Why blockchains won't revolutionize publishing
In 2021, everyone is talking about “bitcoin”, “blockchain”, and “non-fungible tokens” (NFTs). Blockchains are cool technology, and investment dollars are chasing all kinds of businesses that are built upon it.
In 2018, the generally awesome Alliance of Independent Authors (ALLi) wrote:
Blockchain technology looks set to facilitate the next disruption in the publishing industry
As someone with decades of experience in software development and a few years of publishing experience, here is why I don’t think blockchain tech is important for publishing.
What is “blockchain”, exactly?
Starting with the name, a “blockchain” is literally a chain of blocks. Each block can contain whatever data the creators of the chain are trying to track, and can even contain some automated instructions (called “smart contracts”). Blockchains provide a way for computers around the world, run by anyone, to agree on the information contained in the blockchain without having to trust each other. This is a major innovation.
With bitcoin, the best-known blockchain in the world, the data stored is essentially a list of transactions. People can exchange bitcoins, and the software makes sure that no one can tamper with that transaction list.
For this article, I will not be talking about bitcoin or other cryptocurrencies, though. 3Blue1Brown on YouTube has a fantastic introduction to Bitcoin, in case you’re interested in better understanding it.
Soon, I’ll talk about proposed and existing publishing applications of blockchain, which tend to track the rights holder of a book and transactions related to the book.
It’s about trust
I touched upon the fact that blockchains reduce the need for trust among the participants in the chain. “Public-interest technologist” Bruce Schneier wrote a 2019 article: Blockchain and Trust, which explores this aspect of the technology. Early in the article, he states his conclusion:
Blockchain solutions are often much worse than what they replace.
Schneier points out that blockchain moves trust from people and institutions to technology:
You need to trust the cryptography, the protocols, the software, the computers and the network. And you need to trust them absolutely, because they’re often single points of failure.
There have been many instances already in which the technology has “failed”, requiring people to take action to fix it, sometimes by “forking” the chain (making a new blockchain and getting everyone to shift over to it).
Do you need a public blockchain? The answer is almost certainly no. A blockchain probably doesn’t solve the security problems you think it solves. The security problems it solves are probably not the ones you have. (Manipulating audit data is probably not your major security risk.) A false trust in blockchain can itself be a security risk. The inefficiencies, especially in scaling, are probably not worth it. I have looked at many blockchain applications, and all of them could achieve the same security properties without using a blockchain — of course, then they wouldn’t have the cool name.
With this background in what blockchain is and how it tries to shuffle trust around, I can get into the specifics of what people are trying to do with it in publishing and why blockchain doesn’t help.
Publishing today without blockchain
Let’s look at how we’re already operating and where we’re placing our trust.
If you’re traditionally published, you’re putting trust in your publisher to pay attention to sales, properly report them, and pay you what you’re owed. For many authors, you’re also adding a layer of trust for your agent. Agents get the money first, take their cut, and pass the rest on to you.
If you’re self-published, you’re trusting the stores like Amazon to report sales properly and pay you your due. This is especially important for subscription services like Kindle Unlimited and Audible, where the payment scheme is more complex than just 1 copy = a set payout. In fact, traditionally published authors are also counting on this, they’re just two layers removed from retailer-level reporting.
There have been high-profile breaches in the trust placed in some of these organizations, resulting in lawsuits and pain for all around.
But at least there’s someone the injured parties can sue, and courts that can hear the cases. With blockchain, a failure of the technology or a mistake can mean game over with no recourse (as with the man who lost the password to his bitcoin wallet, which was worth millions).
What I’m saying is that the system we have today is imperfect, as all systems are, but that it works, and people continue to place new books into the system. Large numbers of indie authors have signed up with Smashwords or Draft2Digital, adding another layer of trust voluntarily because they know those companies have reputations to uphold and that courts exist as a backstop against bad behavior.
What is blockchain supposed to bring us?
