Why pub­lish­ers should care about blockchain now

The Insider - - TECHNOLOGY -

Few would ar­gue that 2017 was a wa­ter­shed year for bit­coin. When the nine-year-old cryp­tocur­rency caught the at­ten­tion of av­er­age con­sumers last year, it sky­rock­eted to over US$19,000/coin.

Most of the world was caught off guard by the fi­nan­cial frenzy around the al­ter­na­tive form of money be­cause most peo­ple had no idea what a bit­coin even was. Sud­denly there were hun­dreds of ar­ti­cles spout­ing terms like blockchain, ethereum, soft forks, hard forks, pri­vate keys, pub­lic keys, EOS, ICO…the list goes on.

While it’s all very con­fus­ing, one thing is clear. 2017 wasn’t just a wa­ter­shed year for bit­coin, it was a tip­ping point for the in­ter­net (or should I say trip­ping point). The un­der­ly­ing tech­nol­ogy upon which bit­coin was built, blockchain, is poised to turn the in­ter­net on its head — and dig­i­tal pub­lish­ing back on its feet.

Be­fore I get that, let’s start at the top.

What is blockchain?

Blockchain is a de­cen­tral­ized, repli­cated ledger (think spread­sheet) of trans­ac­tions in a net­work built us­ing open-source pro­to­cols. Ev­ery ver­i­fied trans­ac­tion (e.g. the trans­fer of an as­set from one user to an­other) is recorded in a block of data which is chained to­gether with other ver­i­fied blocks in the net­work (hence the name blockchain).

As­sets can be tan­gi­ble (e.g. money, deed to a house, ho­tel room, boat) or in­tan­gi­ble — non-phys­i­cal items of value cat­e­go­rized as:

• Fi­nan­cial (e.g. cryp­tocur­rency such as bit­coin)

• In­tel­lec­tual (e.g. trade­mark)

• Dig­i­tal (e.g. on­line con­tent)

What makes blockchain unique?

The in­ter­net we’ve come to know isn’t what it used to be. Yes, it still pro­vides a many-to-many com­mu­ni­ca­tions ca­pa­bil­ity never be­fore seen in our his­tory, but it’s also…

• Ba­si­cally con­trolled by oli­gop­ol­ies (e.g. Face­book, Google, Ama­zon, PayPal, eBay, etc.)

• Not se­cure — home of mul­ti­ple forms of cy­ber­crime

• Un­trust­wor­thy — ripe with ad­ver­tis­ing fraud and mis­in­for­ma­tion (#fak­e­news)

• Lack­ing the open pro­to­cols needed to pro­tect iden­tity and in­tel­lec­tual prop­erty

Blockchain is like the in­ter­net in some ways, but so much bet­ter in terms of its open­ness, se­cu­rity, trans­parency, trust­wor­thi­ness and safety.

1. With blockchain no cen­tral au­thor­ity has con­trol

Re­cently I read a long, but ex­cel­lent ar­ti­cle by author, Steven John­son, in The New York Times that dis­cussed blockchain ver­sus the in­ter­net in terms of au­thor­ity. Here’s a quick syn­op­sis.

40+ years ago when the in­ter­net, as an in­for­ma­tion ex­change net­work, was launched to a lim­ited group, it was founded on open soft­ware stan­dards (e.g. SMTP, IMAP, POP, HTTP, etc.). It was that open­ness that gave ev­ery­one free ac­cess to build and ac­cess web pages and use com­mu­ni­ca­tion ser­vices like email. By de­sign, there was no cen­tral au­thor­ity pro­vid­ing per­mis­sion to use the in­ter­net.

But when the web be­came the de facto stan­dard for ac­cess­ing in­for­ma­tion on the in­ter­net,

com­pa­nies started to build ap­pli­ca­tions on top, also us­ing open pro­to­cols (e.g. XML, WSDL). What hap­pened was that within those ap­pli­ca­tions were pri­vate data­bases that were con­trolled by the or­ga­ni­za­tions that de­vel­oped the sites. You could still visit the website of a busi­ness, but you couldn’t ac­cess its ser­vices or con­tent with­out per­mis­sion, and of­ten some form of pay­ment (e.g. money, per­sonal in­for­ma­tion).

