Can We Reexamine the Role of Blockchain in Copyright Now?

Back in January, the crypto group Spice DAO (decentralized autonomous organization) made headlines for spending approximately $3 million to acquire a physical copy of the book Jodorowsky’s Dune, a bible for a planned Dune move that would have been made in the 1970s. 

The payment beyond excessive. Though the book is rare and valuable, with approximately 10 copies made, previous ones sold for approximately $28,000, making Spice DAO’s purchase more than 100 times the going rate. 

After winning the book, the group announced their plans. There were three steps:

https://twitter.com/the_spice_club/status/1482404318347153413

However, those familiar with copyright law, immediately began to point out flaws in the plan. The biggest was owning a physical copy of the book did not give them the necessary rights to do what they wanted. They acquired a physical book, not the rights to make a series based on it or to even distribute it publicly.

Now, seven months later, those plans have officially fallen apart. Spice DAO has announced that it is implementing a three-stage “redemption phase” that will see it attempt to pay back its members as much as possible and, likely, attempt to sell the book in the fourth quarter of 2023. The goal there is to attempt to capitalize on the release of Dune: Part 2

All of this will likely come at a significant loss to Spice DAO’s members. The organization’s treasury is estimated to have just $1 million, and there’s little chance the book will sell for anything near the original $3 million purchase price.

For investors, it is a near-complete failure. However, for artists, rightsholders and those familiar with copyright, it was completely predictable. Even without the recent cryptocurrency crash, it is unlikely that these plans would ever have succeeded. 

But maybe this failure can be the beginning of something. A rethinking of blockchain and crypto’s role in copyright, and an examination of both if and how it might actually help.

Multiple Failures

To be clear, this isn’t the first time blockchain and crypto promised that they would make artists’ lives easier or open up new opportunities, only to fail completely.

NFTs (Non-Fungible Tokens), for example, were originally billed as a way for digital artists to create scarcity and enable them to charge more for “unique” works. Though some artists did manage to capitalize, NFTs quickly became a haven for selling pirated and infringing works.

The issue got so bad that Cent, one of the largest marketplaces for NFTs, shut down nearly all NFT sales over “rampant” issues with copyright infringement and plagiarism. The mainstream reputation of NFTs was hopelessly trashed and, as the regular crypto market began to falter, the NFT market was especially hard hit

Now, Yuga Labs, the creator of Bored Ape Yacht Club, is facing a possible class action lawsuit over allegations it did not properly disclose the speculation-driven nature of NFTs. 

For almost as long as the blockchain has existed, supporters and advocates of it have claimed it would revolutionize the way we consume art, handle copyright disputes and earn revenue from artistic works.

To put it mildly, those promises have not come to fruition.

Blockchain, when it comes to copyright, has been a solution looking for a problem. Unfortunately, we’ve seen time and again that those offering the solution don’t understand the problems that they are trying to solve. As such, their efforts often make things much worse for creators, as with NFTs.

Couple that with the fact that blockchain, in general, does little that a database with a trusted provider can already do, and it’s difficult to see what role the tech would have in copyright. For example, blockchain copyright registrations in the United States would be of almost no use, as such registrations already need to be recorded with the U.S. Copyright Office

But this isn’t to say that it can’t be useful. It just requires a complete rethinking of the technology and its application.

Finding a Use

Back in November 2021, copyright non-repudiation service Safe Creative announced a new system that would affix copyright information to NFTs. The idea fairly simple, since an NFT is basically a contract signed in the blockchain, combine that with Safe Creative’s own database of works to enable the NFTs to convey copyright information including ownership and licensing.

It’s a simple idea, but one that hasn’t taken off yet. Most involved in NFTs were more interested in minting and selling them, rather than making them useful.

This, in turn, is why pirate NFTs became such big business. When you see NFTs as little more than a way to make money, they really can’t serve a useful function. NFTs as a profit center makes it so that the motivation is to churn out and sell as many as you can, in many cases, the law be dammed. 

The technology behind blockchain can be useful, but that use will likely be niche and for it to actually fill those purposes it will have to give up on being a risky investment or a panacea of technological change. It will have to find ways to be more environmentally friendly and find the niches where it can actually help.

One potential use is Safe Creative’s. In countries where there is no government recordation of copyright, blockchain offers a decentralized and transparent process to record copyright ownership, transfers and licenses. 

For example, blockchain could be used to record that someone obtained a license to use a song in a video. Then, YouTube could check for that license and know not to take that video down or otherwise claim it. While this could be achieved with a simple database, that creates concerns over what happens if the company managing the database goes out of business or has severe technical issues.

However, these types of use cases aren’t going to create billionaires. Simply put, copyright’s biggest problems that tech can address aren’t very lucrative to solve. That’s one of the key reasons why they haven’t been solved. They are difficult problems with little reward for addressing them.

That said, blockchain technology has already been created and may address some of these cases. With the leg work done, maybe we can finally divorce blockchain from its get-rich-quick image and find ways that the technology actually could be useful.

Bottom Line

Crypto enthusiasts have long wanted to find practical and legitimate uses for the technology. If nothing else, it justifies their investment and the wealth they gained from the technology. However, to date, it has failed to solve any significant problems. It has even failed to serve as a practical currency, proving unstable and impractical for exchanging goods and services.

However, that doesn’t mean that the technology isn’t interesting and has zero usefulness. It just means that as long as the technology is primarily an investment, with any practical uses being secondary, it’s going to be ill-equipped to address outside issues.

Simply put, every time that blockchain advocates have tried to use the technology to help creators, it’s backfired. While they understand the technology and see its potential, a lack of understanding about the problems they’re attempting to address has more or less guaranteed that their efforts to bring meaningful change will blow up in their faces.

As interesting as blockchain technology is, the problems it may be best able to address are not sexy problems that make people rich, they’re mundane, niche and pedestrian. 

If blockchain is going to be useful, it needs to step away from the “get-rich-quick” and “big swing” mentality and start focusing on small problems that it can address. Once it does that, we may start to see some practical benefits of the tech. 

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