How The Blockchain Can Fight Online Piracy

Steganography embeds a hidden digital message within a video or audio file which references the ownership rights and licencing terms of that piece of content. This message is publicly available within our smart contract, which acts as a decentralised register of ownership.


Coinist was recently fortunate enough to chat with the folks at Veredictum, a project which can be found in our ICO calendar, which seeks to help reduce online piracy dramatically with a little help from blockchain technology. Before we jump into the interview take a moment and watch the short introduction video about Veredictum below.

Hi. Can you begin by telling me what your personal connection to the piracy issue is? Did you start Veredictum because you noticed the quality of the content around you deteriorating? Were you, or others close to you, hurt from the consequences of piracy? Or is it some other reason?

Personally, I have experienced piracy first-hand. I wrote, directed and co-produced an independent feature film, 54 Days, nearly 4 years ago with 116 great people who worked on the project. We did well on the international film festival circuit winning numerous awards. The film got pirated – not to the same extent as Hollywood movies – but pirated nonetheless. When you work on a passion project with 116 people who put their heart and soul into the project to then see all your hard work pirated not only does it affect the whole team financially but also what does it say to the team that worked on the project? Is their contribution worth nothing? Less than nothing? And we’re not alone in this. If you multiply this feeling and this story across the whole creative industry we are seeing and hearing of so many stories like this, time after time.

Independent film making buddies of mine are losing 50% of their revenues due to piracy. If you just reflect on that for a moment. If your boss or your clients cut your salary or your bill in half – how would that affect you? If filmmakers don’t pay back the investors who supported them, they won’t be able to make another movie – it’s that simple; it’s binary. It’s called show business for a reason. If nothing is done to stop this decimation of content producers’ income, in our view, a number of things will happen:

– We will see content head just one way – towards the gutter – where content is mass produced and positioned towards the mass market where piracy is factored into the content as an occupational hazard.

– We will lose great independent voices – those controversial voices, those unique voices, those cultural voices. As a society, we will be in severe danger of becoming homogenized and culturally empty. This is more than just an anti-piracy platform – this is a movement; a movement about uplifting cultural values.

Passion moves the earth but it doesn’t pay the bills and there comes a time when you say to yourself “You know what– enough is enough!”. For me, and in tandem with others, that time has now arrived.

One of the underlying assumptions of your project is that if more money flows to content creators, then the public can expect more valuable things. If, on the other hand, less money flows to content creators, we can expect less valuable things. As you mention, without the proper financial rewards in place, we’re going to lose edgy creative voices. You also point out that Veredictum understands that piracy is a multi-dimensional beast, and you have plans to tackle the problem from different angles. But let’s jump into pricing. You believe that part of the problem with piracy is an imbalance between the cost of content and what users are willing to pay to gain access to it. Can you explain in more detail this problem (using a real world example) and how Veredictum will put technology in place to help solve it.

We’re based in Sydney, Australia, and earlier this year there was a major boxing match that was available on Pay-TV. The cost was $65 to watch this. In Northern Australia, a viewer “Facebook-lived” the boxing match to 150,000 people who paid nothing. Now this says two things to us:

First, people “pirate” because they can and because it was easy to do so (essentially without any repercussions), but also, we would argue, the price point was too high. How would the situation have been different if the pricing was $10?

We’re not having a go at the individual broadcaster but there is a deep disconnect between what people are prepared to pay for content and what the broadcasters want to charge. Of course, the broadcaster would have done their homework to maximise their yield, but imagine instead if there was the ability to directly offer content directly to your audience via a marketplace that connects key market influencers and their “tribes” to collectively bid for content. For example, in the boxing match example above, if a major twitter account with say 1m fans of boxing has the ability to co-ordinate their tribe to collectively bid for the content, the producer of the content interacts with their core target audience through a new wholesale channel fronted by the market influencer. They make the choice as to whether they accept the price and subsequent revenue generation within this wholesale channel. On the other hand, the audience pays what they are prepared to accept as a collective, a market is created and a market price determined. Imagine also, if this could be market tested by the broadcaster in advance of the fight itself, they have data they can assess the potential economics of the whole broadcast.

So, as part of our vision, we want to create a marketplace connecting market influencers and their tribes directly through to content producers to define a marketplace that works. If people can get access to content how they want, when they want at a price point that is fair the desire to pirate will be reduced – thus fulfilling our core mantra of hitting the drivers of piracy rather than just its symptoms.

