EB78 – Trent McConaghy: Ascribe And The Internet Of Ownership

Transcript

[Music] this episode of epicenter Bitcoin is brought to you by shapeshift.io with no account or sonup required it's the easiest way to buy and sell Litecoin counterparty Dogecoin Dash and other leading cryptocurrencies go to shapeshift.io to instantly convert your alt coins and to discover the future of cryptocurrency exchanges hello welcome to EP Center Bitcoin the show which talks about the Technologies projects and startups driving decentralization and the global cryptocurrency Revolution my name is Sebastian

KU and my name is Brian pan crane we're here today with uh Trent mccog he's the CTO of a scribe and I've known Trent for quite a while he is also in Berlin and he works in a really interesting startup that uses the blockchain to sort of solve the problem of ownership in the digital space so Trent thanks so much for joining us today hi it's really a pleasure thanks for having me on um yeah I mean here Trent gave a talk recently at the Bitcoin Meetup and it was I mean we talked about a scribe and what they wanted to do a few times before but the talk I thought was really was really good and sort of really uh

you know brought forth this Vision that you guys have so I thought it would be great to to have you on because it's also I think it's a really really good use case of people doing something with the blockchain you know that goes beyond the usual money transaction context so uh well Trend to get started can you tell us a little bit about a scribe and and what the problem is you guys are trying to solve uh sure so um in general um it's a problem that exist with digital property and it getss even worse when it's on the internet and the problem is that it's really difficult for creators of digital

content to get compensated fairly for their work um and it's also difficult for consumers to consume work um works sometimes and all that but it's really comes down to the creators how do you get paid when you create stuff and um a scribe is really trying to address that um in order to help the creators get compensated in order to help um audiences get the content they want in order to help connectors marketplaces and so on um have authentic digital content so that's kind of the problem that we're attacking and it really is an internet scale problem and so we've actually some of the Technologies we're deploying are internet scale um there's really kind of two major pieces um to the approach one of them is easy secure

legals and the other thing is visibility into usage of the content so the legals um um the easy part of the legals is um basically formalizing the existing copyright rights that creators have and the secure legals this is basically um recording transactions in the blockchain so time stamping so leveraging the the time stamping aspect of the blockchain to record these transactions that are um already legally binding from the contracts so and so maybe before we dive into the the specific of ascribe uh I'd like to spend a little bit more time on this problem I mean I I think just some extent we're all a little bit aware of it you know I mean everybody will have heard or will be aware of file sharing

right there's a b torent and and then you know we all know um yeah the problem with piracy and then we know what the record labels for example do to try to prevent that which which then again can be a problem for consumers but can we can we spend a little bit more time on on fleshing out exactly what the reason is and why this is not working at the moment sure um definitely so kind of throw a rock um and you'll find a problem um when it comes to ownership of digital property in the web you talked about piracy and all that a lot of the time people don't want to be Pirates they're happy to pay fair price for work

um but uh it just isn't convenient so for example when iTunes came out actually as the years have worn on with iTunes and Spotify and the like um piracy has gone down um of of Music simply because the experience was good enough that people were willing to pay a fair price for that um and another example uh you know I live in in Berlin but my German is really pretty terrible so um I want to see new release movies in English online you know just as soon as they come out on DVD but I can't legally here in Berlin um I can go to iTunes um Germany but it will only give me the um German version I can try to um you know sign into iTunes in my Canadian

account but it notices my ISP and doesn't let me uh I can try to use Netflix but it doesn't have the new movies and there's really you know Amazon also it has just the um German versions so the only way that I can actually get a movie that's English that's new release is if I VPN or or torrent it and I don't want to be a pirate so that's really a problem there really should be a convenient way for my um for consumers who want to view content who want to pay a fair price to use it um so you know there's many many examples that's a couple um and you know you talked about DRM in general DRM is sort of this idea that goes back decades this idea of trying to take a lock uh and put it around a digital file and

then this you know magical mystical hope that if you put a lock in that file maybe people will never ever crack it but you know that's kind of fighting the physics of bits as soon as one person has cracked the key then it's going gone for good you know with um DVDs Sony and a bunch of other companies had spent Millions to create a um crypto cryptography DRM for DVDs within a couple days of DVDs being released it was cracked and at first Sony and the other guys they thought oh yeah yeah must be some big well-funded Corporation no it was just a guy his name was John he cracked it he's just a kid right DVD John so um the point and what the point is once that was cracked it was out there for good so in general you know um

DRM has been an idea for a long time but it's really against the physics of bits right um you copy copy copy copy as Amanda Palmer puts it um it really shouldn't be trying to lock down the content itself it should be about trying to protect the ownership of the title to that content so it's the difference between access and title and that's really kind of you know everyone has been getting that confused and at a scribe what we're trying to do is really help people to nail down the title that self to transfer ownership of the title etc etc Yeah you mentioned something that hits really close to home for me man it's like trying to watch American or North American content in English legally it's it's just impossible to do in Europe without have without going

through pirated uh content so uh and there's one quote that always sticks to my mind and I can't remember who said it exactly but it was some on some podcast somewhere I heard someone say like it's this is so this is so absurd like I want to watch this but there's some idiot with a law degree that is preventing me from doing so because I I I I I don't understand why I'm pressing myself so but um yeah it is a huge problem how does uh what what has changed now and how does blockchain technology potentially solve that uh where we didn't have Solutions before right I mean so the the ascribed solution um leverages blockchain is part of the um overall technology um and legal

