Bitcoin & Proof of Existence

It wasn’t so long ago that Bitcoin was truly obscure, relegated to hardcore crypto-geeks existing on the fringes of the internet, non-state anarchists and hard-line libertarians. Born out of the near collapse of the world’s financial system, Bitcoin was released to the public in 2008. Satoshi Nakamoto, the first to introduce the idea, and fellow cryptographers believed that fractional reserve banking erred heavily on central powers to manipulate the supply of money for political purposes. Their solution was to create a currency that would help to supersede the role of central intermediaries — banks.

Satoshi Nakamoto’s Bitcoin Whitepaper introduced the idea of a blockchain — an immutable, decentralized ledger of all transactions across a peer-to-peer network. At the highest level, blockchain technology uses cryptography to verify that data structures are where they should be; they are considered irrefutable because cryptographic hash functions make it extremely easy to spot errors. This effectively creates ‘trust’ since the entire network is able to come to an agreement on its state. For the first time, two anonymous untrusting parties are able to transact in full confidence, eliminating the need for a bank to verify and guarantee a transaction.

The power to openly transact stems from blockchain technologies’ ability to revolutionize the the digital representation of ownership of an asset. Consider the movement of a PDF over email: It creates a digital copy with shared access. Unlike a PDF, when bitcoin is spent, the sender loses access to it, revoking ownership from the sender and communicating to the network who the rightful owner should be. This can be extended to virtually any digital asset including, but not limited to, content licenses, supply chain inventory, and land ownership.

Moving beyond the concept of ownership and blockchain technology is the idea of an unalterable timestamp. By hashing certain types of data onto the blockchain, we can prove that they existed at a certain point in time. Satoshi included the string “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” in the genesis block to refer to a newspaper headline in order to prove that there was no mining on the Bitcoin software client before January 2009.

Esteban Ordano, Po.et’s CTO, was involved in one of the earliest non-financial blockchain use cases in 2013, Proof of Existence. By including the hash of a document in a Bitcoin transaction, he was able to prove that the document existed as soon as the transaction was confirmed onto the blockchain. Proof of Existence guarantees that a work has been created at a certain point in time. This is transformative for intellectual property and the digital media landscape.

The Evolution of Digital Media

The publishing industry has always adapted to new technologies quickly. Think back to what the printing press did to information dissemination. For the first time, scientists, philosophers, and politicians could replicate their ideas quickly and make them available to large audiences. More recently, the low barrier to entry for aspiring content creators has drastically democratized their ability to share ideas and author digital works in a few clicks.

This democratization has lowered the costs associated with distribution. Traditional publishers are no longer the only distribution vehicles. Add to this social media and blogging services and audience amplification has been handed back to the content creator. In the face of all this change, publishers are having to find new ways to make money.

This has all culminated in an ecosystem in which content creators, publishers, and advertisers must work together to create value. Content creators need an audience to share their work and monetize it. Publishers provide a large audience for content creators, but also a network effect to monetize. To complete the cycle, advertisers pay publishers to place content-specific advertisements in front of targeted audiences.

Sourcing the best content creators in order to ensure a guaranteed stream of ad revenue is the key. When it comes to licensing, the process of finding content and engaging creators is extremely arduous. Media is scattered across various channels and copyright information is stored in siloed databases. Publishers are losing immense value by not having processes in place to more efficiently facilitate the transfer of licensed content.

On the web today, these questions are often impossible to answer with certainty:

Who owns this content?

May I use/license it?

Is this an authorized use?

There are a few intermediaries that help answer these questions today. Services like Creative Commons and Shutterstock help creators generate licenses for their work, but fall short in terms of providing a way to negotiate licensing terms. All parties lose value because there are no processes set in place for quick verification, attribution and license purchasing.

Creating a protocol that has evolved with digital media requires complex solutions:

Accurate insights into attribution

Creating a longtail from archived content

Enabling automatic licensing and ad revenue sharing

Generating revenue sharing from paid access

True monetization for quality content curation

Enforceable and verifiable licensing terms and use permissions

Po.et: Proof of Existence 2.0

We are thrilled to announce Po.et — to create an open, universal, and immutable ledger for managing the ownership and licensing of the world’s creative works.

