This is the transcript of a talk I gave at the 2018 Colloquium on Responsibility in Arts, Heritage, Non-profit and Social Marketing at the University of Birmingham Business School  on 17th September 2018.

Good morning everyone. My name is Peter Cripps and I work as a Software Architect for IBM in its Blockchain Division.

As a Software Architect my role is to help IBM’s clients understand blockchain and to architect systems built on this exciting new technology.

My normal world is that of finance, commerce and government computer systems that we all interact with on a day to day basis. In this talk however I’d like to discuss something a little bit different from my day to day role. I would like to explore with you how blockchain could be used to build a trust based system for the arts world that I believe could lead to a more responsible way for both creators and consumers of art to interact and transact to the mutual benefit of all parties.

First however let’s return to the role of the Software Architect and explain how two significant architectures have got us to where we are today (showing that the humble Software Architect really can change the world).

Architects take existing components and…

This is one of my favourite definitions of what architects do. Although Seth was talking about architects in the construction industry, it’s a definition that very aptly applies to Software Architects as well. By way of illustration here are two famous examples of how architects took some existing components and assembled them in very interesting ways.

1989: Tim Berners-Lee invents the World Wide Web

The genius of Tim Berners-Lee, when he invented the World Wide Web in 1989, was that he brought together three arcane technologies (hypertext, mark-up languages and Internet communication protocols) in a way no one had thought of before and literally transformed the world by democratising information. Recently however, as Berners Lee discusses in an interview in Vanity Fair, the web has begun to reveal its dark underside with issues of trust, privacy and so called fake news dominating much of the headlines over the past two years.

Interestingly, another invention some 20 years later, promises to address some of the problems now being faced by a society that is increasingly dependent on the technology of the web.

2008: Satoshi Nakamoto invents Bitcoin

Satoshi Nakamoto’s paper Bitcoin: A Peer-to-Peer Electronic Cash System, that introduced the world to Bitcoin in 2009, also used three existing ideas (distributed databases, cryptography and proof-of-work) to show how a peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. His genius idea, in a generalised form, was a platform that creates a new basis of trust for business transactions that could ultimately lead to a simplification and acceleration of the economy. We call this blockchain. Could blockchain, the technology that underpins Bitcoin, be the next great enabling technology that not only changes the world (again) but also puts back some of the trust in a the World Wide Web?

Blockchain: Snake oil or a miracle cure?

Depending on your point of view, and personal agenda, blockchain either promises to be a game changing technology that will help address such issues such as the world’s refugee crisis and the management of health supply chains or is the most over-hyped, terrifying and foolish technology ever. Like any new technology we need to be very careful to separate the hype from the reality.

What is blockchain?

Setting aside the hype, blockchain, at its core, is all about trust. It provides a mechanism that allows parties over the internet, who not only don’t trust each other but may not even know each other, to exchange ‘assets’ in a secure and traceable way. These assets can be anything from physical items like cars and diamonds or intangible ones such as music or financial instruments.

Here’s a definition of what a blockchain is.

An append-only, distributed system of record (a ledger) shared across a business network that provides transaction visibility to all involved participants.

Let’s break this down:

1. A blockchain is ‘append only’. That means once you’ve added a record (a block) to it you cannot remove it.
2. A blockchain is ‘distributed’ which means the ledger, or record book, is not just sitting in one computer or data centre but is typically spread around several.
3. A ‘system of record’ means that, at its heart, a blockchain is a record book describing the state of some asset. For example that a car with a given VIN is owned by me.
4. A blockchain is ‘shared’ which means all participants get their own copy, kept up to date and synchronised with all other copies.
5. Because it’s shared all participants have ‘visibility’ of the records or transactions of everyone else (if you want them to).

A business blockchain network has four characteristics…

Business blockchains can be characterised as having these properties:

Consensus

All parties in the network have to agree that a transaction is valid and that it can be added as a new block on the ledger. Gaining such agreement is referred to as consensus and various ways of reaching such consensus are available. One such consensus technique, which is used by the Bitcoin blockchain is referred to as proof-of-work. In Bitcoin proof-of-work is referred to as mining which is a highly compute intensive process as miners must compete to solve a mathematically complex problem to earn new coins. Because of its complexity, mining uses large amounts of computing power. In 2015 it was estimated that the Bitcoin mining network consumed about the same amount of energy as the whole of Ireland!

Happily, however, not all blockchain networks suffer from this problem as they do all not use proof-of-work as a consensus mechanism. Hyperledger, an open source software project owned and operated by the Linux Foundation , provides several different technologies that do not require proof-of-work as a consensus mechanism and so have vastly reduced energy requirements. Hyperledger was formed by over 20 founding companies in December 2015. Hyperledger blockchains are finding favour in the worlds of commerce, government and even the arts! Further, because Hyperledger is an open source project, anyone with access to the right skillset can build and operate their own blockchain network.

