon run their own massive server farms as do Apple, Google, Spotify and other players in the market. But they don’t share these servers with anyone. Except the NSA, that is. They are strictly controlled by commercial companies with business models based on advertising and classic profit generating for the owners handled by their accountants, lawyers and Wall Street.

“Funding a civilization through advertising is like trying to get nutrition by connecting a tube from one’s anus to one’s mouth.”

― Jaron Lanier

I have bought tons of music on Amazon, again on iTunes, again streamed on Spotify and then again on YouTube (where Google has a golden opportunity to be the market leader if they took piracy more seriously and paid the artists more handsomely). I have bought the same David Bowie songs 10 times over on several formats throughout the years. And I will do it again in the future. But it will be in a totally different way. I will not really notice I buy it, the way I don’t notice I pay for my water, when I run the tap.

Here is how I think it will play out. The game is about computer power (servers, processors, storage, software, applications) for distribution, rights handling and payment systems. And it will be built on the block chain. The decentralized P2P servers that Bitcoin run on are actually more powerful than the Amazon, Facebook and Google farms. And they will be even stronger in the future. Imagine when we all have a server connected to the network and the entire Internet world will be one giant ‘people server’ that everybody share. No single company, not even Apple with their $40 billion in cash, can compete with that.

Remember that all digital music has a watermark and can be identified easily. This can also be handled effectively by the block chain. The Bitcoin system we know today is an early version. Bitcoin 2.0 will be a totally new experience where you can have automatic micropayments hooked up with the content controlled by the digital watermarks. And the great thing is that everything will be available everywhere, all the time on all platforms. And everybody will pay a small amount each time they download (for high quality, portable files, maybe in the Pono format) or stream their content. With piracy eradicated and everybody paying for everything bypassing the accountants and the lawyers (made obsolete by the block chain), record companies and especially artists will be payed accordingly which in the future means a much, much higher fee.

So the future is very bright indeed. Not only for the fans, but also for the A&R people working to connect the fans with the artists (let’s call them record company 2.0, just for the hell of it) and – most importantly – the people who make the music, the artists themselves.

The social components on these new services will also be much stronger. We don’t talk so much about ‘the semantic web’ anymore. It is just there. But we do talk about quality time, off time, the human touch and real social dimensions. The live experiences and the recording experiences will come together. They will also appear in some form through ‘the people network’ and user friendly apps.

When will this happen you ask? I think we will see some of the first movements on destinations like BitTorrent, who can easily deploy their existing P2P network into a legitimate streaming service with rights management and transparent Bitcoin payments. It can come from existing players or totally new businesses we have never heard of. Remember how quickly companies like Google rose to fame and into mammoth companies.

We are in the middle of a revolution and entering a new business world. Stacy Herbert and Max Keiser call it ‘Capitalism 2.0’. They just did a show about it [full show]. Here is a teaser:

Say goodbye to the middlemen, say hello to the people’s network.

UPDATE! There is a related prediction here.

You can follow me on Twitter here and on Google+ here.