By allowing content creators to timestamp their assets onto the Bitcoin blockchain, the Po.et Network ensures that metadata attribution remains safe, verifiable and immutable. Since Po.et is a decentralized system, there are no single points of failure, meaning the network remains moated and impervious to a shut down.

No longer is there a need to negotiate individual licenses per project. Po.et allows creators to set clear licensing fees and accept payment directly within the platform. Moreover, Po.et makes digital content more discoverable by creating an open network for publishers to search for new content.

Publishers will also be able to utilize Po.et’s payment channels to unlock something we like to call “SEO Liquidity.” Publishers with high domain authority have a great deal of untapped value that can be unlocked by licensing links from their site. This allows publishers to tap into new revenue streams made possible by proper attribution and time-licensing terms.

We like to think of Po.et as Proof of Existence 2.0 in that it aims to create an application ecosystem around the ability to irrefutably prove that a piece of work existed. While the value of such an application is endless, its application is set to enable all parties in the publishing industry to retain value:

Publishers : Po.et reduces friction for publishers by creating a mechanism to discover and source new creative works, as well as generate immutable ownership certificates for works they decide to license;

Po.et reduces friction for publishers by creating a mechanism to discover and source new creative works, as well as generate immutable ownership certificates for works they decide to license; Journalists: Po.et helps journalists build their personal brand by connecting them to publishers looking for creative assets. Easy-to-understand licensing and revenue sharing terms speeds up the process so creators get paid faster;

Po.et helps journalists build their personal brand by connecting them to publishers looking for creative assets. Easy-to-understand licensing and revenue sharing terms speeds up the process so creators get paid faster; Content Creators: Creators can upload the definitive versions of their digital works and ensure that they were first to issue the licenses;

Creators can upload the definitive versions of their digital works and ensure that they were first to issue the licenses; Advertising: Po.et acts as a marketplace in that it connects publishers to advertisers who are willing to pay for re-publishing press releases and marketing content;

Po.et acts as a marketplace in that it connects publishers to advertisers who are willing to pay for re-publishing press releases and marketing content; Branding: Po.et gives brand owners more accurate insight into who has authorized use of their brand assets as well as the frequency of use.

Po.et gives brand owners more accurate insight into who has authorized use of their brand assets as well as the frequency of use. Legal: Po.et allows legal professionals to timestamp any intellectual property onto the Bitcoin blockchain and access those existence records at a later point in time;

How Does Po.et Work?

The basic Po.et building block is a claim. A claim is a Bitcoin transaction consisting of a message (arbitrary data) stored along the public key of the sender and a valid cryptographic signature corresponding to that public key.

Po.et generates a unique Bitcoin transaction with the OP_RETURN script. This opcode marks the transaction output as unspendable and enables the hash output of a work in the message field. By storing the digest of a work’s metadata in the claim message, the document is effectively added onto the Bitcoin blockchain. Once the transaction has been confirmed, it will live on the blockchain forever.

Addressing Our Problem First With Po.et

Po.et was conceived at BTC Media, a place where we’ve experienced the shortcomings of digital attribution and licensing firsthand. Finding qualified authors and quality digital content within our niche was an extremely slow and meticulous process. Once all the necessary content was secured, resources had to be dedicated to editorial changes and payment negotiations. From identifying to publishing quality content is a process that can take weeks.

Efficiency is not a desire, it is a must. So we turned to the technology we know best to solve a problem we understand ourselves. By leveraging the Bitcoin blockchain, we are able to create a platform that makes content creation and publishing workflows simple and attributable.

More importantly, Po.et is an open protocol for developers and entrepreneurs to build on top of. While the publishing industry is where we are building our first integration partnerships — specifically, authenticating blog/news ownership and licensing of content — we’ve built a rich protocol for which we envisage many applications. The future of our Po.et Dapp Store is limitless and can range from content marketplaces to notary services.

Join the Community!

The future of publishing is one we are ready to discuss! We recently opened up our public slack channel for those that want to speak with the team directly. Also, the alpha release is currently posting to a bitcoin testnet, head over to alpha.po.et to check it out.

Want to stay updated on the alpha release and future product launches? You can sign up for our email list at po.et and follow us on twitter.

Thanks,

The Po.et Team