The Blockchain is a secure, decentralized and secure digital storage and transmission protocol. It allows to create and maintain a transaction ledger, on the state of which all the users can agree, thanks to a shared algorithm, without using any external trusted third party. One of the advantages of the blockchain is that it is nearly impossible to corrupt the ledger nor to erase previous records.
Specifically, a simple transaction involves the transfer of money between two parties, as in the case of bitcoin. A more complex transaction may involve the grant of any right of ownership over any type of good between two parties. For example: donation, rental, subscription, loan, concession of loan right…
When it comes to property rights over a good or asset, a transaction ledger is a book that records all transactions on that asset. It allows to get 3 types of information:
- History of the transactions.
- State of the property rights over this asset: it belongs to A, B it is lent until December 31.
- State of rights of an individual over this asset : B has the right to use it until December 31.
These transactions can take place as the expression of contracts, also recorded by the blockchain, along programs called «smart contracts», which are automatically executed as soon as their conditions are met. For instance:
- If the sale is not completed, enter the addresses and bid amounts for each participant.
- When the sale is over, select the maximum bid, announce the winner and return all other amountqs.
- Insurance contracts:
- If the plane arrives late, pay an X $ premium to each insured passenger.
It is also possible to record more generally all kind of transactions that need to be certified, such as votes, polls, bets, lotteries … etc.
Information on transactions (money transactions, contracts, votes, bets …) are recorded in «blocks», which are files that record and date the history of all operations. The blocks are linked together and each block N contains several transactions or operations which, by linking them, reconstitute the whole history of these operations, in a chronologic way.
Each block is connected to the previous one by a cryptographic technique, which plays the role of summarizing the previous block. It contains:
- His own hash, which identifies the block N.
- The hash of the block N-1.
Hashes are asymmetric functions: they do not allow to reconstitute the contents of the blocks, but if the hash of the block N-1 had been modified, its hash wouldn’t correspond any more with the hash registered in block N … and so on. This allows to guarantee the integrity of the block chain. The entire blockchain is stored on thousands of computers, which represent the «nodes» of the network. If a computer fails or is attacked, it doesn’t affect the blockchain. The nodes constantly check the history of the Blockchain. Thanks to the hash functions, they can prove all transactions history and confirm that, yes, on 15/10/2017 at 16h, Mr X paid € 50 to Mr Y, against the purchase of the asset B.
To be validated, a new operation must be cryptographically signed by the individuals who make a transaction, and then added to a block. Writing in a block is performed by one or more «miners», who are selected according to secure protocols that prevent piracy, and who have the right to register and date the last transaction. There are several miner’s selection protocols, including the “Proof of Work”, used for Bitcoin. This protocol consists in asking to solve a mathematical problem which requires necessarily high computation resources. This cannot be reduced by a mathematical formula (in the case of Bitcoin, the problem to be solved is: find the number which, once hashed, begins with a series of zeros). Finding the solution can only be done by trying all possibilities and therefore is highly time consuming. When one of the miners finds the solution, it can easily be checked by anyone else. The first to find the solution wins the right to write the next block and is paid for his work, in exchange of a token (bitcoin, ether … depending on the nature of the blockchain).
Other selection methods can be used depending on the type of blockchain, for example the Proof of Capacity: selection according to the storage capacity of the miner.
The blockchain also allows to perform smart contracts, which are autonomous programs that automatically execute the terms of a contract, when their conditions are met. That’s what the Ethereum blockchain does. Bitcoin is a basic form of smart contract for money transfer, but Etherum can code much more complex smart contracts. Examples: management of match betting; auctions; conditional triggering of an insurance policy (the Fizzy program is for example used by Axa to automatically trigger the compensation of a passenger in case of delay of her plane), raised start-up funds. Thanks to the blockchain, a contract is stored forever, all users have copies and it is executed in the same way for all participants using the network.
But making smart contracts effective requires linking the blockchain to the “real world”, in order to prove the fulfillment of their conditions. Smart contracts cannot know what the weather is like, who won a match, at what time a plane did arrive, or whether a good was physically delivered. This is the role of «oracles», which are connected to databases that provide external information to the blockchain, to measurement devices or to individuals who add this information. Hence this raises at another level the problem of reliability of the information: the blockchain cannot be a totally autonomous and closed system, it requires the reintroduction of a trusted third party. As will be explained below, that requirement, to be connected to the external world by other means, will occur when trying to apply the blockchain to the security function of DRMs.
COULD BLOCKCHAIN BE USED FOR A NEW DRM SYSTEM?
One specific feature of digital content is that it is possible to transfer a property right without losing it, hence to duplicate infinitely a good. This breaks the classical way to regulate the exchanges of property over physical goods (when one gives, sells or lends a good, she doesn’t own it anymore). That is why rights management on digital contents requires to use special digital techniques called DRMs. One can deny the importance of this question, or consider that the remedies are worse than the problem to be solved, but one cannot deal with this problem without techniques that reintroduces the natural scarcity of the physical world. It is a mere fact.
DRMs allow to encode contracts or «licenses» on digital content and to reserve access to this content to their legitimate end-users, within the licenses’ conditions (sale, rental, loan, print rights…). This warrants that the remuneration provided to the right holders for the effective uses of the content is fair.
