Is Bitcoin the Key to Digital Copyright?

The technology behind Bitcoin may allow for controlled sharing and transfer of digital assets.

Bitcoin has been going through a rough patch lately. The slow motion implosion of the once-largest exchange. The arrest of a notable evangelist. The bug that the media blew out of proportion, but that attackers still exploited. This is what the world has heard about Bitcoin in the last few weeks.

Yet not a day goes by that I don’t come across some new use of the technology: Either a new use of Bitcoin’s decentralized ledger itself, like event contracting using verified facts from a third party such as Reality Keys; or a new application of the decentralized trust concept that Bitcoin introduced, like the OpenLibernet project, which aims to give people an incentive to build out a censorship-resistant mesh network.

A case in point is how Bitcoin’s technology could help solve one of the gnarliest problems of 21st Century copyright. If you buy a book at Barnes and Noble, you are free to give it away to a friend after you’ve read it, or sell it to a used book store. But you can’t if you buy that same book for your Kindle or iPad. To lend, sell, or give away a digital copy of a digital book or song is copyright infringement.

Copyright law grants copyright owners the exclusive right to sell, lend, or give away copies of their protected works. This “distribution right” is separate and apart from the better known “reproduction right,” which is the exclusive right to make copies of a protected work. This means that a flea market vendor of pirated DVDs is infringing copyright even if he didn’t make the copies himself.

What allows us to sell a book we’ve bought and read is an exception to distribution rights known as the first-sale doctrine. It limits copyright owners’ rights to the “first sale” of any particular copy of a work. And by copy, the Copyright Act means a physical copy. Once copyright owners sell a book or CD, their interest in that copy ends. The buyer is free to sell, lend, give away, or even destroy the copy.

The same is not true about ebooks or MP3s for the simple reason that there are no physical copies of the works. They are merely digital files zapped to your Kindle or iPhone. You are free to sell your devices with books and music on them, sure, but that’s not the same thing. Yet courts have been consistently literal in their reading of the statute. Never mind that it was enacted almost 40 years ago, before there was digital media.

Resistance to digital first-sale is animated in part by the fact that selling a digital good is not as straight-forward as a physical one. If I give you a CD I no longer want, it’s pretty clear I no longer have the CD. But if I email you an MP3 I bought on iTunes, I will retain a copy unless I delete it. And emailing you that MP3 implicates not just the copyright owner’s distribution rights, but their reproduction rights as well. Unlike a CD, there’s no good way for me to give or sell you an MP3 without making a copy and thus infringing on copyright.

Redigi is a company that’s attempting to square this circle. You can use their software to upload songs you have purchased from iTunes. Once the songs make it to their servers, Redigi deletes them from your hard drive so that only one copy exists at a time. You can then make your songs available for purchase and you lose access to the ones that sell. It’s a neat trick, but in March of last year a federal judge didn’t buy it. He found the digital second market was infringing copyright because even though there’s only one copy left at the end of the day, it’s a new copy, not the user’s copy.

There are also other problems with Redigi’s scheme. While its software uploads and deletes songs from your computer, it has no way of knowing whether you’ve got copies of those same songs on other devices. And when you plug in an iPod or iPhone and it detects a previously deleted song, it only asks you to delete it voluntarily. Digital first-sale will probably require amending the Copyright Act, but that’s a tough sell when it’s so easy to keep a copy.

The problem is that there is too much trust involved. You have to trust Redigi to stay online. You have to trust the users not to keep surreptitious copies of the music they sell. Bitcoin could offer an improvement over this system.

As I have said before, Bitcoin is at root a decentralized public ledger, and what it allows for the first time is the transfer of digital property from one person to another without the need for a central authority like Redigi. The Bitcoin network allows one to transfer tokens called bitcoins, and to date these tokens have been used to represent money. But there’s no reason they could not represent a particular instance of a song or a book or a movie.

Particular music files could be associated with a particular user’s public Bitcoin addresses and encrypted in such a way that the user’s corresponding private key is needed to play the songs. Selling, lending, or giving away a song or a book would be as simple as sending it to someone else’s public address. At that point, only recipient’s private keys can unlock the file. And this would all be cryptographically provable, without requiring trust.