framework to solve this it is isn't just blockchain um you know you it's it's a combination of things so the blockchain um it's really sort of three things there's the um the legal side and then there's the visibility side and together they they constitute um the value so um really to be able to establish ownership I mean as a Creator as soon as you know as soon as you create a file a piece of art whatever you're the um you have the copyright rights um but it's really hard for people to um to transfer that and if someone else claims those copyright rights what recourse do you have to say that you had it first and you know sometimes artists they will actually take a USB file and mail um a USB stick put their file in that and mail it to

themselves back and forth and back and like in the mail just to sort of have that proof um what the blockchain does is it's sort of like taking U and putting a file into a USB and mailing it to yourself except it's much much more convenient so you get that sort of Legally binding Tim stamp that you had access to that file file at that point in time and then the second part is you know when you're transferring ownership what that comes down to is um bequeathing a portion of your um copyright rights The Beneficial use rights um to uh the purchaser and then they can transfer and so on and so forth traditionally this has only been the realm of the big corporations you know the guys who can hire teams of lawyers to keep away us Canadians from from watching you know the latest new release

but um what a scribe is doing thanks to partly blockchain thanks to the right legals and other technology is rather than just making this the realm of the Enterprise it can be the realm of the individual so go ahead when you mentioned transferring ownership and we were talking about this before the show and it's something that I've been thinking about since doing this research is in a digital realm is ownership really desirable I guess is one part of the question or discussion we can have and the other part is do we have this notion of scarcity in the digital realm that we have with physical art or should there be this notion of scarcity and by that I mean so you have

a piece of art okay so I've got this like mask on my wall here that somebody made okay well I can touch it I can feel it uh it's nice and I know that there's an artist that worked on this and that gives it more value to me than if it was some like plastic knockoff from uh made in China um with uh with digital art you don't really have that because it's just bits right and I would go to as far as saying that like if I look at the Mona Lisa for the first time if I look at it as just a JPEG I'll still be moved by it I'll still be inspired by what the artist was trying to put out so it seems like as soon as you get into the digital

space there are a whole bunch of things that don't exist in in the Physical Realm yeah so um so to answer your question there was sort of two questions there um can you have scarcity in digital and uh what about the idea of property and digital at all and this idea of property and digital at all it actually goes back to um the very idea of intellectual property if you think about the word intellectual property intellectual means ideas and property means well to own something right and um it goes back you know hundreds of years uh in fact the very one of the very first copyright cases was in the 1600s where people were

fighting over a book and 3,000 people died in a battle over a book actually in Ireland of all places and um it was about the copyright rights and so the question is is it desirable for someone to have to be able to own an idea well if you're the author of that book and you just spent the last 5 years of your life writing it how do you feel if um everyone has just as much right of you as you in order to um make money from it and you know that's that's not very fair so the the idea of owning your ideas that you put hard work into as a Creator that's the core idea of intellectual property um copyright is about um works like books and music and so on there's um inventions which is what patent law

covers and then there's trademarks which is um logos and these sorts of things and each of them is sort of a a piece of overall intellectual property the idea of owning ideas um so now the question is can you translate these existing intellectual property rights into bits and the answer is actually yes um simply because they're already ephemeral they're already you know not tangible it's an idea you can't really put your hands around it and grasp it so it's um you can use bits to record that you have title but um it's always been something that is it's not tangible um so I think that's how it relates and then just sort of your final question sort of had been

related to the idea of what about multiple editions you know um what about having five or 10 editions you can do that with um you know books and otherwise but does it make sense for digital and well if you look at it there actually the idea of additions goes back hundreds of years and there's always been a debate but at the end um additions have always emerged you go back to the time of rhin there's actually 20 copies of the Thinker out there in the world um and there is one um cast for all those 20 bronze sculptures of the thing er uh photography there was debates for actually decades on the idea that you could have multiple Prints but that's been resolved um etchings all of these things um there there's actually been limited editions and part of the reason

actually is going back is simply to help compensate the Creator so it's basically the Creator is bestowing the copyright rights in order to get compensated if you could have a million copies um that or a million additions then it wouldn't be as as valuable it might not be um possible for the Creator to get his copyrights right so in terms of of additions that's I guess it's with additions that I have the most problem with I don't see the the value in having additions in a digital realm because it's just bits and you can make as many as you want without without any work you know well I I would I would suggest like that let's come back to this sort of general question but I

think let's talk first about the sort of the exam of the digital art Market because I think there it's it's an interesting example and I think it kind of makes a lot of sense there and uh it's it becomes much more complicated to wrap your head around this when you talk about a song for example like do you have an interest in owning a song if all you want to do is listen to it right but let's talk about digital art Market because I think that's a great example and that's the also what you guys are focusing on at the moment uh yeah sure so digital is our initial Market we're also spending time with Photography in 3D but focusing on digital art so in the world in the world of digital art um which is basically pieces of art that

are created digitally and um transmitted digitally so like an image or a movie these sorts of things that um you know when you would transfer ownership it's actually ideally transferring it um as a file as opposed to putting on it onto say a vcr and gluing the VCR lid shut which is actually what people have done in the past um so in in the world of art the most important thing for Value um of a piece is Providence the ownership history and so let's say you have something that it looks 500 years old but you don't know who the owner was for 50 years the value is going to be a lot lower and um if you have it and you don't know the the Providence at all um

then the value is essentially zero um sometimes you can even recover the Providence you know there's example of the the fabri egg where someone bought it in a flea market for $5,000 or so and they tried to sell it for scrap metal but no one would buy it so they ended up Googling around and discovering that it was a fabri egg dating back to the time of Peter the Great and then it got sold an auction for tens of millions of dollars so in that example the Providence was recovered and thanks to a sufficient documentation on the internet um in the AR um in the archives of the Armitage Etc um the the Val the Providence has recovered and the value shut up to tens of Millions in the world of digital and with files there hasn't traditionally been Providence and because of that there hasn't been a way