You mention Veredictum is not just dedicated to helping video and film content creators. It’s about helping many different content creators? Currently is Veredictum prioritizing one form of media over another?

At the moment, we are focused on film and video because this is a space we know very well and have been working on for 18 months. The majority of the platform we will be working on will be open-source so that we can work openly with others in the space to create solutions for other markets – e.g. photographs, fashion designs, music. We want to create the core infrastructure that enables others to solve similar piracy problems in other vertical markets.

You bring up that social media theft is a major concern. People are Facebook streaming from inside cinemas, from in front of their TV’s and from inside sports grounds. Another major issue you brought up is the theft from a content creator who published on YouTube only to have their content downloaded and uploaded without authorization or permission to Facebook. This ensues the immediate loss of revenues for the original content creator. Now this is where Veredictum starts to get really interesting. Can you explain how blockchain technology can help not only identify but also help automate and solve this particular problem?

Our platform is being designed in four core stages:

First, we are creating a decentralised database of video-based content which defines ownership and the associated distribution rights of that video.

Second, we digitally fingerprint the video content with reference to those ownership and distribution rights. This gives the ability for video owners to identify their video content and to issue takedown notices straight away, based on their ownership rights. (this could also be extended to advertising and marketing based videos, where trackability outside of the traditional social media platforms is notoriously difficult.)

Third, the decentralised infrastructure to search and detect for registered content – the “SETI” for registered content if you like. (SETI is the Search for Extra-Terrestrial Intelligence out of Berkley University – where signals are sent into outer-space looking for intelligent life. The data is received back at Berkley and passed through to 3m people globally who process that data remotely and send it back to Berkley.) Our vision is to have the creative community form a decentralised structure of nodes to help us remotely (and programmatically) search for registered content. The nodes, for example, but not necessarily limited to, members of the creative community, would only need to make available their surplus computing power and bandwidth to help us do this. They would not need any programming skills and would be incentivised with Ventana our cryptocurrency.

Four, the nodes that essentially represent an anti-piracy advocacy would be able to make available their surplus bandwidth to provide us with the ability to enable “white-hat” peer-to-peer video distribution to provide the distribution structure to underpin the marketplace defined earlier.

Stages 1-3 give the content producers the power to:

– Register their content
– Digitally fingerprint their content
– Identify their content immediately to issue a take-down notice – or other action they wish to undertake

Once our search and detect structure is operational, we can automatically define and locate content using our decentralised infrastructure.

Combing all three means producers have the ability to locate their registered content and instigate remedial action, quickly. The quicker this can be done, the quicker they can protect their revenues.

Speaking of blockchain technology, The Veredictum platform relies on the communication between the internet world and and blockchain world. How does this communication and linkage between technologies happen?

The blockchain is core to our offering, but not the only technology we are using to solve the problem of piracy. The blockchain has two core functions within our system:

Permanently defining ownership and distribution rights within the decentralised global registry for video-based content.

Acting as incentivisation for the nodes to provide their surplus computing power and bandwidth to help with both the “search and detect” and “white-hat peer-to-peer distribution” structures. We need an incentivisation structure that rewards any of our global infrastructure partners to make available 2 cents worth of bandwidth. This could not be done with traditional FIAT currency-based systems – after all, the minimum credit card charge is around 35 cents.

Users of your platform would have the opportunity to add invisible or inaudible tags to their content. Can you explain how this works in more detail? What is steganography and how does your platform use it?

Steganography embeds a hidden digital message within a video or audio file which references the ownership rights and licencing terms of that piece of content. This message is publicly available within our smart contract, which acts as a decentralised register of ownership. The digital fingerprint does not degrade the quality of the content, but is highly resistant to transformations (e.g. re-recording onto a new device or transcoding into a new file, flipping, clipping, etc). This fingerprint enables us to understand where the file has moved if it is pirated (content telemetry) using a distributed computation network.

We have a variety of technologies that we are working with in this regard. We are also partnering with niche, deep technology specialists world-wide to ensure we have best-in-class steganography technology that is sufficiently robust to aggressively withstand potential attacks from “bad actors”.

You mention that piracy is a multi faceted problem that won’t be solved with one solution. So the idea at Veredictum is to build a “tool box” to help solve these problems. As you’ve mentioned, one of the tools in your tool box includes the idea of using nodes which would simply use the latent processing power and bandwidth of your users to look at small sections of the search space for infringements. Can you tell us in more detail what these nodes are doing?

