What is blockchain and how can publishers benefit from it?
The blockchain is often associated with the mysterious and sometimes shady world of cryptocurrency but this ingenious technology is, in its simplest form, a decentralised, distributed and publicly available ledger of financial transactions. The first blockchain database was the invention of a person or group of people known pseudonymously as Satoshi Nakamoto in 2008.
The success of the blockchain technology rests on three principles:
– Decentralised authority: each transaction that joins the chain (i.e. becomes a block) is verified and given
a value by the consensus of other users in that chain.
– Transparent: anyone can view the contents of a blockchain and users are publicly identifiable.
– Immutable: records in the blockchain cannot be altered retroactively without the alteration of all
Much of the potential impact of blockchain for example on financial markets and industries from insurance to healthcare is obviously beyond the scope of this article. But aside from wanting to create their own cryptocurrency, why should publishers care about blockchain?
Smart contracts are contracts written into computer code that reference a particular blockchain database and execute the terms of the contract without intervention from a third party. The endless chasing up of suppliers for payment or searching for invoice numbers would no longer be necessary as payments would be released automatically as long as terms are met. Because blocks are immutable no part of the contract can be altered without the knowledge or all the parties involved. Using smart contracts can save publishers money on administering contracts and on fees for lawyers and notaries.
The sharing economy
Like previous disrupters Uber and Air B&B, blockchain could remove industry gatekeepers and put creatives in touch with one another directly. Freelancers in publishing could use it to sell their skills and collaborative publishing networks could grow up around it. Publishers could gain access to a talent pool more cheaply and quickly. Smart contracts could make late payments a thing of the past (or at least reduce the excuses for them).
Peer to peer distribution of digital content
The release of Imogen Heap’s Tiny Human on the blockchain network Ethereum in 2015 showed that blockchain can be used for secure distribution of digital content. It could provide more ways for authors to get paid; give more flexibility to publishers wanting license their content in different ways and potentially remove the need for DRM on eBooks. Publishers could gather consumer insight from this closer relationship to their customers.
Crowdfunding business models in publishing have been with us for a while with a notable example being the success of Unbounders. Blockchain technology takes this a step further by giving start-ups or individual publishing projects a platform to raise capital without financial intermediaries. The
transparency of blockchain manages exposure to financial risk and may help to reduce disputes (although this is untested).
Corporate responsibility and governance
Consumers are increasingly valuing corporate social responsibility and big brands are responding to this trend. Larger publishers could use public blockchain ledgers to demonstrate their commitment to ethical business practices whether in their investments or their supply chains. Blockchain can also make communicating with shareholders and other stakeholders in the company more transparent and efficient.
How can I play with it?
If you would like to have a go at creating your own blockchain the links below will be useful:
The blockchain api is available at blockchain.info and these tutorials can be useful for getting started https://blog.blockchain.com/tag/tutorials-and-guides/
There are a few popular open source platforms for developing blockchain applications:
Ethereum – https://www.ethereum.org/ the most high profile blockchain app platform
Mycelium Wallet – https://wallet.mycelium.com/ is a useful software and app for taking payments in Bitcoin
IBM Blockchain Platform – https://www.ibm.com/blockchain/platform IBM have a popular blockchain platform (including Hyperledger specifically designed for enterprise) and their developer resources are extremely in-depth
AWS Blockchain Templates – https://docs.aws.amazon.com/blockchain-templates/latest/developerguide/blockchain-template-features.html Amazon Web Services have their own templates to create blockchain networks