DJ EQS-News: How Will Blockchain Disrupt the Cultural Industry?
EQS-News / 14/10/2020 / 10:47 UTC+8
How Will Blockchain Disrupt the Cultural Industry?
The widespread use of Internet has thrust us into the age of information
civilization, which is very different from the agricultural civilization and
the industrial civilization. In the information age, new technologies
represented by cloud computing, big data, blockchain, and AI are re-making
the traditional cultural industry and pushing its digitization and
transformation. Among these new technologies, blockchain, as an underlying
technology, is having the widest and deepest impact. The disruptiveness of
blockchain is very significant for the future development of the information
age, and is expected to push humanity from the era of information internet
into that of value internet.
As a brand new and decentralized infrastructure and distributed computing
paradigm, blockchain's application value is not just limited to finance.
Instead, it is a foundational technology for the Internet. Blockchain is
highly compatible with the open, situational and connective nature of the
cultural industry, and in the new economy, the strategic choice will be to
closely follow the evolution and progress of blockchain technology and
achieve synergetic innovations with the cultural industry.
What is blockchain in the cultural industry?
In 2008, in an article named Bitcoin: Point to Point Electronic Cash System,
a Japanese-American named Satosh Nakamoto came up with the blockchain
technical framework for Bitcoin. The idea was considered like a tale out of
the Arabian Nights back then. However, in over ten years, blockchain has not
only triggered a revolution in the banking and financial industries, it has
also become one of the most advanced technologies in data computing and
storage.
According to its international definition, blockchain is a shared and
decentralized ledger that organizes data blocks in the form of chains into
specific data structures according to time order, and that is ensured
through cryptography to be immutable and unforgeable. Blockchain can
securely store simple, chronologically ordered data that can be verified in
the system.
In essence, blockchain is a ledger that enables people who do not trust one
another to conduct information and value exchanges with trust and
confidence, and without the involvement of authority in the middle.
Blockchain is the innovative application of computer technologies such as
distributed data storage, point-to-point transmission, consensus mechanism
and encrypted algorithm.
The reason that blockchain, as an underlying technology, will have a
profound impact on the digitalization of industries lies in the technology's
6 major features, i.e., its being decentralized, open, autonomous,
anonymous, programmable and traceable. These 6 features give blocktrain its
nature as a revolutionary and disruptive technology.
De-centralized: the use of distributed accounting and storage technology
means that there is no central hardware or management authority. Any one
node has equal rights and obligations as the other nodes. Nodes with
maintenance function jointly maintain the data blocks in the system. If any
one node stops working, it won't affect the system's overall operation.
Open: the system is open. Other than the private information of the parties
in a transaction, which is encrypted, blockchain data are open to everyone.
Anybody can query blockchain data and develop related applications through
its open interface.
Autonomous: Blockchain adopts standards and protocols based on negotiated
consensus, so that all nodes in the entire system can go to a trusted
environment to exchange data freely and securely. This changes trust of
"people" to trust of machines and technologies.
Anonymous: Because the exchanges among nodes follow fixed algorithms, their
data exchanges do not need to be backed by trust. As a result, the parties
in a transaction do not have to reveal their identities.
Programmable: the digital nature of the distributed ledger means that
blockchain transactions can be linked with computing logics, and are by
nature programmable. As a result, users may set algorithms and rules to
automatically trigger node-to-node transactions.
Traceable: through the block data structure, blockchain stores all
historical data that come after the genesis block, and any pieces of data on
a blockchain can be traced to its origin through the chain structure.
Information, once goes through consensus and added to the blockchain, is
jointly recorded by all nodes and guaranteed to be chronologically connected
through cryptography, which makes it extremely costly to alter. In fact,
blockchain may look like a force of production, but as a decentralized self
organization, it has more features of a new relationship of production. The
evolution of blockchain technology is bringing changes in system and program
design ideas, pushing the restructuring of the distribution relationship and
trust relationship among consumers, businesses and capital, and disrupting
the current modes of business organization through community autonomy as the
core organizational relationship.
On the one hand, the application of blockchain in the area of digital
cultural copyrights has been exploding like wild fire. People may utilize
blockchain's trustworthy and traceable features to perform the storage and
tracing of multiple types of transaction information, such as digital
cultural copyright registration, change, and licensing as well as
derivativeworks; on the other hand, blockchain technology can be used to
authenticate digital cultural businesses' contracts or properties such as
equities and intangible assets, to transfer them and to achieve intelligent
contract management, therefore increase the efficacy in consensus formation
and value transmission.