to really lock down the value of these digital files that gets transmitted and because of that the the digital art Market hasn't really taken off so the overall size of the Art Market itself is depending who you ask 50 billion 60 billion 70 billion somewhere in there so it's bigger um or par with movies with Internet advertising with video games it's that sort of size of Market but um digital art is um depending what numbers you look at it's somewhere between 100 million and a few hundred million so it's it's really a fraction which is kind of amazing given that it's 2015 you know this age of social networks and digital everything except for the Art Market so um and really there um people in the art world have called it an

elephant in the room problem that you know it's 2015 digital everywhere yet we don't have digital art um in a broad sense and it's because this Providence problem has not been properly solved until now of course so um basically by using the um the combination of transfer of copyright rights um in embedded in a contract and recorded on the blockchain that enables digital Providence in a perfect kind of fashion um as long as the blockchain is around or mirrors and copies are made then that Providence is around and that's basically Providence that did not exist before so it solves this very very root core problem of digital art and Hope hopefully you know it will make a

pretty big um impact on the art industry so so if I can rephrase that right so the problem before was let's say you created this digital work of art and then I'm the artist and I want to sell that well with art the the concept of scarcity is kind of very Central if you're an art collector you don't want to buy this thing if a million other people can have it as well or if if you're not you know if it's not rare in some in some way and of course with digital uh files how could it be I mean it's I mean maybe the artist can promise you he only gives it to you and a few

other people but then you kind of have to trust that you know trust his word and then you don't know what these other people are going to do maybe because once they have to file of course they could give it to other people and if there's no no record of who owns this then like why would anybody pay for this it just it it makes sense that this doesn't work right and then but of course if you bring the blockchain in you sort of register the piece of art in the blockchain and say oh there's only five of those and you know now you sell it to me and I can check in the blockchain that I own one of them and there are only five and I can transfer it on and and that person then has it and it's clear I don't have it anymore

so that kind of uh yeah sort of solves that problem and of course it separates and I think that's also very interesting when we talk about the distinction between the physical and the digital right in the in the physical one you have sort of the file or the the content the object and the ownership of that is is the same thing right like I you you have the painting and you also own the painting uh but then digitally this could be different right so I could own this work of art and someone and I have it the file the physical digital file and someone else also has the file but doesn't own the art right so you sort of separating those two which is very

interesting and and I think that's also where it gets confusing because in some instances you're like why would I pay more for owning it when I can just have it but of course in I think in the digital art Market it's totally obvious because if you're collector well then you care about ownership right that's very Central yeah yeah that's exactly it it's you you you put you hit the nail on the head it's really about the difference between access and ownership and interestingly you know if you have a piece of digital art you actually want people to share it make a million copies because it's actually a proxy for Value if you can see that there's a million shares of your work it probably means that you know there's someone out there who's going to want to pay money to actually have the title to that or one

of the titles to it right so um it's it's kind of cool that um this distinction is not only useful um to really establish ownership but also as a proxy for Value doesn't that sort of break the model where by having ownership you're in a position of power because you essentially control the distribution of that piece of art being able to display it in a gallery for example or sell it to the highest bidder whereas if you don't if you can just um have copies online whether or not you own them or not people are still going to be able to to to look at them and to uh um yeah to experience the art right yeah so in general like you can't fight the physics

of bits right I mean you can try to take a file and lock it down or water Market or something but um you know ultimately that all of that's going to just you know break and we've seen you know that happen with the attempts of DRM over the last decades and it hasn't worked um to say to own something it's a funny concept a bit um it's a bit like the word Consciousness you know when you when you use the word Consciousness when trying to describe the brain there's a lot of different interpretations of what it means and it ends in a lot of and sometimes arguments Etc and strong philosophies Etc um so ownership of physical is is pretty straightforward you're holding it um Etc it's yours um in digital is sort of as brown was pointing out it's a little bit different but the cool thing is when it comes to

um media whether it be digital art or 3D designs or music all this sort of stuff um you can actually unpack the word ownership into something that actually has a legal meaning and that's copyright law right so um copyright law is designed exactly to protect um the creators and anyone who gets the copyright rights so to say that you you know if if you create something you can say that you own it and that translates exactly to saying you have the copyright rights to transfer ownership that means as a Creator you're you're bestowing copy uh a portion of the copyright rights to whoever buys that piece and then you know as person a sells to person B person B sells to person C that's actually a transfer of the

copyright rights so um the title and to your to your point of sort of distribution um you can't you know stop the flow of bits in a sense if someone has a copy and they want to you know spread it throughout the world um you know you can't sort of plug the internet that way right you can try and you know big corporations in the past have tried um but it doesn't work very well right um but if you are a copyright owner and someone out there is um has taken your work and is trying to sell it on a website you actually have legal recourse to approach the person on that website and tell them to take it down and if they don't um you can have legal proceedings against them um a wiser strategy would simply to um try to monetize it to say Hey you know you've

been using this how about you give me €50 or500 for your effort and um there actually are companies out there who do this for certain times of media um it's just sort of a businessto business sort of thing right now though um we see that um these sorts of things um if you have the right Technologies like blockchain and really easy to use legals then you can bring it to the individual so in a sense just like PayPal brought um transfers of money um between individuals and then Bitcoin too now um think of us as a PayPal for ownership a PayPal for digital IP where you can transfer digital IP from person to person without needing an army of lawyers behind

