Understanding Blockchains

Posted on 2/1/2018 by Jim Pickerell | Printable Version | Comments (1)

At some point in the future Blockchains may play a significant role in the licensing of stock imagery. My role is to try to provide my readers with a simplified, not too technical, understanding of the potential benefits, and risks, of blockchain technology so the readers might better plan their individual futures.

While reporting on this new technology, I’m also learning. About the time I think I understand something about blockchains, I learn that what I thought was true is wrong. Please bear with me.

Last week I outlined in a story some of the data blockchains might be able track relative to each image use. This information might then be made immediately available to creators in order to aid them in planning new production.

Justin Brinson of PicturEngine has pointed out that it is highly unlikely the blockchains will ever provide the kind of detail I outlined given the time it takes to upload each hash (or bit of data) to the various blocks of the distributed ledger in the chain.

I found some information relative to the time it takes to write information to a blockchain interesting. Bitcoin processes about 3 transactions per second. The Ethereum technology that most developers seem to be planning to use can perform about 30 transactions per second. Compare this to the worldwide financial system that performs 100,000 transactions per second. Some aspects of the world financial system may not be quite as secure, but there are a lot more transactions to process.

On a slightly different note Facebook records 53 “likes” per second, but this is not particularly relevant because Facebook does not lose money, or is held financially liable if a “like” is not properly recorded.

Having a ledger distributed among a host of computers offers a security advantage for certain financial transactions, and licenses, but writing to a blockchain is not practical for most constantly updated website usage data such as mentioned in my previous story.

I listed the following “other information” that could be collected and stored includes:

    •    Total times an image is delivered in a search return
    •    Total times viewed by customer (Often customers only review a small percentage of the images delivered before moving on to another search. What creators need to know is the number of times their image has actually been viewed by a customer.
    •    This could be determined by the number of pages the customer viewed before leaving a given set of search results, and if the image actually appeared on one of those pages.)
    •    Total times viewed by unique customer (if the same customer, operating from the same computer did several searches and viewed the image multiple times it would only be counted once.)
    •    Total times licensed.
    •    Customer ID for each image licensed
    •    Total gross revenue generated (Minus refunds)
    •    For each image, all words used in a search that found the image, if it was viewed.
    •    There should be a separate list attached to each word that tracks the number of times it was used in any search that eventually resulting in licensing
The one thing in the above list that can and should be tracked in the blockchain is the Customer ID for each image licensed.

According to Justin, “writing the rest of the usage data I outlined every time a new block is written is not practical and your whole blockchain system will suffer. Many of these items listed in the ‘other information” category can/would be written to every block essentially permanently saving and unnecessarily constantly updating data that is better suited for a Database. (Imagine reprinting an entire book just because you changed or updated one word.) Current databases are well suited for keeping track of this usage data.”

He continued, “Simply put Blockchains are built to write a record (data) in a permanent state. For some records this is needed, such as financial transaction, data records such as proof of ownership, who owns the copyright, these are good use cases for blockchain. This data is written once per transaction and is rarely updated. This is data we need to save in a permanent format.

“Example of a license:  
  • Image license “#” transaction “#”
  • Image “#” (any identifying image info for tracking)
    by “©”  (ownership information)
  • Is licensed by (Licensor or agency id etc.)
  • To (licensee or Art Buyer id, person/company who has licensed the use of the image etc.)
  • Terms of license including any extra license info dealing with the license or immediate transaction that needs to be saved in the permanent record.
“In the above example, these Items need to be tracked at a later date and should be written to a permanent record. These items can be later referenced and remain unchangeable if written to a blockchain. They can of course be updated, but that will be written to a later block saving each interaction within the leader separately, thus saving each time the record is changed or modified.”
It is also important to note that much, if not all, of the data I described is currently being collected by the major agencies. It is not being shared because the agencies see it as proprietary to their businesses. Thus, the introduction of blockchains is not likely to bring about any changes that will make it easier for photographers to determine what to shoot.

Protecting Copyright

Another factor that I am just beginning to comprehend is that there are a lot of different blockchains, using the same basic technology, but which are not interconnected. It is not clear to me whether interconnection is now possible, or may be in the future.

So suppose we have two companies – Kodak (http://www.selling-stock.com/Article/kodak-announces-photographer-friendly-cryptoc ) and Copytrack (http://www.selling-stock.com/Article/copytracks-blockchain-based-global-copyright ) – collecting data in blockchains about all licenses made through them.

If each is the exclusive licensor of the images in their system, then they would have a record of all future licenses of those images.

But, suppose the photographer has been in business for several years and has been licensing images through several agencies before first putting the images with Copytrack or Kodak. Neither company will have a record of previous licenses so they will still have to go back to the photographer to determine if any of the uses they discover were actually legally licensed.

Going forward, it seems unlikely that a photographer would want to make Copytrack or Kodak the exclusive licensor of their newly produced images. Given the current state of the market it seems more likely that Getty, Shutterstock, AdobeStock or Alamy might do a better job of making sales to actual customers. One would think that in order to maximize sales it might be better to have the images non-exclusively with several of these organizations.

I can’t see any way that a blockchain will enable organizations to track anything other than their own sales. Assuming it would be possible to connect the information from a number of different blockchains, I can’t imagine that various image sellers would be willing to share the kind of specific, detailed information about their sales with their competitors.

If creators want to handle all of their own sales directly, and never allow a distributor to be involved in the licensing of their images then, I can see how such a site might work for them. But I can’t imagine that will be a desirable way of working for most creators.

Copyright © 2018 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


  • Paula Lumbard Posted Feb 5, 2018
    Thank you Jim, the blockchain discussion has been floating around so to have it here is very helpful. Please lets have comments....

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