Fighting Fraud And Piracy With Blockchain

Anyone who has ever posted a photograph or original piece of artwork on the internet knows that credit is fleeting. No sooner is it pinned, retweeted or shared then any metadata or watermark linking it to its source is stripped away or simply left behind as it spirals across social media platforms. By the time it reaches the end of the viral chain, even if someone wanted to offer proper attribution that information is all-but impossible to find.

A growing number of entrepreneurs are starting to tackle the issue of digital attribution and authentication, however, by leveraging the Bitcoin 2016-03-24 18-34-07blockchain. This month, New York-based Blockai and Los Angeles-based Verisart went live with new services that allow creators to register their works on the blockchain to create a permanent, indelible record certifying their patrimony and ownership.

The startups join a growing list of blockchain-based authentication services targeting the graphic arts, including Monegraph, ConSensys, ascribe, Stem, Mediachain and others. Just as the blockchain provides an open, self-verifying and decentralized ledger of Bitcoin transactions, it can also be used as a self-verifying database of other types of time-stamped events, such as the registration of a copyright. Those records, moreover, can contain a variety of kinds of data, including a hash of the work itself, the metadata to be associated with it, and information about permitted uses. Thus, any new instance of the work without that metadata would not match the original record and would be shown to be a copy. The permanent records also make it possible to recover the metadata even after it has been stripped away through subsequent uses of the work.

The ultimate goal of blockchain certification services, however, isn’t simply to handle record keeping but to enable commerce in digital works by establishing an open and permanent source of truth as to ownership and rights. Impetus for the effort can be traced to the estimated $6 billion a year in fraudulent sales or art and collectibles, according to Verisart co-founder and CEO Robert Norton.

“You have a marketplace with a lot of fragmented databases [of works] which makes it very difficult for any dealer, or gallery owner, or museum to verify the authenticity of something,” Norton told Concurrent Media. “Our goal was to create open, tamper-proof records that would make it harder for fraudulent activity to take place.”

Norton also thinks an open ledger of works will open new channels of commerce.
“Right now online sales [of art and collectibles] are about $2.7 billion, out of a total market of $60 or $70 billion,” he said. “We thought that fraction was too small and we though certification could help increase online sales.”

Incremental commerce is also the goal of blockchain-based initiatives in other rights-based industries, such as Dubset’s MixBANK marketplace. Earlier this month announced a landmark deal with Apple to manage clearances and royalty payments for DJ mixes and other mashups on Apple Music, opening the door to making thousands of hours of derivative works to appear on commercial streaming services, which Dubset CEO Stephen White estimates could eventually yield an incremental $1.2 billion a year in revenue for the music industry.

Blockchain-enabled commerce will be a main topic at an upcoming RightsTech Summit produced by Digital Media Wire in partnership with Concurrent Media. Stay tuned for details.