The promise and the pitfalls of photography on the Blockchain

Talk to the people of the blockchain and sooner or later you will hear this refrain: "a solution in search of a problem".

Those who see the potential in blockchain fervently generate useful and potentially new business applications for technology, such as simplifying image licensing, opening up new markets for fine arts sales and combating false news dissemination . The skeptics, meanwhile, reject the blockchain as a technological cul-de-sac.

Regardless of where you are in the skeptical-true-believer continuum, developments around the blockchain will move swiftly in 2019, particularly in creative sectors such as music, journalism and photography, says industry consultant Maria Kessler. "There is no doubt that there are a lot of bright individuals who pay attention to his promise," he says. In 2019, some blockchain-based photo services are ready to be published online (KodakOne, Wemark, etc.). While existing services that use technology are hoping to achieve greater traction.

To understand both the fascination and the responsibility of the blockchain, we need to know how, in very broad terms, it functions. Blockchain is essentially a digital ledger that is saved through a huge computer network. This distributed and decentralized storage allows you to create and share digital resources (usually, but not exclusively, a cybernetic currency like Bitcoin) ensuring that these assets are not copies or fakes. The blockchain saves immutable records of any transaction involving such activities.

A related but equally important blockchain technology is the smart contract. Smart contracts are essentially self-executable instructions that can accompany a blockchain record. Like the popular If This, Then That app, smart contracts run automatically when certain conditions are met.

Do not miss: what photographers should know about Blockchain

The most mature use case for blockchain in the photographic industry is also one of the most misinterpreted.

Blockchain has initially entered the photographic industry consciousness through the efforts of services such as Binded, which uses blockchain as a method to authenticate images by registering authorship and the date of their creation in the blockchain. This inscription was originally presented as a sort of low-cost technology at the level of registration of author's rights. But it is not.

As pointed out by Image Nights CEO Joe Naylor, subscribing photographic information in a blockchain is not the legal equivalent of copyright registration. The copyright registration with the U.S. Copyright Office, not the blockchain inscription, is your fundamental legal protection. "We are not stating that blockchain is going to court right now" as a substitute for copyright, says Naylor.

Kain Jones, CEO of Pixsy, is an agreement. "At the moment, it's new and untested," he says. Mixing blockchain, which can be confusing, with copyright, which is also confusing, would not serve the customers of the company, he adds. That's why Pixsy examined, but eventually integrated the technology into its service offering.

With that said, ImageRights uses blockchain to help photographers' clients solve violation claims. The company uses the blockchain to record all information relating to the property, including registration information of the United States Copyright Office and a preview image, so it may present them to the perpetrators of violations in an attempt to convince them to settle down. . In this scenario, while the blockchain currently has no legal weight, he persuaded the transgressors to settle down, notes Naylor.

Digital evidence of Blockchain ownership could become more valuable if it were approached or occurred simultaneously at the time of creating an image, says Naylor. If cameras and smartphones insert images into the blockchain as they are created, these digital birth certificates could provide useful information for the media and social networks on who took the picture and what they did. First, all camera metadata may be recorded in the image blockchain record at the time of capture. When the image is edited and the RAW files are converted to JPEG files, these changes can be captured and added, together with the processed JPEG, to the blockchain.

For media organizations, blockchain records of an image could become a powerful tool to demonstrate that images were (or otherwise) unethical changed. For social networks, it would provide a means of authenticating the provenance and history of an image – the best way to combat the proliferation of false news. Naylor says we'll soon be able to see a blockchain-enabled camera or camera app.

Blockchain becomes a "very interesting" proposal for photographers if it could be implemented in an "end-to-end ecosystem," says Jones. "It becomes powerful for the rights holder to have a definitive and thorough recording of the life of a photo," he adds.

Do not miss: a case of copyright lawyer against blockchain

The most ambitious and complex use of blockchain in photography is the combination of a digital ledger with an intelligent contract to create a photographic licensing agency without, well, agents, at least in the traditional sense.

Companies like Wemark and KodakOne are preparing to launch photo markets in 2019, where licenses and image payments are automated and brokered by smart contracts executed on a blockchain. Marketplaces work more or less like this: photographers upload images and verify that they are rights holders. Photographers register their license terms on smart contracts. When a licensee accepts these terms, the contract is executed and payments are made by the licensor to the licensee.

Having licenses for images included in a smart contract means that the agency does not have to chase customers for payments, as they are done automatically. "I've been involved in Stock Artist Alliance and there's no end to stories where a photographer knew that a license was created for an image and he never saw the payment," says David Riecks, a asset management and self-denominated skeptical blockchain. "Being more transparent can be useful for creators".

