Copyright and the blockchain

 

I recently saw a Twitter thread discussing copyright and the blockchain, and remembered that I had started writing a blog post about it and never finished, so this current post will try to remedy that. While I have written extensively about the blockchain in the past, copyright itself has not really been of much interest in the research community, perhaps because the use cases have not been very prevalent in the media.

If we define the blockchain as an immutable decentralised database, then it could be easy to see some potential uses of the technology for copyright, and in particular for the creative industries as a whole. Blockchain technology has been suggested for management of copyright works through registration, enforcement, and licensing, and also as a business model through micropayments and tracking use. I will go through these without mentioning too much specific existing implementations and projects.

However, the actual application may depend on the exact definition of what is a blockchain, and this is not particularly easy as it seems that sometimes variations are used, as has been explained here before. For the purpose of this blog post I will use Google’s definition, a blockchain is “a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly.”

Registration

Perhaps one of the most cited copyright uses for blockchain is that of registration. Unlike other IP rights, copyright subsists without registration, although some jurisdictions require it for enforcement of rights. Nonetheless, voluntary registration of some sort can be useful in some instances, and there are those who still advocate for the usefulness of copyright registration in a variety of situations. Registers can help to diminish the problem of orphan works, but also having some sort of registering authority can serve as a filter of what is an actual work protected by copyright.

Assuming that some creators will want to register their work for whatever reason, the potential existence of an open database of copyright works that is also decentralised makes some sense. A blockchain registration system would allow an author to provide robust evidence of ownership and would also give the user a unique identifying address. A registration service could also act in conjunction with other management elements, such as allowing payments.

While a decentralised and immutable record of ownership may sound appealing, there are quite a few issues. The most obvious one is making sure that the work’s owner (or an authorised agent) is indeed the one registering the work. Existing centralised registration schemes have a procedure in place to check claims of ownership, and while it may be slow, the system ensures that a certificate is awarded to a legitimate author. A decentralised service would have to have some sort of authority that ensures that an ownership claim is not entered by an illegitimate actor, but then that would defeat the purpose of the decentralised ledger. Moreover, once entered into the blockchain, the record is immutable, in which case wrong authors would be forever recorded in the blockchain.

There may be ways around some of these issues, but the solutions may mean that the technology is not really a blockchain, but something else.

Enforcement

Another proposed use of blockchain technology in copyright is to use it as an enforcement mechanism, particularly as part of a digital rights management scheme. The idea is to have a work represented as a unique address on a blockchain (which could also be attached to a registration system), and that this would inform the owner when a work is used. Under this system, browsers and media players could be built to only play and/or display authentic works registered on the blockchain. Sony has already patented such a technology, and there are other organisations exploring similar proposals, such as the JPEG standard committee.

Of all of the copyright-related ideas, this one is one of the ones that scares me the most because of the potential for misuse. This issue is connected to the registration problem highlighted above, and it would be one in which a person maliciously makes an ownership claim to a work they do not own. The Sony patent gets around this problem by relying on a registration authority, so we are back to having a centralised system that issues ownership keys, which again goes against the decentralised notion of a blockchain.

But the main problem is that a blockchain DRM could prove to be extremely detrimental for users by severely limiting copyright exceptions. One of the main criticisms of Art 13 of the proposed European Copyright Digital Market Directive has been that it imposes the deployment of filtering mechanisms to intermediaries, the so-called censorship machines. Now imagine such a filtering system using blockchain technology, where no fair dealing and fair uses are allowed: no parody , no educational use, no commentary, and no reporting. All because the machines says no. There is no recourse in case the system makes a mistake because the blockchain is immutable and distributed.

Computer says no. Forever.

Micropayments

One of the most talked-about potentials for the creative industries with regards to cryptocurrencies and the blockchain is that of empowering a micropayment marketplace for copyright works. Imagine a future in which, thanks to blockchain registration and DRM, every time a song is played, a movie is watched, or a picture is copied, there would be a permanent record of that use in a public ledger, and the use could be charged to the user’s electronic wallet. This would immediately erase piracy and allow creators to obtain a monetary reward through cryptocurrencies.

One of the early adopters of this idea is Imogen Heap, who managed to get quite a lot of traction in the press due to her use of blockchains in the release of her song Tiny Human. However, the experiment only produced a tiny return of about $133 USD, hardly a ringing endorsement of the model. Having said that, there are indications that some big players are really looking into the use of the technology in some form of another, with Spotify reportedly having purchased music blockchain startup Mediachain.

While micropayments may seem like another fantastic test case for the blockchain, there are quite a few issues. The first one is that, for all their early promises, cryptocurrencies have proven to be a terrible method of payment due to lack of scalability, slow transaction rates, and potential high transaction costs. The reason for this is the need for blockchain technology to rely on every transaction being recorded, as well as the need to reward miners and nodes in the system. Bitcoin is no longer a viable payment system for micropayments, and its use in commercial transactions continues to fall. Other cryptocurrencies have been plagued with scalability issues, with the Ethereum network being clogged up when digital apps become very popular. Now imagine a global system designed to record and conduct all sorts of transactions for digital content, and you will start to see that scalability could be a very real issue.

Some technical solutions have been suggested to alleviate the scalability problem, such as off-chain transactions and the creation of a micropayment network on top of existing cryptocurrencies. However, at the time of writing such solutions have not been fully developed, and some contend that they may not even be viable at all.

In the end, the main problem may be one of business models and commercial realities. Subscription systems such as Spotify, Netflix, Apple Music and Amazon Prime have proven extremely successful because consumers hate micropayments. Why then should we try to rely on slower, more cumbersome and untested systems that do not offer user improvements?

Licensing

In my opinion, licensing could be one of the most viable uses of blockchain technology in copyright through the implementation of smart contracts, if deployed in a limited manner. At the most basic form, smart contracts are instructions written in code in the blockchain, they can be used for parties that have no previous interaction to conduct legal transactions with one another .

A licence is simply a legal document that allows a user to perform an action otherwise restricted by copyright. For example, this blog is released under a Creative Commons licence that allows everyone to copy, distribute and even re-publish it for non-commercial purposes. A smart-contract implementation of such a licence would allow me to write those terms into immutable code on the blockchain, and if someone wanted to re-use my content commercially, then this could be transacted automatically through the licence.

There are a few issues with this, but they tend to be similar to the problems faced by smart contracts in general, and this is not the place to elaborate too much on those (stay tuned). The immutable nature of the code can be problematic in case of bugs, and also it becomes difficult to change one’s mind on already existing contracts. There are also the problems of scalability described, but for the most part, licensing does not require a central authority, unless a person tries to licence something that does not belong to them, in which case we are back to square one.

Nonetheless, licensing is a potentially good test case for blockchain, and I am willing to hear from people who have been trying to use smart contracts to write licences, so far I have found a few proposals, but nothing concrete.

Concluding

There may be many possible uses of blockchain technology that are being developed, and at some point there might be successful applications of the technology in the copyright industries. As of today, I still see too many issues that match other problems I have with blockchain implementation in general, but that does not mean that these may be solved in the future.

The question at the heart of any blockchain implementation always remains the same, what is the problem that you are trying to solve, and is the blockchain the appropriate technology to solve that issue?

For example, open source software has been managing quite well with dumb licences and distributed version control (such as github), and I have not seen a rush to replace many elements of software development for blockchains.

Other industries may want to look at software before jumping on the bandwagon.