Version: 1.0, last update: Nov 1, 2022
The Potential of Blockchain Technologies
Web3 provides a blockchain-based infrastructure that has the ability to disrupt the status quo by introducing and empowering new stakeholders and new systems of organization. Many of the inherent features of blockchains are compatible with the fundamentals of copyrights. For instance, efficiencies rendered by open public ledgers can reduce frictions, improve licensing efficiency, and increase the autonomy of creators, all while providing an accessible and verifiable registry of works.
2nd Layer Distributed Ledger Technology (DLT)
Layer-2 blockchains, or distributed ledgers, are used as a secondary framework built on top of a base-layer blockchain such as Ethereum. The main goals of Layer-2s are to increase transaction efficiency and enable scaling, both of which are a challenge for Layer-1 blockchains as adoption expands.
2nd-layer distributed ledgers can cheaply store a wide range of token transactions such as currency transfers, domain name purchases, and the verification of ownership deeds and other public records. All data is stored across multiple locations at any point in time by node operators who are incentivized to run the software and verify transactions, reducing the threat of hackers gaining unauthorized access. Due to their decentralized nature, DLTs provide a higher level of security and transparency to creator economies.
Smart contracts are executable software that can automate and standardize the licensing and copyright process. These automated contracts communicate with distributed ledgers based on predetermined parameters and automated data feeds. They also share some of the same features as DLTs, such as immutability, censorship resistance, and the ability to self-enforce.
Smart contracts empower a publicly verified system of licensing that can also automate and scale payment systems within the digital content industry, reducing costs and creating new global licensing standards that are compatible with Web3 digital platforms.
International copyrights today are fragmented into bundles of rights representing 176 countries, with many of them varying by scope or duration13. The global, open nature of distributed ledgers allows for a shift in the stakeholders in today’s copyright system, introducing creators into the process through the decentralized autonomous organization (DAO), and making it easier for them to coordinate international rights with a blockchain-based, globally standardized licensing system.13. WIPO: Summary of the Berne Convention for the Protection of Literary and Artistic Works
In the stock media content industry, where millions of works of varying values have a large base of global users and right holders, blockchain technology improves market coordination. Global transactions are faster and cheaper and stock content can be safely stored and easily tracked or transferred. Creators get paid in real-time for the rights to their creative assets and are no longer beholden to the centralized giant.