Some suggestions from ALLi’s article about Authors and Blockchain:
- Copyright/piracy protection
- Smart Contracts to eliminate the need for lawyers
- Smart Wallets to make payments and connect up the people involved with making a book
- Privacy: enabling people to send messages to each other without companies having access to what we say
Whereas ALLi’s view is aspirational, there are a couple of companies already offering blockchain-based solutions for authors. Here’s my summary of Publica’s stated benefits:
- Books are tradeable and resaleable, and you get a cut of resales
- The technology works worldwide, so you’re not limited to certain markets
- Pre-sell your book while you’re working on it, and it’s automatically available to the purchasers on completion
Bookchain promises a list of features similar to those described by ALLi and Publica:
- Combatting illegal copying
- The data is unchangeable, and identifies you as the original publisher
- Freedom from any particular e-reader
- Lend and resell books without a third party
Why we don’t need blockchain for any of these things
Establishing copyright ownership
We already have government-run systems with worldwide treaties that offer copyright protection, backed by the force of law. Registering a copyright in the United States is not difficult or expensive. If you want to see if a person is the owner of a work, you can check with the copyright catalog.
This system works better than a blockchain one. What if some new blockchain claiming to represent ownership of works pops up and someone else gets there first with your book? Because it’s a blockchain, that data is unchangeable. Eventually, the creators of that blockchain may try to make it possible for someone to put forth a claim of true ownership that involves convincing some portion of the people using the chain to vouch for that ownership.
Here’s an article about a team working in this space:
What the Prescient team has discovered is that others experimenting with blockchain are seeing the same thing: an initial problem of knowing whether the person identified as the copyright owner is, in fact, the copyright owner.
If there’s a blockchain (or a couple) that becomes well known, then this may be a tractable problem for new works. Authors just register their work at the earliest possible moment. If we end up with ten blockchains that become big enough to warrant registration on, then authors will want to hire a middleman to put them on all of those chains, manage the income, etc. Oh, and each chain and the middleman will almost certainly extract fees.
This is not a better world than the one we live in.
Copyright holders have been trying to combat piracy since before the internet, implementing one “digital rights management” system after another. These do little beyond impeding honest customers, for the simple reason that people need to be able to access the work they’ve purchased. Once someone can read the book, it becomes possible for them to make and distribute a copy.
Every attempt to protect the work from copying limits the honest customers. Turning off copy/paste from the work makes it more difficult for them to take notes or cite passages.
And, like the poor owner of those $200 million+ in lost bitcoin, if you lose your ebook library password, no one can help you. If you lose your Amazon password, at least there’s a customer support person who can restore your access.
Direct distribution with freedom from needing a particular e-reader
This is trivial right now thanks to services like PayHip and BookFunnel. BookFunnel, in particular, offers a great user experience in getting the book onto your device of choice or reading in their app or on the web.
But you might be thinking, what if BookFunnel goes out of business? With BookFunnel, the reader can download their books to their devices and make backups. Once you’ve bought a book, you’re not really dependent on BookFunnel being around.
Resale with money flowing back to the author
Now this is a genuinely new thing that doesn’t exist today, and it sounds cool, but it does not require blockchain to make this happen. Here’s what’s required:
- Enough publishers interested in offering this to readers,
- A book retailer of sufficient scale to get this out into the marketplace, and
- A good reader experience
This is a three-sided market: publishers (or authors, in the case of indies), retailers, and readers, and three-sided markets are hard to get going. I mentioned a couple of companies up above who are trying to do this. As you’d expect, there are a tiny number of books available on their blockchains and, I’m sure, a similarly tiny number of readers.
Imagine that resale looks attractive to publishers. Amazon, with their centralized systems, will have a much easier time implementing this than those folks trying to get a blockchain going. Plus, Amazon already has e-readers in the marketplace that they can “lend” books to. The ability to take away books is the main bit of technology needed to allow resale. Amazon KDP could absolutely offer the ability to mark a book as resaleable and allow the publisher to set the terms of the resale. They can then integrate used copies right into the Kindle book pages.
You know who else could offer this? Kobo. They’re a smaller player than Amazon, but they provide excellent service for their publishers and have solid sales in some markets around the world. A scrappy competitor like Kobo is just the sort of business that can kick start business model innovation.