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listen to that music you know is is a great way to monetize and that's that's why people want to do this dming even though maybe uh it's hard to do it and and there's a part where you know information wants to be free and that sort of stuff but it it seems like it would be a great fit or sort of natural fit if somebody developed the DRM system on top of a scribe right where perhaps the software would check ownership on the on the blockchain and you know for example am I allowed to watch this movie uh and you know if so I can see it if not I can't and that perhaps would also I mean it's a strange idea to think about right because then you could have maybe a

secondary Market let's say I buy uh some Hollywood movie I watch it and then I can transfer the ownership to someone else so they can watch it I can maybe sell it on uh have you thought about that and and what's your view of the idea of of sort of putting a DRM system on top of a scribe right so when I think about DRM I sort of think about um like taking a file and putting a lock around it or maybe putting on some like hidden Watermark or something but um and I think that's you there's other ways though but what you're talking about is it was a bit of that but the other half was sort of a way to monetize in sort of a rental framework right so people can rent um stuff from you and and so this is something that we actually um have

lead users for and we're building as we speak to support the rental um and rentals and Loans so for example um I'm an artist I want to loan uh a piece of work to a museum and I want that loan to actually be recorded on the blockchain so um this functionality you know this is very important because you know if you loan to MoMA or Louver then you're going to the value of your work will go up and then a rental is just simply a loan with dollars attached right and um you can think of it as also related to um ownership or more generally copyright rights so doing a loan means you're bestowing um a certain amount of copyright rights for private or public viewing for a limited period of time in a limited context and so that is exactly

you know part of what a scribe is helping to support if people want to build systems where you're you know you're like a video rental store um or some sort of loaning renting Marketplace on top of a scribe great right a scribe is simply a service you know our our main um way of people interacting with us is via the API in that sense um we have a web app we have an API but for this sort of thing it would be our API and we're really just a service so yes definitely we flat about it a lot well but let's let's talk about this idea of the internet of ownership and in the talk you gave at the meet up in Berlin you talked about this really interesting uh project called Zan do

that kind of had this Vision a long long time ago yeah I'd love to so um and if you don't mind I'd like to sort of backtrack a couple like um take take a few minutes just to elaborate because um it's it's pretty cool so if you sort of think about why um ownership of digital property especially on the Internet is a mess um you kind of first of all have to go to more near-term internet history and that's the worldwide web and in 1989 Tim burner Lee um drafted the concept of the worldwide web in March of ' 89 by Christmas of 1990 he'd actually implemented the whole first cut the first web server the first uh web page uh HTML um all these sorts of components

that were needed to build the worldwide web and then in the 25 years since that happened the worldwide web has exploded you know that's where we have Amazon and Facebook and all these other you know billions literally of websites now and uh but at the at the core of the the worldwide web it has um a challenge if someone take someone can take my file and use it and I don't hear about it they can even link to me and I don't even hear about it and this is because the worldwide web only has unidirectional links so it only points one way I can link to your web page but you don't know about that I'm linking to your web page unless you happen to be on my page and um so that's really kind of the core challenge um of of the world w

web it's these sort of very mindless links and it has no um sort of Rights Management built in now going to the Xanadu as You' mentioned um you know we've been digging more into this and whatnot and we we found that um there was a vision going back to 1960 a guy by the name of Ted Nelson um and he had this project called zanadu and in fact Ted Nelson coined the term hypertex um and zanadu was the original hypertext project and the vision was basically s um a a hypertext um place just like worldwide web you know where you have documents linking to documents but having Rights Management and attribution built in and uh his design was simply um

bir directional links rather than unidirectional links and that way so if you link to my web page I know about it directly because I have link back to you that's just built into the protocol and the second thing is copyright was built in baked in so um if I'm if I'm established as the copyright holder if you link to me then um and you start making money I'm going to have a trickle of dollars coming down to me as well so that was kind of an amazing Vision actually um and this goes back to the' 60s and you know Ted Nelson um you know after he had that Vision um he actually spent decades um working on it refining it and so on started a company in the ' 80s um to roll this out but it was really hard to build it was actually

pretty complicated and so when the worldw web came out in 1990 it kind of just took off so much more quickly because it was so simple and kind of left zanadu in the dust but the vision of zanadu this idea of of proper attribution and Rights Management built in um that's still an extremely worthy vision and we really love that Vision um you know that's basically where uh you know you look at all these different problems on the internet and it comes down to the fact that you know there isn't built-in attribution um you know throw a rock at a vertical and you you get a problem whether it's music Etc um and zanadu really was trying to address that right um there's this great quote from um from Ted Nelson HTML is precisely what we are trying to prevent

ever breaking links no right no Rights Management so anyway that that's the idea of zanadu U we think it's pretty cool and yeah others have tried to solve this since like you know for example like WordPress has pined back you know so there's been other Technologies uh developed proprietary or open source that enable this sort of like ability to see who's linking back to you but yeah having having that embedded into the core Technologies I I I guess would have been uh pretty useful and valuable yeah yeah no I agree uh for sure so how does that tie into uh your vision this this idea of B directional links right so

um directly actually so um you can kind of summarize what Zan is trying to do and what we're trying to do with um we we we say where's my stuff and you can break that down to the Wares and my stuff and the wearers has really um zanadu solved it with bidirectional links that are sort of like created automatically by the protocol on the fly when you create a new page and then the my stuff that zanadu had was baked in copyright so just sort of everything built into the system and there was these ideas of a bunch of things like transclusions and meta structures and so on that was the zanadu design um the with a scribe we're also boiling down the problem we're trying to solve as

