If you have a basic grasp of what a database is (a system of records and fields), you are close to understanding blockchain technology, which is essentially a “distributed database.” As Vinya Gupta recently wrote in the Harvard Business Review, blockchain challenges the traditional database model with “a radical proposition: What if your database worked like a network—a network that’s shared with everybody in the world, where anyone and anything can connect to it?”
Blockchain technology is an open, decentralized database that facilitates transactions. Some people think of it as a decentralized public ledger. And through its transparency, blockchain creates trust among peers, for there is no one single party controlling data, and the community can easily verify content for accuracy.
A blockchain is built by connecting many nodes, or computer users, who have a blockchain address (you establish an address by going to an open source blockchain provider). Once a blockchain database record is changed, that change is replicated across all the blockchain nodes in the network, meaning that the information is permanent and cannot be altered without replicating across the chain. Contrast this with the traditional database, which is owned by one party, which can provide access as they see fit, as well as alter or delete records in the database at will.
Bitcoin Instead of Banks
Blockchain is most commonly associated with bitcoin, because bitcoin was the first major application to leverage blockchain technology. Bitcoin is a digital (virtual) currency that millions of people use to buy-and-sell goods and services, just as they now use currency within the traditional banking system. The big difference, however, is that no single institution—a national bank, for example—controls bitcoin, and it is 100% digital. Bitcoin embodies blockchain technology because it is a decentralized currency, and all transaction records are public, and these “databases” are replicated at nodes all over the world.
In practical terms, this means a bitcoin user doesn’t need a bank account to access their money, they can remain anonymous (though their activity is public), and there is no one central authority to dictate monetary policy.
In addition to bitcoin, there is also ether, which is another leading digital currency. It runs on a blockchain technology called Ethereum. JPMorgan, Microsoft and Intel recently announced they are creating a computing system based on Ethereum.
Blockchain Starts to Rock
Now that blockchain has gained a foothold in the financial world, music and entertainment (M&E) leaders are beginning to see how they can leverage the technology to fight piracy, protect copyright holders, and maintain a better supply chain. Efforts to protect and monetize digital content are crucial; the industry is still feeling the pinch from structural changes that began many years ago with the advent of file sharing services.
Blockchain promises to help music publishers and artists claim their ownership rights by “engineering” metadata into a music track and more accurately linking the content to the producer. One of the challenges of applying this technology is accurately identifying blockchain content and Digimarc Barcode is one of the leading solutions in this arena. Digimarc’s CTO Tony Rodriguez recently wrote about the M&E industry’s challenge of combatting illicit music downloading.