The in­ter­net ended up becoming a closed, cen­tral­ized sys­tem where trust was given to the in­sti­tu­tions (e.g. banks, re­tail­ers, and so­cial net­works) — or­ga­ni­za­tions that con­tinue to be hacked on a reg­u­lar ba­sis, re­sult­ing in phish­ing, iden­tity theft, fraud, loss of as­sets and ru­ined credit rat­ings. Th­ese days, it’s not a mat­ter of if you’ll be com­pro­mised on the web, it’s a mat­ter of when.

In a pub­lic blockchain there is no cen­tral au­thor­ity to give or refuse users per­mis­sion to trans­act over the chain — no honey pot to hack.

Bit­coin is a good ex­am­ple. It was the first dig­i­tal cur­rency based on blockchain ar­chi­tec­ture that re­moved in­ter­me­di­aries (e.g. banks) from the fi­nan­cial trans­ac­tion process, cre­at­ing a true peer-to-peer net­work.

With bit­coin, peo­ple with al­most com­plete anonymity, have 100% con­trol over their money and it can­not be seized, frozen, cen­sored, or stolen. Their trans­ac­tions can’t be con­trolled, in­ter­cepted, stopped, or ma­nip­u­lated by oth­ers.

Ethereum is an­other good ex­am­ple. But in­stead of be­ing the in­ter­net of money, ethereum is the in­ter­net of smart con­tracts.

Smart con­tracts are ap­pli­ca­tions on the ethereum blockchain that ex­e­cute all the vo­tive as­pects of an agree­ment/prom­ise/com­mit­ment be­tween users. Smart con­tracts can be used to re­place in­surance poli­cies, wills, li­cense agree­ments, pur­chases of sale, joint ven­tures, etc. Just like cryp­tocur­rency to­kens can’t be changed or lost, nei­ther can smart con­tracts.

2. Se­cu­rity is en­sured through con­sen­sus pro­to­cols

Blockchain’s de­cen­tral­ized ar­chi­tec­ture pro­vides ro­bust se­cu­rity that gives users com­plete con­trol over their own trans­ac­tions, but no one else’s. Pri­vacy is en­sured through the use of 256 bit pri­vate keys — im­pos­si­ble-to-crack pass­words for a bit­coin or ethereum wal­let.

Anony­mous par­tic­i­pants on a blockchain, re­gard­less of where they are, run full copies of the blockchain/ledger (called nodes) on their com­put­ers. Th­ese par­tic­i­pants are all re­spon­si­ble for ver­i­fy­ing trans­ac­tions by us­ing their hard­ware and soft­ware re­sources to solve a cryp­to­graphic puz­zle. It is this con­sen­sus pro­to­col that en­sures a com­mon, de­fin­i­tive or­der­ing of trans­ac­tions and guar­an­tees the con­sis­tency and in­tegrity of the blockchain across ge­o­graph­i­cally-dis­persed nodes.

The first user to solve the puz­zle is re­warded, the trans­ac­tion is ex­e­cuted, and logged in the ledger by the win­ner. Re­wards were orig­i­nally paid in bit­coin, but they can be any tan­gi­ble or in­tan­gi­ble as­set.

Now, I ex­pect you’ve heard all the hype about how bit­coin was hacked, but that is fake news. The nine-year-old cryp­tocur­rency, whose mar­ket

cap as of Fe­bru­ary 7, 2018 was roughly US$138B, has never been hacked. What have been hacked are bit­coin ex­changes and some users’ wal­lets. The prob­lem isn’t bit­coin or blockchain; it’s the peo­ple and com­pa­nies that in­sanely store pri­vate keys where hack­ers can find them — on the in­ter­net.