An astute reader will have noticed that this would essentially be a kind of universal digital rights management (DRM) scheme, and that’s certainly the case. But unlike traditional DRM, the system would not rely on central corporate authority, but on a decentralized network that is quickly emerging as a new standard Internet protocol. Alternatively, no DRM can be employed and the blockchain can simply serve as registry to legitimate transfers.

The point is not that employing Bitcoin technology is the best way, or even a good way, to address the digital first-sale issue. But it highlights how versatile and revolutionary the capacity to transfer ownership of digital assets that Bitcoin introduced is—no matter what’s happening to the currency today.

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  • Brandon||

    OT- HuffPo: Slow to catch on, but always eager to pile on.

    http://www.huffingtonpost.com/.....l#comments

  • waffles||

    how versatile and revolutionary

    such technology. wow.

  • OldMexican||

    What allows us to sell a book we've bought and read is an exception to distribution rights known as the first-sale doctrine


    Actually, the sale of a book we already read falls under the "we're not really that serious about the government-made-up-monopoly a.k.a. copyright and all of its nasty consequences if we went all the way to its logical conclusion" doctrine. If the government and IP proponents were really that serious about IP being real property, then you would NOT be able to sell a book you just read - you would have to burn it and then erase it from your mind so you could not divulge its contents to the wife or your friends from memory.

  • ~Knarf Yenrab~||

    you would have to burn it and then erase it from your mind

    I would've paid good money for the latter after I picked up a Brad Thor novel that one time.

  • John Galt||

    "...you would NOT be able to sell a book you just read - you would have to burn it and then erase it from your mind so you could not divulge its contents to the wife or your friends from memory."

    The technology to enforce this is on it's way, be patient.

  • OldMexican||

    The point is not that employing Bitcoin technology is the best way, or even a good way, to address the digital first-sale issue.


    The best way to deal with IP issues is to get rid of the concept altogether. It makes NO economic sense as ideas are NOT rivalrous nor exclusive, which means ideas are not subject to scarcity. IP is 100% counterproductive when it comes to the most efficient distribution of intellectual works and the impact one could expect to achieve from them. Regardless of the apparent convenience or ingenuity of a Bitcoin-like technology to limit the distribution of digitalized intellectual works, the fact is that treating ideas the same way a market treats money would needlessly CHOKE the distribution of such works to the point they become very little known. Ideas are NOT like money.

  • Dr. Frankenstien||

    Good ideas are scarce.

    If someone is unable to profit from their good idea then you will get fewer of them in the public domain where they can generate even more good ideas.

    Standard disclaimer that our current system of Disney protection can and should be improved.

  • Dave Miller||

    You're conflating "Scarce", the economic concept which is used to justify property rights, with "Scarce", meaning rare. If you're trying to confuse the issue, that's how you do it.

  • ||

    Good ideas are not scarce.

    The ability to capitalize and monetize them is scarce. It's called labor.

  • Dr. Frankenstien||

    I would say both. Ideas are common and mostly bad. Something that benefits people is rare. Rarer still is the ability to as you say capitalize and monetize them.

  • OldMexican||

    Re: Dr. Frankenstien,

    Ideas are common and mostly bad.


    You're confusing the value of an idea with its value as a product.

    Something that benefits people is rare.


    Again, you're confusing an idea with a product. The only test of the viability of an idea as product is the market, because ideas themselves can be distributed at zero cost (save the time of the observer only) which means there cannot be a viability test.

  • OldMexican||

    Re: Dr. Frankenstien,

    Good ideas are scarce.


    Ideas are not subject to scarcity as all living humans can potentially conceive of the same idea at the same time, which means ideas are not rivalrous nor exclusive.

    We're talking economic concepts here.

    If someone is unable to profit from their good idea then you will get fewer of them


    You're begging the question by assuming people think only when they can profit from their thoughts. That's PREPOSTEROUS. Ideas are the result of intellectual processes, which people have all the time as long as they're conscious.

  • sungazer||

    Information is not scarce; our currency is. Can scare currency accurately represent value of non-scarce resources? I'd argue our current currencies do nothing to accurately represent the value of information which has caused artificial scarcity of information. This is inherently inefficient. Bitcoin is great that it is non-centralized and getting people to think about currency, but does nothing innovative for information sharing.