In addition, blockchain will also have important application value in
cultural related financial products as well as in digital cultural trades,
and is expected to play a role in point-to-point transaction of digital
cultural products and services, such as cross border payment, trade
settlements and the purchase and sale of contracts of derivative works. In
other words, the external pull of blockchain technology, together with the
internal development need of the digital cultural industry, are
synergistically pushing blockchain to shine in this very industry.
Cultural and creative industry full life cycle management
The 6 major features of blockchain technology also mean that when blockchain
gets into the digital cultural industry, it will simultaneously endow the
later with the decentralized, open, autonomous, anonymous, programmable and
traceable characters. These characters will be throughout the entire
industry chain, and provide new opportunities and platforms for the creative
development of the entire industry.
Specifically, the application of blockchain in the cultural and creative
industry will move from upstream to downstream, and will primarily be
centered around 3 areas: blockchain + content production, blockchain +
content circulation, and blockchain + content rights protection.
From the perspective of blockchain + content production, blockchain can
build a brand new digital culture value sharing platform. Blockchain
technology places the creators and producers of digital culture at the
center of the industry chain, and provides a platform for the source
producer to share copyright value fairly. It forms a development model with
digital culture content at its core.
On the one hand, with blockchain technology, direct linkage between source
content producers and users can be achieved, therefore eliminating the need
to cover the operation costs of agents and platforms and to separate
accounts, reducing the costs of copyright registration and protection as
well as royalty management, and ensuring the value maximization of the
original creators of digital culture: a content creator's work has encrypted
digital signature so its value is stored, the creator may track and decide,
at any time, what to do with the copyright (sell or license it) as well as
its price, and obtain income due to him/her when the content is flowing and
transmitting on the blockchain platform.
On the other hand, the open and transparent transaction program enabled by
blockchain is very difficult to alter, therefore increasing openness and
transparency; while the automated authentication of intelligent contracts
and the quick revision of parameters can greatly reduce the complexity of
traditional contracts, simplify the process and increase efficiency. All
these are conducive to protecting the interests of the creators in the mid-
and tail sections of the digital culture industry chain, therefore forming a
brand new digital culture production ecosystem that is centered around
content creation at the source of industry chain, and based on rule
consensus and value sharing.
From the perspective of blockchain + content circulation, blockchain will
change digital culture's operation and transaction system, including
re-building the cultural circulation segment in the age of Internet. The
characters of blockchain and the virtual market's protocols enable consumers
to participate in the entire process of content creation, production,
transmission, cloud sourcing and consumption, and push the direct
interactions between the producers and consumers of digital culture content
to the core. There is no longer the need to rely on the credibility of a
third party platform.
The new circulation platform built by blockchain technology re-structures
the trust mechanism by shifting trust from individuals to data, therefore
increasing transaction efficiency in the digital culture market. The
distributed market with multiple transaction parties and the decentralized
cooperation order ensure to a greater extent the maximization of the
interests of the producers and the consumer on the two sides of the
platform.
As an illustration, the blockchain based music sharing platform Audius is
dedicated to eliminating operational links in the middle. Through blockchain
enabled intelligent contract system, it allows music producers to obtain
fair and transparent income in a global market. Users pay to listen to music
on the platform through purchasing Audius tokens or earning tokens by
watching commercials. 85% of the platform's income is paid, through
encrypted currency, to the musicians, while 15% is distributed between the
party song providers and software developers.
In addition, based on blockchain's value transmission feature, content
industry can issue and trade digital assets (similar to tokens) on the
copyright and game prop transaction platforms. Because blockchain is
immutable and distributed, copyright and game prop transactions built upon
blockchain technology can not only promote their security and transparency,
blur the boundary between the real and the virtual, they can also bring
disruptive impact on the game and copyright markets.
From the perspective of blockchain + content rights protection, putting
transaction data on blockchain through signature consensus by using
distributed data storage and encrypted algorithms allows not only general
file storage, but also the forming of evidence chain through real time and
secure data and intelligent contracts, therefore meeting the requirements
that evidences are true, legal and connected and promoting the
standardization of evidence and trials.