where is my stuff but we're solving it slightly differently so um the wear's part rather than baking bir directional links into a protocol we're crawling the web so we're swallowing the web and then automatically Computing those bidirectional links for media and so I mean lots of you know several people have done this over the years several groups you know in 1998 Larry p in the shower and he asked what if I could swallow the internet and um it was that question that led to him devel him and Larry um sorry him and Sergey um developing the backr algorithm which evolved into Google and you know Google search itself is about you know understanding the links back and forth you know the page rank all that um they

were doing it for discovering content uh we're doing it for attribution and um it really ties to ownership much more directly and it's not about a web page per se it's actually about the media itself so that's the sort of Wares and the where's my stuff the other half the my stuff part is um two parts and I hinted at this in the beginning there is the easy legals and the secure legals so easy legals is a terms of service that has the copyright stuff built in so um when you register a piece of work you are claiming that you have the copyright rights when you transfer um ownership you are bestowing um a subset of those

copyright rights to the next buyer such that that buyer can resell um they can use it for um public display etc etc so uh so to summarize you know how we relate to zanadu is zanadu had this amazing amazing Vision to keep Rights Management um to solve the wars my stuff question we have the same aim but um with a scribe we're trying to do it in a much more sort of pragmatic way so we're not trying to force new protocols right now we're working with the existing Protocols of of the internet and then having the sort of overlay on top um sort of rewiring at the sort of the very top level to make it really pragmatic and of course you know it's still hard right I mean to swallow the internet and then to relate

that to content that's actually an internet scale machine learning problem but that's exactly what we're good at you know in a scribe there's a dozen of us um you know eight engineering and of the engineers five of us have been doing big data and machine learning for um a long time so I mean this also seems sort of a a a crazy uh ambitious project right and I think when you when you talked about that I was like is this really possible and and so with with Google right one of the things people often talk about is that if somebody try to build a you know better search engine than Google now it' be extremely difficult because of just that

enormous Ser infrastructure and expenses that they've had so like your startup cost would be huge and you know it's like of course still very risky are you able to be some build something better so can you guys really do that and and how how can you guys call the entire web and then uh find those uh links and attributions and I presume also it means you would have to you know account for different file types right or like let's say somebody has the same uh work image but in a different you know compressed versus not compressed like I mean you would have to recognize all those things so how is

that really possible yeah so um first of all I totally acknowledge that this is crazy ambitious I agree um and I also acknowledge that it's really hard um and we see though that um solving ownership on the Internet it's not an easy problem but it really is worth solving right it matters to the the future of the internet it matters for compensating creators um as well as for the the the consumers Etc so um yes it's ambitious yes it's hard but we're going for it and sort of as a team and a scribe we have the background to to actually go for it you know the problems that I was solving in my uh previous work we were actually looking at where we had 100 billion or even a trillion data points that we had to analyze in the span of 10 minutes or

or an hour um on a laptop and we were doing it and so and it's not just myself and the team you know there's other people on the team who have been doing really hard problems in semiconductors and um in other big data Realms so if you have the experience um and the audacity um then you really can go for it and we kind of have both so um to your question of of different file formats Etc um this isn't about just searching for the hash of the file because someone can change a single bit and then the hash is different so you can't go based on file names or hashes you actually have to do a Content based search right and um and then basically the content based search you have to do this for different media types you have to do it for images for for movies for

3D designs and so on um right now we're doing it for two types of media we're doing it for images and we're doing it for 3D files actually I think we might be the very first company in the world that's doing 3D file similarity search um and we'll be doing for more as we go along and uh so we're doing this and um really to you know we we have a given image we're comparing against when someone registers an image or they want to track what's going on we actually compare that against the reference database of images that we've crawled and you know depending how you count it depending sort of how deep in the web you go it could be 10 billion images it could be 500 billion and um this is possible thanks to Cloud infrastructure so we're using Amazon very heavily um

actually it's kind of funny uh Amazon um sort of tracked us down in Berlin and they're like who are you guys why are you using such a crazy amount of compute power you know like this tiny little startup in Berlin that's using more compute power than like super established startups like what's going on right but um you know this is possible now if you have you know you you leverage technology in the right way you have the um the right team to really pull it off um that's what we're doing and um I and it really you know it's not just you know sort of image search or media search it ties to ownership and this is really the key there's sort of this multiplicative value of when you actually combine those two things um because then you can start to ask questions like okay this is the file

that I own um when has it been used in the last month by others how many people have used it who's using it what value are people getting and those are really useful and then you can make a call yourself on what do you want to do about it right um do you want to just let go because you know verality is a proxy for value or maybe you want to um charge license fees or maybe you want to do a takedown request um you know but it's up to you and we're giving that power to the users the individuals and we think that's really powerful y so does that mean if I'm an artist and now I'm going to register my digital work of art or something on a scribe and at some point in the future you will provide like analytics services that where you can see yeah

what's happening with that where does that go yeah that's correct and it's in the very near future so we're actually already doing this for beta customers um businesses where um they are using our service um to um basically compare their content against what's out there on the internet and we will be rolling this into the web app for um individuals in the next two to six weeks um actually maybe sooner so yeah so a few months ago or a year ago or something I was approached by a very large publisher who were interested in uh DRM and and Publishing and whether the blockchain could be some help there and the interesting thing is that they weren't necessarily so much against the

idea of people sharing the content and being passed on because you know they had for example for the new newspapers they know that in average three people read them right so they they get passed on and family members or they're in a restaurant or something and then that's really valuable information for them to sell advertising and they they were like oh if this could happen in the digal realm that would be okay too right so if people pass it on but we need to know we need to have the analytics there and understand like where does it end up like what do people do with it in order to sell ads effectively so I guess this is sort of it ties in a bit there too know that you you might be able to provide some of that intelligence and then that's certainly really fascinating