What could blockchain and smart contracts do for renewing this question, and how could they make DRMs more «user friendly»?
One may consider 3 fields of application, corresponding to 3 roles of DRMs:
- Blockchain could serve to identify digital contents and to record in a decentralized ledger the rights over these contents, and the associated possible licenses for using them. Smart contracts may be used to create various licensing models and to trigger the corresponding payment of right holders. This role can be described as a «decentralized recording of digital rights».
This may be particularly useful in the music industry, where the identification of songs is sometimes confusing, the rights holders (singers, composers, lyricists …) being often multiple and not easily traced and the licensing models on many streaming platforms complex to manage. This is why the SACEM in France is considering using IBM’s Hyperledger technology (https://www.challenges.fr/high-tech/pourquoi-l-industrie-musicale-a-besoin-de-la-blockchain_467071).
However, it does not seem to be a very useful function for the book industry as it operates today: there is no problem in identifying works and rights holders. Publishers exhaustively concentrate rights and they are trusted players for the remuneration of all right holders, even for eBooks. The rights may be coded correctly in ONIX (even if this can be improved) and the authorized salespoint are considered reliable by the publishers (one doesn’t speak here about illegal websites, which are out of the scope). Hence blockchain would solve here a problem that does not exist (except perhaps for self-publishing?) …and only add complexity to a well-functioning system.
- Reciprocally, blockchain could register the rights purchased by end-users over a digital content, in a sustainable, decentralized and interoperable way. This function can be described as a «universal digital library», a «digital locker» (https://en.wikipedia.org/wiki/Digital_locker), or a «personal cloud».
This is what the music industry envisioned, for example with the eVue project (https://www.ccn.com/drm-blockchains-interview-bryce-weiner/).
This indeed could be useful in order to allow each end-user to centralize her digital library, whatever the reseller where her bought their eBooks, the e-distributor who delivered them, or the reading application used, in a sustainable way (for instance this may help to solve the digital inheritance problem and the problem of perennity of resellers). In the physical world, one can buy books in different bookstores, then store them in our home library where they can easily be found without remembering the bookseller. It should ideally be the same with digital books.
Current DRMs and reading applications often limit this digital locker function by linking the synchronization of customer orders with one specific reseller account. This is typically what Amazon does in its proprietary ecosystem, or what reading applications using Adobe’s Vendor ID do. However, some newer DRMs technologies allows this interoperability feature, for example with a simple password technique for LCP or with a universal file extension for Sony URMS.
The main question in this case is not technical, one does indeed know how to create an interoperable digital library, with or without blockchain. It is a question of will of the industry players, which apparently tend lately to create more and more their own isolated ecosystems, even when they are small players. If they were a real accepted business interest for interoperability, this question could be open, and blockchain could indeed be one of the ways to be seriously considered. A contribution of members on this point would be very fruitful.
- But blockchain is’nt and cannot be a method for implementing Technical Protection Measures, i.e. for preventing by technical means the unwanted / illegal uses of digital content. It is a recording information technique, and not a file delivery or «access to content» technique, which could prevent any diffusion of content between unauthorized users, nor verify that an eBook has been opened on N machines or cannot be opened beyond its check-out period if has been lent. The blockchain can record transactions and execute contracts if it is asked to do so, but it certainly does not prevent the use of files outside these contracts: blockchain has no grip on the external world, nor upstream as the need for oracles shows, nor downstream.
The only way to make use of smart contracts secure from this point of view is to use TPM, for instance to encrypt the files in such a way that they may be read only with reading applications in which decryption of the content requires a specific user’s authentication protocol of the user, that means to reintroduce “traditional DRMs”.
As stated by Michael Schmidt: « If DRM is meant as «Digital Right Management» in an administrative way, using the blockchain as proof of ownership would be technically possible and not even a lot of work. If DRM is meant as the «traditional» enforcement of the licensed «Digital Rights», usage of the BlockChain doesn’t make any sense“ (https://www.quora.com/Could-Blockchain-be-used-as-a-robust-DRM-system-for-digital-content-including-movies-and-music).
In a nutshell:
- Blockchain is a revolutionary technique for creating decentralized transaction ledgers, which can be used for programing the execution of contracts. It will certainly be useful for music industry for simplifying the recording of rights and the remuneration of right holders in some contexts. It could also be a new promising method for offering to eBooks users a “universal library” function, to be compared to other techniques.
- Blockchain cannot be a technique for limiting unauthorized uses and illegal dissemination of any kind of digital content. One can deny the usefulness of those techniques or believe that they are necessarily devil. This a debate. But the fact is that the use of blockchain is not a miracle solution that would make DRMs more «user friendly», more modern or «cooler»: it simply has nothing to do with the heart of these technologies, i.e. the part which is dedicated to give reinsurance to rights-holders.
More over :
- The purpose of using blockchain is to dispense with trusted third parties to manage transactions – which is something that resellers and e-distributors need to think about.
- In any case, the actual use of blockchain for this type of application still faces many other problems:
- It may have a high cost, dependent of the kind of mining protocol.
- It has limited capacity in terms of volume and speed of validation process: It is possible for the moment only to perform 3 to 5 transactions per second worldwide.
- Any error in a smart contract stays there forever.