Bitcoin Protocol Could Aid Copyright, Say Academics, Performance Royalty Advocates; Others Disagree

Although decentralized DRM isn’t near implementation, it could prove beneficial to musicians and rightsholders, said Casey Rae, Future of Music Coalition interim executive director. DRM seems beyond repair and it’s doubtful that decentralized trust mechanisms could do much to fix it, said Derek Bambauer, a University of Arizona law professor specializing in Internet law and intellectual property. The benefit of decentralized trust mechanisms might be outweighed by its cost, said Mitch Stoltz, Electronic Frontier Foundation staff attorney.

DRM “requires cryptographic infrastructure to distribute and manage keys,” which can be “centralized or distributed,” said James Grimmelmann, a University of Maryland law professor specializing in intellectual property and technology. Decentralized DRM is “more complicated, but entirely feasible in theory,” he said. Unlike centralized DRM, “there is no single party who can change the system at will and stop issuing keys,” he said.

The choice of offering content under a decentralized trust mechanism lies with the copyright holder, and provides “flexibility” that’s “already built into copyright law,” said Villasenor by email. “DTM [decentralized trust mechanism] is not some sort of magic solution to the piracy problem,” but it can be used to provide both “artists and copyright-right respecting consumers with a higher degree of flexibility with respect to content access,” he said. A decentralized trust mechanism could be “used to ensure that the license really is transferred” from seller to buyer, while keeping the seller from creating a personal copy, he said.

"There’s no reason why copyright as it stands can’t function within a bitcoin universe,” said Rae by email. “Things can get really messy” with the music industry constantly in flux, including “frustrations in artist compensation” and “licensing inefficiencies,” said Rae. As a result, one can “imagine a world where ownership is trackable in a decentralized ledger that contains information about all relevant transactions,” but the music industry is “nowhere near there yet,” he said. Decentralized DRM would make “micro-transactions more efficient for consumers” and lead to more “participation in a legitimate digital marketplace,” he said.

DRM is “essentially a failure,” said Bambauer, who was “skeptical” whether a “distributed trust” would make “much of a difference for DRM.” “Improving DRM is a little bit like improving chastity belts: the question is whether the underlying tech is worth the bother,” he said. The Bitcoin “blockchain,” or transaction ledger, would be a “great alternative” to a “centralized DRM,” said Jerry Brito, director of the Mercatus Center’s Technology Policy Program at George Mason University. With the Bitcoin protocol, one wouldn’t have to “rely on a single company to keep its DRM servers running,” he said.

Although Bitcoin users aren’t “identified in the protocol,” the “transactions are traceable,” said Grimmelmann. “A determined adversary might well be able to reconstruct who some buyers are,” he said. The Bitcoin protocol doesn’t fix the issue of “users running non-trusted hardware,” nor does it “close the analog hole” or in other words, “pointing a camera at your computer screen,” he said. The Bitcoin protocol would change the present system by providing an “effectively irrevocable transfer right,” he said. “Copyright owners just don’t want to allow resale,” said Grimmelmann. Rightsholders would “also fear that such a system would be more fragile” than the one presently constructed and with a “greater risk that if the DRM is insecure, they may have no way to repair it,” he said.

"Bitcoin doesn’t seem to be an antipiracy silver bullet,” said Rae. If digital transactions are “more trustworthy, convenient and global,” it might “reduce the impetus to not pay,” he said, saying he wouldn’t “bet the future” on the proposition. The copyright industry’s first priority is to “not take advantage of their creator partners,” he said. “If systems like bitcoin help keep everyone honest, it could be a positive.” Case law might need to develop and recognize that the Bitcoin blockchain “allows one to not merely copy a digital file, but to actually transfer it without the need for third parties,” said Brito. “That’s a revolutionary new technology that Bitcoin made possible.”

In the case of re-sale or transfer of digital content, “I don’t understand why a content owner would prefer a distributed system over a centralized one, especially given there’s some risk of authentication fraud,” said Bambauer. Bitcoin could find opportunity in “small transactions with copyrighted works,” such as paying 10 cents for a 15-second clip of The Simpsons, he said. If Bitcoin allows consumers to “engage in micro-transactions” and do so cheaply, that would make it “possible for content owners to realize a new source of revenue -- and they are usually delighted to do that,” he said. “But that’s yet to be determined."

The Bitcoin protocol won’t change “without getting buy-in from a large group of people” and the entertainment industry doesn’t want to “create a system they cannot easily change later,” said EFF’s Stoltz. The implementation of a decentralized system would come at “great expense,” but would result only in a “slightly better product,” he said. “It may be marginally better, but it’s not what people really want.”