uh definitely yeah um you know what we're doing um is it's really sort of procreator across the board so creators that are individuals who want to monetize individually but also um you know larger corporations that are proxies for creators to help that way you know journalists working for newspapers Etc and so we do work with um you know larger businesses as well to help them um to monitor the um for their content or other content um you know the ascribe solution um scales to that right so you know we're working with companies that have tens of millions of users I'm curious um so you mentioned a while ago about the data analysis that you were doing what uh are you using llang for

that uh I do love erlang but we are using python so okay um let's maybe get into some of the technical components uh of uh a scribe and maybe you can describe a spool sure so um spool is uh the protocol the blockchain overlay um for the transactions related to ownership so when we developed spool we actually looked around at all the different other sort of protocols that had been emerging that sit on top of the blockchain things like open assets and counterparty and all these and you know those are pretty cool we we like that we talked to some of those guys and um but they didn't have quite the feature sets that we needed and they didn't sort of address

the law in the way that we needed to address the law here so in the feature sets you know we wanted things like unique additions uh we want you know if you register um where you have 10 unique editions you need to be able to distinguish edition three from Edition four whereas these other protocols they would say okay I've got 10 eold right um but and you transfer three eold at a time but it doesn't matter which three in a sense and then we also wanted things like um loans Consignment um you know having someone else sell on your behalf unconsignment um rentals these sorts of things and so these these different features um the other protocols simply just didn't support those and when we looked sort of um if you merged our protocol with another one we looked at that as well there was very little overlap really

just sort of only the transfer part so we real we decided that we would just um have our own protocol called spool Secure Public online ownership Ledger um as a blockchain overlay and the specification is actually quite simple uh we've actually put it online onto GitHub um it's github.com ascribe spool and we put it in the the link in the show notes as well okay okay cool yeah and um so that's that's the general idea of sort of the features um and the main features are registering and trans um and transferring ownership um the other aspect though that sort of sets it apart from other protocols is that it's really not about transferring tokens that are sort of like a a coin that's colored or something it's really much more about

timestamping ownership transactions so it's much more saying I declare that I have this ownership now you know this is not law law is law the code is simply code um but it's code that could be used as evidence and a court of law so that's really what how we're leveraging the blockchain and um and then you know when you transfer ownership it goes from um you know one address that owns it so there's sort of an address that owns a given um addition say addition number of two or three so when you transfer there's a transaction where it's going from the existing input to a new input to a new um sort of address and um that's the transaction for transfering ownership and sort of as this goes along as you transfer from owner A to B to C

you have this sort of Providence that emerges naturally and it's really easy to look on a blockchain Explorer and stuff too so you can go to blockchain.info or whatever and see this chain of of transactions going from person a to person B to person C but all of this going back it's not about some sort of token that um gets passed along it's much more about recording actions that can be used as evidence in a court of law and actually as a really cool aside um the blockchain has already been used as evidence in a court of law maybe you guys heard uh Andreas Antonopoulos was telling me it was used on in the Silk Road trials actually um so I'm we're like thank you Silk Road um but it shouldn't really be surprising right

like hard drives have been used as evidence in courtrooms for you know decades so um something like the blockchain which is um you know even more even less hard to temper with should it should be obvious so we're happy about that go ahead sir so so then just to sum up how this works a scribe is sort of a certificate Authority then in that case uh there's a hash that's embedded in the blockchain for the proof of existence of this file for instance it could be like a picture or a 3D file and then for every addition you would you would have a transaction that is issued to um to the addition holder and then as they transfer that uh they're transferring ownership essentially yeah

exactly so as long as you have the private key you're the owner of this file exactly exactly so yeah so maybe I'll just describe to be very precise in that registration trans uh transaction the input is an ascribe address there are several outputs let's say you have three additions then the first output would be a hash of the file plus the title of the artist plus the the um title of the work the name of the artist the title of the work um the year and then uh you would have three outputs for each one output for each Edition um one output for Change and one output for uh an OP return which is like a verb saying register or transfer whatever so that's where the transaction looks like and yes

exactly like you said Sebastian um if you are if you have the private key to say the address of Edition two of three then by the by definition according to the terms of service um you are the owner of that piece of work and yeah so how does how does the loans loaning uh some an addition or a piece of artwork yeah well um so I mean when you're transferring ownership or loaning these are all about um bestowing or transferring a portion of copyright rights from person a to person B so a loan looks a lot like a transfer of ownership it's just um more copyright rights that are more limited in scope

um on the blockchain um the transaction is shaped very similarly so um you have the existing owner um of of the rights and then to alone you're basically you have Satoshi flowing from um the existing owning address to um a new address where they're getting the loan um and there is also change and there's also an OP return that has the verb of loan so so so but does that mean I mean somehow it has to go back to the rights owner right if you loan it and I guess I mean ideally you would not have to rely on the person who is loaning the art to send it back to you if a transaction

ideally you could say like I loan it to you for three months and then at that stage it automatically yeah gets sent back to me does that work like that or yeah you're exactly right and it's precisely because we're not relying on it's not you know coins that have to flow back and forth this is all time stamps of action right so inside the oper turn it says loan but it also says the start date and the end date of the loan right because it's really once again um documenting um uh a contract that has already been signed um that they've already agreed to so um it's not about if someone steals a private key and runs with it you know you're kind of messed up it's not that at all it's simply um used as a way to document um these different transactions related to ownership so does that mean