  • Cytotoxic||

    The best way to deal with IP issues is to get rid of the concept altogether.

    All property is intellectual property. If you oppose IP, you oppose private property.

  • kbolino||

    Usually, you employ reductio ad absurdum on the counterpoint you are trying to disprove. Carrying your own position to its logical but absurd conclusion is not a strong proof technique.

  • Paul.||

    The problem, with Bitcoin as I see it, is it's the Wild West. It's totally unregulated. That's why we have to regulate it. We need to make Bitcoin more like California or New York.

  • NewWorldDan||

    Particular music files could be associated with a particular user’s public Bitcoin addresses and encrypted in such a way that the user’s corresponding private key is needed to play the songs. Selling, lending, or giving away a song or a book would be as simple as sending it to someone else’s public address. At that point, only recipient’s private keys can unlock the file. And this would all be cryptographically provable, without requiring trust

    Not quite true... Once a user has a copy and can decrypt it, they then permanently have a decrypted copy. So having the file encrypted becomes pointless. There is value, though, in having a record of ownership.

  • SweatingGin||

    Late to the game. Another excellent use of blockchain technology is things like title to real estate (a particular plot of land could be represented by a particular 1/100,000,000 of a Bitcoin).

    Also proof of existence of contracts. I paid .0005 Bitcoin (30 cents?) to have the hash of a document put into the block chain. That hash is there forever, no way to get it out, and anyone can verify it is there. I present the document, take the hash of that document, and see that it matches. Therefore, that document existed, in that form (presumably signed with a digital signature, as well) at the time the transaction with the hash hit the block chain.

  • PaulW||

    Gotta love the IP haters and their misguided sense of economics and property which makes our particular ideology (libertarianism) look fucking idiotic.

    Keep up the "good fight" though, fucktards.

  • ||

    Gotta love IP worshippers in their misguided attempts to call themselves libertarians when they cling to the notion that the average person can't have a good idea or start a business based on it without a nanny gov't protecting it for them.

    When the President says, "You didn't build that." do you think he's talking about the inventor who needs gov't protection from market forces or the baker or the babysitter or the construction contractor or the banker who started their businesses without IP?

    Good luck figuring out how all of the innovations from Rome to the Renaissance were created, used, shared, prized, and protected without IP, fucktard.

  • Sigivald||

    At that point, writes Jerry Brito, only recipient’s private keys can unlock the file. And this would all be cryptographically provable, without requiring trust.

    And once it was 'unlocked' you'd have a copy of it that was completely unprotected.

    Even if you needed A Special Viewer for the file (which people would, frankly, not stand for), it'd still be vulnerable to cracks and extraction from the software, like the early anti-DRM work against iTunes, back before Apple had the leverage to kill DRM for music there.

    (Note that e.g. Amazon doesn't even really TRY with the DRM for Kindle books; it's there because the publishers demand it, but it's trivially easy to decrypt your own content.)

    DRM is only ever going to be useful to slow down or stop the lazy and half-assed, and it's increasingly not worthwhile even for that.

    We don't need to "destroy all IP!!!" or the like for DRM to die. It'll do that just fine on its own.

  • ||

    We don't need to "destroy all IP!!!" or the like for DRM to die. It'll do that just fine on its own.

    I agree. We need "destroy all IP!!!" so that there isn't a government-mandated "gas+break pedal" drug and medical device development machinery.

    We need "destroy all IP!!!" so there isn't a constant legal IP war of attrition going on amongst industry heavyweights which stifles innovation.

    We need "destroy all IP!!!" so that taking apart the stuff you own and even physically creating your own copies of it doesn't strictly constitute a legal offence.

    IMO, IP has been like the dog that guards the hen house. It's great as long as he never kills any chickens or eats any eggs. If he kills even one, you have to shoot him because he can never be trusted again. Between DRM and patent trolling (which has been going on longer in the healthcare field) I think it's well past the time to shoot the dog.

  • ||

    What I'd like to see is using it as a digital form of a watermark given that certificate authorities have failed.

  • trig||

    Ok.. except you could easily still extract a copy of the file before reselling the "original" bitcoin enchanced version.

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