As a revolutionary technology, blockchain offers a lot of benefits for different industries, especially the creative economy. Sure it’s been synonymous with scams and extreme market volatility, but at its core are a few ideas that can benefit the creative industries.
The Primer on Blockchain
Blockchain is a form of disruptive technology that’s increasingly being adopted as a highly secure decentralized public database. A selling point is for individuals to make transactions without intermediaries, like say a bank. Each “block” in the chain has information such as the following:
- Transactions: when, where and amount.
- Participants: who transacted with who (somewhat anonymized with a digital signature similar to a username).
- Hash: information that helps tell two blocks apart from each other. Even similar blocks each have a unique code called “hash” that’s created with special algorithms.
A single block may store thousands of transactions and that block exists as thousands or millions of copies (along with the entire chain of blocks) on different computers. Every time a transaction takes place, that transaction gets verified all those computers before it’s added as the most recent block. Any attempts to change the information about a transaction will also change the hash.
To change a single block, that means someone with the intent (say, a hacker) would have to change every block that comes after, which is nearly impossible except in the instance of unlikely 51% attacks.
How Blockchain Can Protect us
In an article from McKinsey & Company by Ryo Takahashi, he outlines five forces blockchain tech presents for the creative industry and how they can protect the work of creatives:
- Smart Contracts: blockchain networks can host smart contracts to help artists manage digital rights and share revenue. Meaning an artist can automatically get paid when somebody consumes their work. We’ve seen this concept applied to digital art ownership and collection in one of our previous stories on R.A.R.E Art.
- Transparent Transactions: because of the transparency and robust tamper-proofing of blockchain, one of the appeals is that transactions for creative work can be easily seen and validated, increasing confidence in the platform that employs the technology.
- Micro-Monetizing: Takashi describes “micrometering,” which works by having the blockchain “record the precise components of the creative work that were used, defining the smallest consumable unit of creative content.” This could theoretically allow for the smallest units of creative work done (say, a few seconds of video footage) to be attributed, priced and compensated.
- Dynamic Pricing: creatives could set prices themselves and control them regardless of the fluctuations in supply and demand that would normally affect creative content. Especially for stock assets, this could prevent a creative’s work being randomly put on discount if their platform wants to run a sale.
- Reputation System: by being able to trace creative work, this means that credit is accumulated where credit is due, which could ensure better collaborative relationships and behavior.
Other areas where blockchain can come into play is authentication of luxury goods (knowing when and where a product was produced) as well as interesting concepts such as community governance and voting through proof-of-stake consensus algorithms.
While there is a lot of promise for blockchain in empowering creatives in their industry, the technology in that context remains largely unknown, unadopted and mostly unpopular. This is because creative work and the living that people derive from it isn’t solely the domain of the workers who create the work, but of a network of several related fields like marketing and management.
These industries that tie-in would need to be on-board as well, lest an artist is able to say, securely protect and authenticate their work on the blockchain but have no means of distributing it and collecting payment from there.
As Takashi points out as well, the current technology prevents creative media from being directly stored on a blockchain (and there are likely plenty of creatives who wouldn’t want to do so either) and a lack of popular enough infrastructure to handle the micropayment features and would need modifications.