The nodes are the individual members of the creative community (and further afield) that represent the decentralised infrastructure of the Veredictum platform. The nodes help us solve the drivers of video piracy and theft – not just the symptoms.

For the search and detect infrastructure, individually, the nodes will run a web based application that will automatically search a designated segment of the internet. The search space is determined programmatically by Veredictum. The node downloads the files within the search space, runs our web-based decoder, and reports back any digital fingerprints that were found. Our platform will then inform the producer of the content via an analytics dashboard. The nodes are rewarded for their effort via our cryptocurrency Ventana which can either be kept or exchanged for bitcoin or other crytpocurrencies within the exchange markets used by those producers that are nodes wishing to search the web for their content.

For the white-hat peer-to-peer distribution infrastructure, the nodes will make available their surplus bandwidth to support the distribution of video-based content. This is a similar structure to the traditional bit-torrenting. Bit-torrenting, however, is not as secure as we would like to see, so we are about to partner with a dedicated technology specialist that has peer-to-peer technology that has been approved by one of the main film studios. Some new and innovating technology is used here to stop content leakage at the point of consumption (not blockchain). Again, nodes will be incentivised through Ventana, our cryptocurrency.

The cryptocurrency of your project is called Ventana. What internal functions and utility does Ventana have? How do users spend Ventana? How can users earn Ventana?

The utility of Ventana is primarily as an incentivisation structure to nodes to provide surplus bandwidth and computing power to help us achieve our goal of reducing film and video piracy by 80% over 10 years. Equally, producers can use Ventana to pay for services on the platform. For example, we are committed to releasing the commercial product of digital fingerprinting videos within 90 days of the completion of our Token Sale. To further enhance the early network effect of Ventana we will be offering a 20% discount to those that use Ventana as a payment structure for our services.

Users can earn Ventana by making available their surplus computing power and bandwidth. This is ideally suited to members of the creative community, who typically have powerful computers and high levels of bandwidth to produce the creative content – e.g. video and music files. In a similar way to bitcoin mining, the more resources that are devoted to hunting for registered content and the more bandwidth that is made available to provide peer-to-peer distribution services, the more Ventana can be earned.

You’re currently in the process of launching your token sale / ICO. How is that going so far? What are some major lessons and takeaways from the experience so far?

We launched our Token Sale on August 14 and we have some traction, but not as much as we would like to see at these early stages. We have implemented various strategies to improve on this from establishing our marketing bounty campaign through to getting interviews with various influencer channels all interested in the cryptocurrency space. I think the biggest lesson so far has been about engagement with the larger volume supporters of our project. This provides the momentum that others need to see. From our perspective, we have headed down too many blind alleys here in Australia, but are now having increasingly positive dialogues with existing international contacts and via new contacts we have established by undertaking the Token Sale. It’s too early to say where this will head but we are doing everything in our power to get above the noise in terms of the quality of the project we are working on to generate more interest in what we are doing and to get the bigger financial fish on the hook. Certainly, the quality of the project is being re-enforced by many professional commentators in this space and it is about generating awareness within the crypto financing community of the quality of our project .

Does Veredictum run on the Ethereum platform? After using Ethereum for your project, what are some of you major findings and takeaways? Do you feel like Ethereum and smart contacts give you all of the tools you need to make Veredictum what you want it to be?

There are elements that make sense to run on the Ethereum platform, at least in the short-term, especially given we have launched an ERC20 compliant token. For the distributed registration product, the public blockchain makes sense. For our search and detect structures for registered content, there are other technologies out there that we are keeping a close eye on to see how we can work together – for example Golem that is looking at distributed computing. There is no point in us re-inventing the wheel – especially if the technology adds value to our overall proposition of reducing the drivers to film and video piracy. If we can get to market quicker by partnering it makes complete sense to do so.

The scale of our distributed computing platform is also beyond the current capabilities of Ethereum. This means that much of the verification of computations needs to be done on a layer-2 solution off the main chain (using something like state-channels or a side-chain). Our whitepaper describes this as being performed centrally by Veredictum in the first instance. As blockchain technology matures, we will have an opportunity to move to a fully trustless model.

Thank you for taking the time to chat with us today. To our readers, if you want to learn more about Veredictum please visit their homepage here:

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