Immutability

This means that once you add a new block onto the ledger, it cannot be removed. It’s there for ever and a day. If you do need to change something then you must add a new record saying what that change is. The state of an asset on a blockchain is then the sum of all blocks that refer to asset.

Provenance

Because you can never remove a block from the ledger you can always trace back in time the history of assets being described on the ledger and therefore determine, for example, where it originated or how ownership has changed over time.

Finality

The shared ledger is the place that all participants agree stores ‘the truth’. Because the ledgers records cannot be removed and everyone has agreed them being recorded on there, that is the final source of truth.

… with smart contracts controlling who does what

Another facet of blockchain is the so called ‘smart contract’. Smart contracts are pieces of code that autonomously run on the blockchain, in response to some event, without the interference of a human being. Smart contracts change the state of the blockchain and are responsible for adding new blocks to the chain. In a smart contract the computer code is law and, provided all parties have agreed in advance the validity of that code, once it has run changes to the blockchain cannot be undone but become immutable. The blockchain therefore acts as a source of permanent knowledge about the state of an asset and allows the provenance of any asset to be understood. This is a fundamental difference between a blockchain and an ordinary database. Once a record is entered it cannot be removed.

Some blockchain examples

Finally, for this quick tour of blockchain, let’s take a look at a couple of industry examples that IBM has been working on with its clients.

The first is a new company called Everledger which aims to record on a blockchain the provenance of high value assets, such as diamonds. This allows people to know where assets have come from and how ownership has changed over time avoiding fraud and issues around so called ‘blood diamonds’ which can be used to finance terrorism and other illegal activities.

The second example is the IBM Food Trust Network, a consortium made up of food manufacturers, processors, distributors, retailers and others that allow for food to be tracked from ‘farm to fork’. This allows, for example, the origin of a particular food to be quickly determined in the case of a contamination or outbreak of disease and for only effected items to be taken out the supply chain.

What issues can blockchain address in the arts world?

In the book Artists Re:Thinking the Blockchain various of the contributors discuss how blockchain could be used to create new funding models for the arts by the “renegotiation of the economic and social value of art” as well as helping artists “to engage with new kinds of audiences, patrons and participants.” (For another view of blockchain and the arts see the documentary The Blockchain and Us).

I also believe blockchain could help tackle some of the current problems around trust and lack of privacy on the web as well as address issues around the accumulation of large amounts of user generated content at virtually no cost to the owners in what the American computer scientist Jaron Lanier calls “siren-servers” .

Let’s consider two aspects of the art world that blockchain could address:

Trust

As a creator how do I know people are using my art work legitimately? As a consumer how do I know the creator of the art work is who they say they are and the art work is authentic?

Value

As a creator how do I get the best price for my art work? As a consumer how do I know I am not paying too much for an art work?

Challenges/issues of the global art market (and how blockchain could address them)

Let’s drill down a bit more into what some of these issues are and how a blockchain network could begin to address them. Here’s a list of nine key issues that various players in the world of arts say impacts the multi-billion pound art market and which blockchain could help address in the ways I suggest.

To be clear, not all of these issues will be addressed by technology alone. As with any system that is introduced it needs not only the buy-in of the existing players but also a sometimes radical change in the underlying business model that the current system has developed. ArtChain is one such company that is looking to use blockchain to address some of these issues. Another is the online photography community YouPic.

Introducing YouPic Blockchain

YouPic is an online community for photographers which allows photographers to not only share their images but also receive payment. YouPic is in the process of implementing a blockchain that allows photographers to retain more control over their images. For example:

1. Copyright attribution.
2. Image tracking and copyright tools.
3. Smart contracts for licensing

Every image has a unique fingerprint so when you look up the fingerprint or a version of the image it points out all of the licensing information the creator has listed.

The platform could, for example, search the web to identify illicit uses of images and if identified contact the creator to notify them of a potential copyright breach.

You could also use smart contracts to manage you images automatically, e.g. receive payments in different currencies, or maybe you want to distribute payment to other contributors or just file a claim if your image is used without your consent.

ArtLedger

ArtLedger is a sandbox I am developing for exploring some of these ideas. It’s open source and available on GitHub. I have a very rudimentary proof of concept running in the IBM Cloud that allows you to interact with a blockchain network with some of these actors.

I’m encouraging people to go onto my GitHub project, take a look at the code and the instructions for getting it working and have a play with the live system. I will be adapting it over time to add more functions and see how the issues in the previous stage could be addressed as well as exploring funding models for how such a network could become established and grow.

Summary

So, to summarise:

• Blockchains can provide a system that engenders trust through the combined attributes of: Consensus; Immutability; Provenance; Finality.
• Consortiums of engaged participants should build networks where all benefit.
• Many such networks are at the early stages of development. It is still early days for the technology but results are promising and, for the right use cases, systems based on blockchain have the promise of another step change in driving the economy in a fairer and more just way.
• For the arts world blockchain holds the promise of engaging with new kinds of audiences, patrons and participants and maybe even the creation of new funding models.