for example you could also restrict then what the the person does that loans the object for example could you say you allowed to loan it on or not or is there some granularity you have there uh so right now um we have sort of good defaults um so typically it's going from an existing rights holder um someone who has an addition or the artist to um a single entity and they don't have the right to reloan just how our sort of default contract is however we've already began doing custom contracts for people that like to use us uh one of our customers for example um they yeah they they're using it uh I won't get into detail but um and in general you know why not have custom contracts for the

businesses or the individuals that want it right and as time goes on too we'll we'll start with good defaults but we'll also make it easy to sort of switch the contracts just like you know with Creative Commons you can go to Creative Commons and choose one of a few contracts in the sort of easy to use fashion we kind of see that with us [Music] too today's magic word is ownership o w n r sh sh i p go to let's talk bitcoin.com to sign in enter the magic word and claim your part of the listener [Music] reward so spool is the open source protocol that makes all this happen a scribe is the the for-profit company

that is uh creating this protocol and uh maintaining it right yep um can you talk about the broader like full Tex stack of what a scribe is uh going to be offering uh sure and so um just as an um addendum to the spool staff um in the next month we will be open- sourcing the reference implementation of spool and python as well so and we've actually been having chats with other people in the Bitcoin Community um about using the school protocol themselves for um ownership uh I mean it's sort of a complimentary prot to the other protocols out there but it's you know it's it stands on its own it's useful so okay so I'm going to talk

about the text tack here um there's I'll start at the top there's two ways you can interact with a scribe um there's if with the web app directly so if you go to ascribe doio um click sign up then you can enter your email and um a password and then you're in and then you can register work transfer ownership all of that it's really designed to be simple um incidentally by the way too when you're using it it um you don't have to know about Bitcoin at all we provide some details down at the bottom but um there's Bitcoin being transaction transacted you don't have to worry about it um then the other way that people can interact with a scribe is uh via our API so this is typically for marketplaces or um galleries with higher throughput um

these sorts of places and so they just use our API so both the marketplaces and our own web app consume uh this rest API um it's a you know standard restful API will be making that um public shortly too and that is being served up by our scribe servers and then the servers themselves they kind of have um three pillars that they're kind of um doing under the hood and um so uh pillar one is um and it all relates to answering this question where's my stuff um you know the wear's part and the my stuff part so on the wear's part um in order to uh we do the automatic discovery of bidirectional links and that comes down to um the web craw and then the machine

learning similarity search and of course um it's accessing this database This Global database or file system whatever you want to call it called the internet um so that's one part of the stack the other two parts um that the ascribe ownership servers are talking about one of them is the terms of service um which we actually take very very seriously we've gone way over way to do a good job on this working with lawyers on multiple continents and in fact um even though we have a small team we already have a full-time lawyer who has has lived and breathed copyright law the last 10 years um and he really really cares about this stuff about copyright about privacy all of these things um actually his last gig was um doing a class action lawsuit on

behalf of Canadians to Facebook for mucking around with um Canadians privacy so um you know he's he's really fantastic we're very happy about that um the third thing that the servers are sort of um serving up besides the web call and the terms of service is um they're wrapping the the blockchain stuff so there's sort of three pieces of that stack um there's the the the spool which is the the Bitcoin overlay um and then that is you can think of it like a dialect of the Bitcoin protocol itself which of course is the API for the blockchain itself so that's sort of the overall Tech stack um you know as far as users are concerned um there's really two ways they can interact right there's the the web app and the API the web app

is really for individual creators you know artists graphic designers photographers writers musicians and in that you know they can register their work consign it and archive you know we'll store um those files on on the cloud for free they don't have to worry about that and individual galleries can use this too you know for Consignment and collectors as well so you can think of it as your sort of digital wallet of your digital art or your 3D files whatever um the rest API is really targeted towards marketplaces and there's actually sort of two benefits for them there's answering the where's my stuff question for the eles um and as well for their users you know they can pass that information to the users to say Hey you know this is how much your stuff has been shared so uh yeah that

kind of and then the third um sort of you can call it an interface if you will is the spool protocol itself right which uh like I've mentioned yeah we've we've open sourced it we've made we've gone out of a way to make it simple um and it's really about the um the transactions um recording the transactions such that if there's ever a dispute over ownership you've got extra evidence for law it's a really intricate system I mean it's um it's you seem to have quite a few pieces there I guess that's the value that you're that you're providing is having all those pieces together uh I I I suppose anybody can use this protocol to build um similar business models yeah and we encourage people to do so

actually um you know uh I think it would be difficult to build a company where you're just hashing a file to the blockchain right um you know high school kids can do that our initial prototype was you know sort of um that that tiny and it was you know straightforward to do sort of a weekend project right so um but it's really all this extra value that we provide the web craw stuff get it giving that visibility um and reconciling this idea of hashing to the file with actual copyright law you know with with the realities of the world and not just you know a copyright license but you know being there um coming to bat with um you know the legals to back it up with the resources to back it up and so on so it really is about an

overall solution for for ownership you know another way to think of what is is you can think of PayPal or stripe as payment processing think of us as ownership processing so let's talk a little bit about some of the the concrete projects you've been up to I mean there's a few times you mentioned to me uh the website coin temporary which I think is really cool uh yeah sure so coint temporary is um a website it's an um and an art gallery that every 10 days they sell a new piece of work uh piece of artwor and um it's run by a couple artists um in Vienna Valentine Rory and Andy Boot and the only way you can buy it is with