Since most of the licensing and payment processing has been automated, new brokers, blockchain-based agencies, claim to be able to reduce the revenue of a traditional agency. In particular, in the case of Wemark, they allow photographers to set their own fee structure and licensing conditions and do not even acquire image rights – so that photographers can prosecute offenders and recover damages directly instead of surrendering those rights (and potential damage) to a third party.

But there are some important issues with the vision of a blockchain-mediated photo market, says Riecks. One challenge is that these self-managed smart contracts pay photographers in a digital currency, or token, whose value relative to the US dollar may vary. While these blockchain-based image markets will allow users to trade their unique tokens for US dollars, they still need to create a mechanism that stabilizes the exchange rate, opening the door to potentially volatile swings in which image licenses are really worth when they eventually denominated in US dollars.

Kessler also considers it a significant responsibility. "Ultimately, does anyone want a KodakCoin? People want something they can buy food in. They want US dollars."

To obviate this objection, services like KodakOne and Wemark will not only allow users to exchange their tokens with dollars, but use tokens to buy real assets.

According to Kerens Sachs, a former consultant at Shutterstock and now a consultant with Wemark, the use of token cryptocurrencies "helps photographers to align their interests, become interested parties in the ecosystem and benefit from it when they grow older", he tells us in a statement. "Imagine that photographers use their tokens to buy equipment, pay for professional services, take positions and much more – all this will come with minimal costs to send payments and zero bank charges."

Users should expect fluctuations in the value of tokens and assume some risk in treating them as they would any cybernetic currency, says Wemark co-founder, Tai Kaish. "However, unlike traditional currencies, the supply and demand for Wemark tokens will depend on the success of the market," he tells us. The Wemark token is what is known as a "utility token," says Kaish, and as such, its value corresponds to its use. The more people use it, the more it becomes precious. "At that point, the creators who were part of efforts to help market growth also share success," says Kaish.

Another challenge is interoperability, says Riecks. It is one thing to operate within the limits of a single market, but for images that travel between markets and, by extension, through blockchain. "The way in which registers are shared between systems is completely unknown," says Riecks.

Another emerging use of blockchain is "tokenize" a piece of physical art, says Daniel Doubrovkine, Artsy's Chief Technology Officer. It works like this: an artist creates and / or an institution buys an art work (photo, sculpture, painting, etc.) and offers work sharing through the blockchain. The "shares" of the owners of the works of art are digital tokens that can be exchanged on the stock exchange, with the blockchain ledger that constantly updates and transparently who owns how much of the physical object. If the item is sold, the shareholders profit or suffer a loss, depending on the selling price of the physical object. (For the record, Doubrovkine says that, blockchain or not, "art is a notoriously bad investment.")

The dotted photographic art has already collected some amazing prizes. In February 2018, Kevin Abosch's "Forever Rose" photograph was sold to a group of ten investors for the equivalent of $ 1,000,000. Each investor has received a token equal to 1/10 of the value of the image. Token owners may therefore hold, sell, exchange or give away.

As in the case of image markets, capture with tokenization is that transactions require the use of a crypto-currency (in the case of Abosch it was Etherium) whose value relative to the dollar fluctuates. In the equity market, the value of proprietary shares fluctuates according to the company's market trend and its future growth prospects (in theory, at least). But for tokenised art, variables are not just the amount of demand that exists for art, but the exchange rate of the cybernetic currency in which the proprietary tokens are denominated.

Blockchain opens the door to a truly new concept for artists: creating limited edition digital files, says Doubrovkine. In this case of use, only files related to blockchain records (which are impossible to forge) are authentic, which allows artists to limit the number of such files in circulation. This model of "digital scarcity" has been shown by-what else-a cat (this is the Internet, remember). In particular, a "CryptoKitty", a limited edition virtual collection in which every authentic kitten was engraved in the blockchain. Users could (and incredibly, they did) buy, trade or practically horde their CryptoKitties.

It remains to be seen how significant the blockchain is in the photographic industry. For his part, Doubrovkine sees that he suffers from a classic chicken and egg enigma: "Nobody uses [blockchain] as long as it is not useful, but to be useful, someone has to sow adoption. "Kessler says that the most promising uses will grow from existing companies with established customer bases: Closed markets, like KodakOne, will face a more difficult road. , provides.

Beyond the trade and exchange challenges of blockchain-based photo business models, there is a broader question of how sustainable blockchain really is, says Riecks. The most popular and largest blockchains are supported by the distributed number of thousands of computers. Those agitated CPUs are eating up energy. An estimate of the analyst Alex de Vries suggests that the maintenance of the only Bitcoin blockchain in 2018 would have consumed the full power of the Irish country over the same period of time. It could turn out to be a high price, regardless of how many CryptoKitties purchases.

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