https://ift.tt/3eBhJuh Will Replace Copyrights and Trademarks

Ever since at least 1790 with the passage of the Patent Act, copyright and trademark law has governed the demarcation of property rights of all shapes and sizes. Without property rights, whether physical or intellectual, commerce cannot take place: there would be no incentive for parties to invest if there is no way to link their investment with the reward.

Before the invention of the internet, intellectual property was much easier to manage, there was much less content and much less risk of pirating. Following the Web1 revolution, and even more so with the Web2 revolution with social media, content became much more non-rival and non-excludable. Yes, companies can create paywalls, and many do, but there is generally a way to access the content, or a variant of it, through other mechanisms.

The rapid expansion of content has a lot of benefits, but it comes at the cost of how we make sense of it all and ensures that unique contributions are recognized and rewarded. If a new idea simply gets launched into a sea of noise and there is no way to distinguish it, then that undermines the incentive to innovate in the first place.

Unfortunately, the current legal infrastructure around copyright and trademark law is not well equipped to handle Web3. Even just this past year, the United States Patent and Trademark Office (USPTO) reported that they were “experiencing a huge surge in trademark application filings, which has resulted in a significant increase in unexamined application inventory.” An overextended team of patent officers leads to a decline in patent quality since “examiners fail to identify and apply the references most relevant to the examination of patent applications.”

If it is hard to keep up today, how will the USPTO keep up as Web3 takes over? The reality is that the conventional process for evaluating copyrights and trademarks is highly labor-intensive.

Enter the world of NFTs. Despite all the critics, my belief is that the fundamental innovation behind NFTs is that they tokenize ideas at the atomic level. By digitizing ownership on an immutable ledger for all to see, records, ranging from breakthrough inventions to informal commentary, are tracked on a secure, accessible and standardized system. Moreover,
 
 blockchain 
Blockchain

Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others.

Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others.
Read this Term technologies are well-suited for the application of artificial intelligence, including natural language processing (NLP), which can help resolve conflicts among users who mint similar types of content.

The obvious counterargument is that the USPTO could apply similar types of NLP techniques, and indeed the USPTO is already working hard to do just that. However, there are at least two differences with a decentralized blockchain-based approach.

First, a centralized approach relies on continuous innovation from the centralized entity, whereas a decentralized approach creates incentives at scale for users to contribute towards verification and system improvement. Take, for instance, the incentives that
 
 bitcoin 
Bitcoin

Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.

Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.
Read this Term miners face to complete proof of work: similar incentives could exist at scale for potential overlapping intellectual content in NFTs.

Second, the cost associated with producing NFTs is much lower, which means that the incentive for a user to pirate a single NFT is much lower than, say, to eschew the boundaries of a patent or other form of intellectual property in the conventional system. Technologies, like attn.live, are making it seamless for content creators to produce content at scale across platforms and mint NFTs. For malicious users to pirate anything of serious value would require doing it overtly, which would be easy for the protocol to flag in the system and the marketplace to respond accordingly.

To be sure, there are many more questions and meaningful challenges to resolve. But, the reality is that NFTs are here to stay because they are inherently value-enhancing, not just for producing more flexible art, but also for resolving fundamental challenges related to ownership and authentication. Let’s embrace the challenge, rather than fleeing from it.

Christos A. Makridis is a research affiliate at Stanford University’s Digital Economy Lab and Columbia Business School’s Chazen Institute, and the Chief Technology Officer and Head of Research at Living Opera. He holds dual doctorates in economics and management science & engineering from Stanford University.

Ever since at least 1790 with the passage of the Patent Act, copyright and trademark law has governed the demarcation of property rights of all shapes and sizes. Without property rights, whether physical or intellectual, commerce cannot take place: there would be no incentive for parties to invest if there is no way to link their investment with the reward.

Before the invention of the internet, intellectual property was much easier to manage, there was much less content and much less risk of pirating. Following the Web1 revolution, and even more so with the Web2 revolution with social media, content became much more non-rival and non-excludable. Yes, companies can create paywalls, and many do, but there is generally a way to access the content, or a variant of it, through other mechanisms.

The rapid expansion of content has a lot of benefits, but it comes at the cost of how we make sense of it all and ensures that unique contributions are recognized and rewarded. If a new idea simply gets launched into a sea of noise and there is no way to distinguish it, then that undermines the incentive to innovate in the first place.

Unfortunately, the current legal infrastructure around copyright and trademark law is not well equipped to handle Web3. Even just this past year, the United States Patent and Trademark Office (USPTO) reported that they were “experiencing a huge surge in trademark application filings, which has resulted in a significant increase in unexamined application inventory.” An overextended team of patent officers leads to a decline in patent quality since “examiners fail to identify and apply the references most relevant to the examination of patent applications.”

If it is hard to keep up today, how will the USPTO keep up as Web3 takes over? The reality is that the conventional process for evaluating copyrights and trademarks is highly labor-intensive.

Enter the world of NFTs. Despite all the critics, my belief is that the fundamental innovation behind NFTs is that they tokenize ideas at the atomic level. By digitizing ownership on an immutable ledger for all to see, records, ranging from breakthrough inventions to informal commentary, are tracked on a secure, accessible and standardized system. Moreover,
 
 blockchain 
Blockchain

Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others.

Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others.
Read this Term technologies are well-suited for the application of artificial intelligence, including natural language processing (NLP), which can help resolve conflicts among users who mint similar types of content.

The obvious counterargument is that the USPTO could apply similar types of NLP techniques, and indeed the USPTO is already working hard to do just that. However, there are at least two differences with a decentralized blockchain-based approach.

First, a centralized approach relies on continuous innovation from the centralized entity, whereas a decentralized approach creates incentives at scale for users to contribute towards verification and system improvement. Take, for instance, the incentives that
 
 bitcoin 
Bitcoin

Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.

Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.
Read this Term miners face to complete proof of work: similar incentives could exist at scale for potential overlapping intellectual content in NFTs.

Second, the cost associated with producing NFTs is much lower, which means that the incentive for a user to pirate a single NFT is much lower than, say, to eschew the boundaries of a patent or other form of intellectual property in the conventional system. Technologies, like attn.live, are making it seamless for content creators to produce content at scale across platforms and mint NFTs. For malicious users to pirate anything of serious value would require doing it overtly, which would be easy for the protocol to flag in the system and the marketplace to respond accordingly.

To be sure, there are many more questions and meaningful challenges to resolve. But, the reality is that NFTs are here to stay because they are inherently value-enhancing, not just for producing more flexible art, but also for resolving fundamental challenges related to ownership and authentication. Let’s embrace the challenge, rather than fleeing from it.

Christos A. Makridis is a research affiliate at Stanford University’s Digital Economy Lab and Columbia Business School’s Chazen Institute, and the Chief Technology Officer and Head of Research at Living Opera. He holds dual doctorates in economics and management science & engineering from Stanford University.