Some­thing that should be noted as well is that blockchain does not rec­og­nize bor­ders or peo­ple per se. In a pub­lic blockchain like bit­coin or ethereum, as­sets can be owned by any en­tity on the net­work, in­clud­ing ma­chines. It’s why blockchain is be­ing con­sid­ered a po­ten­tial tech­nol­ogy for se­cur­ing the In­ter­net of Things (IoT).

3. Trans­parency breeds trust

When a trans­ac­tion is recorded on a blockchain it can be seen by ev­ery­one. And be­cause blockchain uses pub­lic key cryp­tog­ra­phy in the send­ing and re­ceiv­ing of mes­sages, that trans­ac­tion can never be deleted, forged, or mod­i­fied in any way. Where ev­ery record is es­sen­tially im­mutable and com­pletely trans­par­ent (as there is with bit­coin), a blockchain is a plat­form of trust.

Now there are crit­ics that would ar­gue that blockchain’s sup­port for user anonymity creates a breed­ing ground for crim­i­nal ac­tiv­ity. Cer­tainly there have been many re­ported cases of ne­far­i­ous be­hav­ior (e.g. ex­tor­tion, money laun­der­ing), but it’s noth­ing new.

The in­ter­net was ripe with crim­i­nal ac­tiv­ity in the be­gin­ning and still is to this day. On­line or off, there will al­ways be those who play by the rules and those who don’t. The key is for law en­force­ment to stay on top of blockchain tech­nol­ogy and lever­age it to serve and pro­tect its cit­i­zens.

So what’s in it for pub­lish­ing?

Cer­tainly all the blockchain ben­e­fits out­lined above are good for ev­ery­one, in­clud­ing me­dia, but the unique value for dig­i­tal pub­lish­ing comes with solv­ing the prob­lems that have been haunt­ing the in­dus­try since the dawn of the in­ter­net — pla­gia­rism, copy­right in­fringe­ment, ad­ver­tis­ing fraud, and fake news, to name a few.

From the mo­ment pub­lish­ers started post­ing ar­ti­cles on the web, they started to lose con­trol of own­er­ship. To­day it is vir­tu­ally im­pos­si­ble to ad­min­is­ter dig­i­tal rights on­line.

But with ethereum smart con­tracts, in­tel­lec­tual prop­erty rights for con­tent (e.g. text, video, im­ages, mu­sic, and ads) can be se­curely and trans­par­ently stored in the ledger, and tracked and en­forced as that con­tent is shared, copied, rented, do­nated, li­censed, ref­er­enced, or sold across the net­work. Repub­lish­ing of con­tent brings to cre­ators ad­di­tional rev­enue at ev­ery step!

There are al­ready com­pa­nies experimenting with so­lu­tions to en­sure fair mon­e­ti­za­tion of at­tri­bu­tion and pro­tec­tion of rights. Oth­ers are dab­bling in the ad­ver­tis­ing space to in­crease trans­parency and elim­i­nate ad fraud.

Some are look­ing to use blockchain tech­nol­ogy to com­pletely re­move ad­ver­tis­ers and in­ter­me­di­aries from the cre­ation-con­sump­tion equa­tion, con­nect­ing read­ers and writ­ers di­rectly to fund in­ves­tiga­tive jour­nal­ism in a de­cen­tral­ized mar­ket­place. It all sounds very utopian, but how will they solve the con­tent dis­cov­ery prob­lem with­out the help of in­ter­me­di­aries?

De­spite any short­com­ings in th­ese early ini­tia­tives, this ex­per­i­men­ta­tion is great be­cause it helps shake out the tech­nol­ogy and in­spire fur­ther in­no­va­tion.

A new in­ter­net is com­ing faster than you think

Now, you’ve prob­a­bly heard that bit­coin, ethereum and all of the other pub­lic blockchains built on the same recipe are ba­si­cally where the in­ter­net was in the early '90s. And that like the in­ter­net, it will be at

least a decade be­fore blockchain hits main­stream.