In fact, the cultural and creative industry is presented with new
development opportunities in the 5G age. However, it is also due to the
network effect, fast transmission rate and low costs of the Internet, all
sorts of pirating technologies have kept popping up and causing the industry
to suffer huge economic loss from rampant piracy.
First, online piracy causes direct negative impacts such as job loss,
copyright value shrinkage, and the loss of many great works; secondly, the
shoddy quality of online pirated content, combined with fake ads and Trojan
horses, have left users with very bad experiences, which consequently affect
users' feelings towards and experience of the real works, and resulting in
the vicious cycle in the copyright market.
With the rise of the knowledge economy, intellectual properties should have
become the key competitiveness factor in the cultural and creative industry.
However, intellectual property infringement is still a very serious issue in
the current Internet industry ecosphere, with frequent copyright disputes.
Rampant pirating of original works, difficulty in presenting evidence and
high cost in right protection have become the sharp pain points of the
cultural and creative industry.
Regulation and technology are the two paths to solving legal problems, and
when ex post regulation is costly, blockchain technology provides a cheaper
and more efficient way in. Block chain technology, through timestamps and
Hash Algorithm, can authenticate a work's right and prove the existence,
authenticity and uniqueness of a paragraph of text, a piece of video or
audio. Once its right is authenticated on blockchain, a work's subsequent
transactions will be recorded in real time, and the full life cycle of the
cultural and creative industry can be traced and tracked. This provides a
powerful technological safeguard and highly credible evidences for discovery
and proof of intellectual property rights.
Lastly, the borderless transmission of digital culture has led to a network
resonance system that is globally connected, open and dynamic, and given
digital culture its global character since its birth. Although the rapid
development of the Internet has increased the speed and efficiency of global
communication, it has been difficult to make value transfer a reality.
Blockchain can help lower the threshold and costs, induce the birth of new
industries and new organizational forms, and achieve value transfer in
global digital culture communication channels.
In the age of intelligence, using blockchain technology to accelerate
Chinese digital culture's outward journey will not only help defend against
the negative impact of foreign digital cultures and achieve more effective
growth, it will also promote the structural transformation and upgrading of
the digital culture industry, and increase our national culture's influence
and competitiveness.
In the age of intelligence, blockchain, as an underlying technology, can
help achieve full life cycle management of the cultural and creative
industry, and effectively shorten the cycle of value creation. Its
groundbreaking character will undoubtedly bring great disruptions to the
industry. At the same time, however, the public may not necessarily accept
the changes block chain technology is bringing.
For example, although blockchain can solve digital copyright issues, it also
will bring to an end some free-of-charge business models, which might be
difficult for some audience to accept. This shows that even though
blockchain does indeed have the potential to change the cultural industry,
the changes must be built upon the proper understanding, channeling and
regulation of the technology itself.
For the above reasons, it is essential to accelerate industry and public
understanding of blockchain technology, to push the establishment of
appropriate security safeguard system, and to actively guide and regulate
blockchain developers and platform operators. Moreover, it should be noticed
that blockchain technology still has the issue of usability and maturity,
its application in the cultural industry is still at an early, exploratory
stage, and there is still the need to further explore the appropriate paths
and scenarios for its use and to expand the space in which the technology is
practiced.
About the Author
CHEN, Gen, renowned FinTech scholar, popular technology author and
successful financier in China and Hong Kong SAR.
Chen is an invited professor of Beijing University, postgraduate student
advisor of Beijing Forestry University, Visiting Professor of Nanjing
University of Aeronautics and Astronautics. He is a media commentator of
China Daily,
China First Financial Magazine.
Chen has undertaken a number of projects entrusted by China's National
Ministries and Commissions, involving financial technology, financial
services, real estate and other fields. He was commissioned to conduct
research and lectures by General Electric of U.S., the United States Wall
Street Stock Exchange, NASIDAQ, Samsung, Hyundai, LG, Volvo, Siemens,
Mercedes-Benz, China Securities Regulatory Commission, Hong Kong Stock
Exchange, Hong Kong Securities Regulatory Commission, Apple, Google, IBM,
Agricultural Bank of China, China Life Insurance, Bank of Communications,
Citibank, Xinhua News and CCTV.
File: How Will Blockchain Disrupt the Cultural Industry? [1]
14/10/2020 Dissemination of a Marketing Press Release, transmitted by EQS
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(END) Dow Jones Newswires
October 13, 2020 22:48 ET (02:48 GMT)
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