Looking at the future of book sales, which is more likely: ebook resale or ebook subscriptions? I’d bet on subscription services. That there are already subscription book services (Kindle Unlimited, Kobo Plus, Scribd) would support the idea that this is a business model that will continue to grow.
Pre-sell your book with automatic availability
Pre-orders are not new to ebooks, though authors don’t get the money right away. Leanpub has long offered a model that allows the author to get paid once they’ve gotten some chapters done and to push additional chapters out to their readers as they’re written.
Lower fees and micropayments?
This topic is more about cryptocurrencies than the use of blockchain for publishing. If a stable, low-fee, micropayment-ready cryptocurrency comes along, wouldn’t Amazon accept it?
NFTs and digital signatures
Non-fungible tokens (NFTs) have been in the news this year because there have been some very high-profile sales of them for millions of dollars. An NFT acts like ownership of a work of digital art, similar to ownership of an original painting. If someone buys an NFT, a transaction is recorded on the blockchain, with a pointer to a file that reflects the purchased item. The original creator can even get a cut of the sale if the NFT changes hands.
There are alternative, non-blockchain versions of this possible, but I don’t think it’s worth getting into that. I’m supportive of the idea of digital collectibles that can help support creators. There is a collectibles market for books today, and that’s a niche part of publishing. Most readers are looking to read a book, not buy a rare item. Plus, the collectibles market natural favors well-known authors, for whom a rare item will have value to someone.
NFTs, or something similar implemented without blockchain, may be an interesting niche market, but I don’t see how it could revolutionize publishing. As of today, it looks like many creators who try NFTs don’t earn even a penny.
How I might be wrong
New technologies come along all the time, and it’s not always easy to tell at first glance what the technology will ultimately mean, or if it will even reach mass adoption.
When Napster came along in the late ’90s, it created a peer-to-peer network, allowing people to share their music libraries and exchange songs. Why did it become popular? Was it that people wanted to trade music? Or perhaps they wanted free music?
History tells us the answers to these questions. Napster required a centralized server to catalog all the music that was available. As a result, the music industry sued the company and drove it out of business. Napster itself was quickly replaced by others like Gnutella, which had no central entity to sue. Gnutella didn’t win out, though: iTunes did.
What people wanted was a convenient, inexpensive way to acquire downloadable songs, which has ultimately given way to subscription music services.
It’s possible that one of these blockchain-based offerings could prove out a new business model for authors. The difference from the days of Napster, however, is that Napster dragged the record labels toward what listeners wanted by giving music away for free. Authors and publishers certainly wouldn’t want innovation to happen that way this time around.
As a software developer, I think blockchain is likely not the best or most straightforward implementation of publishing-specific features. Perhaps someone could come along with a blockchain-based offering that provides just the right amount of innovation for authors, readers, and publishers and disrupts the market, but they would do so in spite of the technology rather than because of it.
Truly, if there’s a use case that’s best served by blockchain, I would love to hear about it and be happy to update this article.
Blockchain can be used to avoid censorship and regulation
There are books that are legal in some countries but would violate a retailer’s terms of service. There are undoubtedly regulations that make it extremely difficult for authors from one country to sell in another.
Distributed, peer-to-peer technology like blockchains can get around these kinds of problems. The anonymity offered will be genuinely important in some circumstances.
That said, I don’t think these uses are likely to be broadly influential on the rest of the market.
Blockchains aren’t going to change book publishing
I am excited about a lot of the change that is coming for authors and publishers: AI-assisted writing with technologies like GPT-3, and more possibilities with audio thanks to vastly improved text-to-speech. On the business side, it has become easier than ever for independent author/publishers to sell direct, providing a better relationship with our readers and more profit.
The core concepts behind blockchain technology are really cool, and I love that as a technologist. But in a three-way market involving publishers, book retailers/aggregators, and readers, I don’t think blockchains actually solve common problems or enable uses that can’t be better enabled in other ways.