But I cau­tion you to not get too com­fort­able as­sum­ing that you have lots of time be­fore you have to think about blockchain. Re­mem­ber with com­put­ers dou­bling their ca­pa­bil­i­ties ev­ery 12-18 months, in only 10 years, tech­nol­ogy will be 1000 times more ad­vanced than it is to­day. The rate of growth of blockchain­based ap­pli­ca­tions and re­lated innovations is al­ready show­ing ex­po­nen­tial po­ten­tial.

Did you know that Google was one of most ac­tive cor­po­rate back­ers of blockchain star­tups in the past few years? Since 2012, Google and other large busi­nesses have in­vested over US$1.2B. The num­ber one backer was SBI Hold­ings in Ja­pan. Google was sec­ond, in­vest­ing in six com­pa­nies in­clud­ing: Veem (mer­chant ser­vices), LedgerX (pri­vate en­ter­prise ser­vices), and Storji (data stor­age).

Ama­zon, which bought ama­zon­bit­coin.com three years ago, just se­cured three other cryp­tocur­rency-re­lated do­main names (ama­zonethereum.com, ama­zon­cryp­tocur­rency.com, and ama­zon­cryp­tocur­ren­cies.com).

On Jan­uary 4, 2018, Mark Zucker­berg wrote that he would study how en­cryp­tion and cryp­tocur­rency (el­e­ments of blockchain tech­nol­ogy) could be used in Face­book. By month’s end, he had banned of all ads pro­mot­ing cryp­tocur­ren­cies on the plat­form. Cu­ri­ous tim­ing.

It will be in­ter­est­ing to see how blockchain, which is all about de­cen­tral­iza­tion, will be ex­ploited by three of the most cen­tral­ized plat­forms in the world. Cer­tainly they could all build pri­vate blockchains within their walled gar­dens and con­duct busi­ness as usual, but would con­sumers want to join them given their his­tory if de­cen­tral­ized so­lu­tions are avail­able to them?

Watch, lis­ten, learn, and plan

I’m not sug­gest­ing that you jump on the blockchain band­wagon now and throw a lot of money at it. But it’s im­per­a­tive that pub­lish­ers ed­u­cate them­selves on this tech­nol­ogy, keep up to date on its evo­lu­tion, take note of what’s hap­pen­ing in other in­dus­tries, and start plan­ning for a new, open, de­cen­tral­ized in­ter­net.

But, please don’t do what most did in the 90s when they tried to fit the in­ter­net into ex­ist­ing busi­ness mod­els and au­dit struc­tures. A re­peat of that skeuo­mor­phic mind­set will only get you into deeper trou­ble.

To­day’s closed and cen­tral­ized au­thor­ity par­a­digms will not sur­vive this rev­o­lu­tion, and that’s what blockchain is. So get ready for it now and start to build and nur­ture a cul­ture of in­no­va­tion within your or­ga­ni­za­tion and your in­dus­try.

Plan with blockchain and all its pos­si­bil­i­ties in mind. Be open to new op­por­tu­ni­ties and rec­og­nize that al­though many at­tempts at com­mer­cial­iz­ing the tech­nol­ogy will fail, some will trans­form the in­dus­try in ways many of us never imag­ined.

Blockchain is a topic that needs to be dis­cussed on a reg­u­lar ba­sis within our in­dus­try in an open, trans­par­ent, and col­lab­o­ra­tive way. Only to­gether will we be able to cap­i­tal­ize on all it has to of­fer.

And don’t for­get, IoT, ar­ti­fi­cial in­tel­li­gence, ar­ti­fi­cial re­al­ity, and vir­tual re­al­ity are evolv­ing quickly and will some­day in­te­grate with blockchain. The po­ten­tial is huge, but the risks are real. And un­less you con­vert your me­dia busi­ness into a tech­nol­ogy com­pany like Be­zos did with The Washington Post, you can’t pos­si­ble ride this wave of in­no­va­tion alone.

It’s time to put aside self-in­ter­ests and col­lab­o­rate with other me­dia com­pa­nies and trusted tech­nol­ogy part­ners to help bring to fruition what com­put­ing pi­o­neer, Alan Kay, said in 1971, "The best way to pre­dict the fu­ture is to in­vent it."

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