Bitcoin so here's an example where you can go online and you can spend Bitcoin and buy art now up till recently they had been um selling physical art but um we partnered with them and are now selling digital art as well so um the first um round of digital art they started about 2 weeks ago selling uh 50 editions of some work from Valentine and this past week um they've actually been selling work from a quite well-known artist named um harm venoro uh and it's actually a screen saver but you know that's digital art and so that's been um you know pretty cool we've been pretty excited about that um the guys have been fantastic to work with and uh actually another sort of really cool um aside related is um

these additions that of harms work um that are being sold right now um Mac Vienna which is a 150y old Art institution um for uh including Contemporary Art um they actually bought um copies of additions of Harm's work so we actually have seen instances of blockchain ascribed work being bought by these Major Art institutions already so it's happening right it's pretty exciting people have been dreaming and talking about you know blockchain and art for a while you know we've been talking about it almost 2 years actually and it's happening now right um with successes like mac and with coin temporary and so on we're just really happy to be a part of this and to help

you know bring proper digital ownership to the art world so where do you see this going in the next 12 months or like let's say one to two years yeah so um right now we're spending a lot of um uh energy um in serving the art world so we're working with a lot of digital artists and Galleries and um other large larger art institutions museums galleries um Gallery management software these sorts of companies um for digital art and actually interestingly some have approached us and we're helping them on physical art as well um it turns out that having really you know better Providence for physical art can count for a lot as well and on the side by the way we do um certificate of authenticity

that's cryptographic so a cryptographic COA and um collectors really like that so that's where what we've been doing but also we've been working with marketplaces and individuals for photography and for 3D design where they also have these challenges um and quite often they start with one challenge like oh I don't have visibility into what's going on but um once they start working with us they realize oh wow this ownership thing is really awesome give give it all to me right I want it all so we're working with sort of these three initial verticals and really proving it out um with Revenue actually which is kind of exciting for us as a company um and uh we're going to be really you know driving that but as we go forward we're going to be expanding to other verticals as well um but really ELO sort of art as

our core as a sort of heart and soul which really fits for Berlin too Berlin is a company that is Art Plus Tech um so solving a problem that is at the intersection of Art Plus Tech is really exciting to us um and you know a scribe is kind of like that now going Beyond though we see that you know as we go um address vertical to vertical and really build mind chare there um and usage then you know you co as you cover the verticals you start to um address um all the different media types in the web all the different pain points in the web so fast forward you know one year five years 10 years we see that you know we're already internet scale but we see that we become sort of this horizontal layer um for the internet really an

ownership layer for the internet just like Facebook started out as a site for Harvard students to like you know connect with each other and and poke each other but it grew to basically being this very horizontal social layer for the internet uh we kind of see ourselves similar we're we're starting out solving some very specific pain points and certain verticals but growing serving needs of users of creators to ultimately become this this very horizontal ownership layer and um we think that's really awesome because um the internet needs it it's a hard problem the internet needs it and we're working with people who have been architects of the internet to actually deploy this we'll be announcing some of those names uh in the next few weeks

actually can't can't tell you now but we'll say soon so that's kind of the vision it's it maybe you can clear this up for me it's unclear to me how if if a scribe Grows Right and and you become sort of a an authority um to uh for for uh for copyright uh and ownership rights online how how do we avoid getting into another situation where we have these large authorities that essentially have the Monopoly on the market uh much like certificate authorities have now yeah so um talking about it being horizontal how do it

horizontal and how does it does how how how does it protect the interests of artists right for sure so um I guess those are two questions what about the the concern about um centralization of an authority and then protecting the interest of creators so right now in the register transaction we are um sort of acting as an authority but anyone else can also you know run the spool protocol and um they can be the issuing address and we're actually working with marketplaces where they want to also be an issuing addresss and so are we're evolving our protocol to support that um but it's it's always useful to know that there's a trusted point of origin so we're not trying to lock down ourselves

per se um because um that that kind of goes against the vision of of you know decentralization and cre create supporting creators and all of that you know we can provide a lot of value that we there's no need for us to lock that down right um and then the question of like you know serving creators um so in a scbe we we talk a lot about our values as a company you know we're wildly ambitious but we also have to be cognizant our number one value in inscribe is creators first so we're probably going to run up against you know people who don't like that you know collectors saying hey I really want to serve my needs but you know what they've had a pretty good run with piracy and we want to see you know we want to reduce the number of stories we hear about poor

Starving Artists who are creating great work who people are stealing their stuff and you know we just want to see them get compensated whether it's via additions whether it's via tipping whether it's via streaming you know a scribe service will support all of those um it's really about getting the the creators properly compensated for what they do cool well I think this is a great uh a great note to end on and it's certainly an awesome and extremely audacious Vision you guys are pursuing but I mean I think it's it's very exciting and I think we we will be following closely where is All Leads and what it can do to the internet and just sort of our experience with digital content in the future so uh

yeah super excited about what you guys are doing and thanks so much for coming on to today to discuss it with us thank you very much it's really my pleasure thanks for the great questions okay well we'll have links for all the interesting readings from school protocol to the Scribe website contempor Etc in the show notes H and to listeners thanks so much for listening you can follow us on Twitter with epicenter BTC and we'll be back next week thanks and I'll see you then [Music] in five 4

3 hello welcome to ep one second one second one second Trent how do we pronounce your last name it's m here MC coni m yeah MCC MC okay kind of like Matthew MCC except pronounced correctly yeah con okay all right go to this all right so the only way that I can actually get a movie that's English that's new release is if I VPN or or torent it and I don't want to be a pirate so that's really a problem this

pirate trend she's come up with Jerry this this is going to be the new look for the 9s you're going to be the first pirate but I don't want to be a pirate so to answer your question there was sort of two questions there um can you have scarcity in digital and uh what about the idea of property and digital at all and this idea of property and digital at all it actually goes back to um the very idea of intellectual property if you think about the word intellectual property intellectual means ideas and property means