SONY  - using blockchain for next-gen DRM not the greatest of ideas


We at FINTERRA know that not everyone is a fan of Blockchain technology and, in saying that, Blockchain innovation, depending on the platform you choose to use can add unnecessary inefficiency and complexity, although from my experience it has a myriad of revolutionary and disruptive uses. Saying that, not all problem statements require blockchain to resolve them, some would be better using a database, for example, but that’s a discussion for another time.

So, whilst reading an article on Techdirt, I was surprised to find myself siding with the author on why using Blockchain tech for Digital Rights Management (DRM) would not necessarily be a good idea. As the article states, while blockchain does have efficiency and complexity weaknesses (platform dependent) compared to a database, it does have a couple of potential advantages — but only if those advantages are necessary to the service being built. The first advantage is that the blockchain can be truly distributed, rather than centralised. For years, we’ve discussed the problems of too many centralised systems, whether it’s the siloing of information, the weird incentives it creates for the central database controller, or simply the fact that a centralised system creates a single point of failure and/or point of attack for a would-be assailant. A blockchain can help limit (though not eliminate) some of those problems — and that can open up some incredible new services. The second big thing that a blockchain does better than a database is that it creates a more trustworthy way to prevent the “double spending” problem.

The issue there is that with anything digital, it can always be copied and/or manipulated in some way. If you are trying to construct something that requires scarcity — such as a digital currency or a specific ledger of asset ownership — then you want to be sure that the system really has a 100% accurate record, and won’t allow the same bit of digital currency to be held by multiple people (or allowing it to be spent multiple times by the same person) or, that the same asset is listed as being owned by different entities. One of the cool features of the Blockchain is that it is designed such that people can be cryptographically certain that we don’t have that sort of “double spending” problem. You do have to trust the math and the code, but the code is open and people are constantly checking it. Now, you can claim a centralised database can prevent these kinds of things too, but you have to totally trust whoever is in control over that centralised database. And you might. Most of the money you probably have is really in a centralised database at your bank. But there are some advantages to have that record be on a publicly distributed ledger a la the blockchain.

The issue, of course, is finding services and applications that can really take advantage of these benefits of the blockchain, and so far, they are few and far between, though there are plenty of future possibilities where they could be extremely useful.

For years now, we’ve heard some people arguing for a blockchain-based DRM. This idea is at least marginally better than simply replacing a database with an unnecessary blockchain because at the very least, it is an attempt (a weak one, but an attempt) to leverage one of the advantages I discuss above: the double-spending issue. Obviously, as lots of people will tell you, the legacy copyright industries have decried the fact that the internet makes content super easy to copy, making their legal monopoly over the distribution of that content less than monopolistic. Thus, the folks who wish to go back to a world in which content is locked up, hear about how blockchain “solves” the double-spending problem, and they get excited: why couldn’t we use that as DRM? After all, isn’t the point of that aspect of the blockchain that it stops copying of digital assets?

But, that’s about as far as the thought process goes. Because from there, it completely breaks down. There are few actual details about Sony’s blockchain-based DRM idea, but it’s not difficult to understand why it will fail. First, it’s important to understand something that copyright supporters frequently forget: the copyright on something is different from the content itself. Copyright system supporters like to “mix-up” the content itself and the “intellectual property”, but as this has been explained in the past, while a “copyright” may have property-like elements, the underlying content does not, ergo the problem.

The blockchain-based system for solving the double-spend problem is a useful solution when it’s the record or ledger entry that you don’t want copied. But that’s not what any DRM system would be. Because the “record” is the copyright information — not the music/movie/book/etc. And who cares whether you can copyright the copyright information or not? You’re solving the wrong problem? The content itself can still get copied. There’s no way to stop that because even if you were to somehow encode the actual content in the blockchain (a pointless idea), you’d still have the analog hole to deal with, as the content would inevitably escape the blockchain.

The other reason why a blockchain-based DRM solution is so dumb is because it actively goes against what the public wants. The reason a disruptive or transformational technology works is because it provides the public with something much better than they had before. A blockchain-based DRM solution provides a worse solution. There is no demand for such a thing. Sure, there may be “demand” on the label side, but that doesn’t translate to usage.

The final reason why a blockchain-based DRM solution is utterly stupid is conveyed quite nicely by Cory Doctorow in his BoingBoing post about this announcement, in which he notes that what Sony is proposing appears to be a privacy nightmare:

Sony also implies that every transaction in which someone buys a creative work will end up in the ledger. This has extremely grave privacy implications, but it also has nothing to do with preventing copyright infringement. People who lawfully acquire copyrighted works have the right to sell them, lend them, and give them away — and they are not liable if (for example) their data (including copyrighted works) is stolen and released online.

The fact that Sony publishes a list of the reading, viewing and listening habits of every one of its customers does not give it any basis for seeking damages from those customers if works they purchased show up in someone else’s hands.

The whole idea of a blockchain-based DRM is based on a faulty understanding of either the blockchain, copyright, or (most likely) both. It involves people who wish to return to a world of artificial scarcity around content not thinking past the fact that a blockchain lets you solve the double-spend problem, without understanding why that doesn’t make any sense at all in the world of copyright, where it’s the content that’s the issue, and not the copyright.

As I said, I find myself siding with the author in this case, as he rightly points out that Sony’s potential use for blockchain tech is not addressing the real issue but that does not mean that a solution cannot be found, maybe it is us and not blockchain that needs to evolve to achieve a solution.

Well, only time and Moore’s Law (am I showing me age hahahah) will tell.


FINTERRA is a start-up FinTech company, specialising in harnessing and building solutions aimed at Global use cases and problem statements, built on the GALLACTIC blockchain platform, positioning Finterra to be a global leader in next generation FinTech, providing “Social Solutions for Blockchain”.

FINTERRA has satellite offices and teams across Singapore, Kuala Lumpur, Hong Kong, Abu Dhabi and New York.