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A Philosophy of Blockchain: Is Secrecy a Danger?

A Philosophy of Blockchain: Is Secrecy a Danger?

A Philosophy of Blockchain: Is Secrecy a Danger?

Proof of stake could endanger the equality of the blockchain and hidden centralizations could endanger its trustlessness. However, there’s another innovation that may endanger both…

written by Shannon Appelcline

Upon inventing Bitcoin, Satoshi Nakamoto created an open ledger that anyone could write to as long as they followed the consensus rules. This design revealed two crucial elements of blockchain design. First, it declared the equality of the blockchain: anyone could see anything on the blockchain thanks to its permissionless design; and anyone could add any valid transaction to the blockchain thanks to its censorship resistance. Second, it demonstrated the trustlessness of the blockchain: anyone could verify that both the blocks and their transactions were validly constructed.

But the founding principles of a community are constantly endangered as it grows and evolves. As we’ve written in past philosophy articles, we feel that proof of stake could endanger the equality of the blockchain and that hidden centralizations could endanger its trustlessness. However, there’s another innovation that may endanger both: secrecy.

A Confidential Possibility

There has been a bit of secrecy in Bitcoin from the start, as Satoshi Nakamoto states in the original paper: “The necessity to announce all transactions publicly precludes [traditional privacy, which limits information about an exchange to the parties involved and a trusted third party], but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous.”

from Satoshi Nakamoto’s paper. https://bitcoin.org/bitcoin.pdf

However, the blockchain is not truly anonymous. At best, it’s pseudonymous and even that’s quite fragile. It depends on strict key hygiene, where everyone constantly creates new keys, and even then there’s the danger of correlation if someone can detect clusters of addresses and connect any of them to a real-world identity.

The quest for privacy beyond Nakamoto’s pseudonymity has loomed large as Bitcoin has matured. In 2013, Greg Maxwell proposed CoinJoin as one of the first solutions; it simply mixed together bitcoins, making it harder to correlate them. That same year Adam Back detailed “bitcoins with homomorphic value”, which would eventually become the Confidential Transactions of Blockstream’s Elements Project. Back took a different tack by blinding the contents of a transaction, so that people outside the transaction could only see that it occurred (and what the mining fee was). The fact that later non-Confidential Transactions could leak information about previous Confidential Transactions is probably what led to the creation of fully privacy oriented blockchains, such as Monero in 2014 and Zcash in 2016, each of which took different approaches to secrecy.

Obviously, there is interest in increased blockchain privacy: it’s been one of the driving forces for cryptocurrency adoption. This transactional secrecy has a variety of advantages, the most crucial of which is fungibility: with true privacy, it becomes impossible to trace the provenance of an individual transaction, which is crucial for working currency; without it, the cryptocurrrency in individual transactions could be censored if the network did not like who used it or how it we used.

However, we must balance this growing philosophical desire for complete secrecy with the philosophies that have been a developed part of the blockchain from the start. Secrecy may actually enhance some of the blockchain’s core ideals, such as its censorship resistance. And, it doesn’t hurt others, such the blockchain’s trustlessness: protocols like Blockstream’s Confidential Transactions were explicitly designed to balance out the inputs and outputs of a transactions, allowing verification by anyone.

But that’s not to say that secrecy doesn’t have problems of its own.

The Dangers of Cryptocurrency Secrecy

One of the original goals of Bitcoin (and other cryptocurrencies) was to give power back to the people. In the physical world, we’ve lost agency to corporations, government, and plutocrats. The blockchain gave that back to us in part due to its transparency. It suddenly became possible to require that transactions of public entities be public in a way that we never could have considered in traditional financial systems. We could require that proxies publicly reveal their votes, that elected officials detail their contributions, and that corporations declare transactions related to their advertisements, their guarantees, and their certifications — and many of these revelations could be verified through the blockchain itself.

But now, as a shroud of secrecy is spreading across blockchains, expectations of transparency are rapidly fading. If cryptocurrency becomes as opaque as traditional currency, then the opportunity to demand transparency, to truly change the rules of the game, will evaporate.

Confidential transactions and privacy-protecting digital currencies are being advertised as a way for us to have privacy, but it’s them, the rich and the powerful, who will make the greatest use of this power. We already see this in the opaque finances of the physical world, at places like Deutsche Bank, which is facing legal action as the result of laundering twenty billion dollars of Russian money. If the transparency of the blockchain becomes opaque, it’ll happen there too. The rich and the powerful will hide their transactions so that they can maintain the influence and authority they’ve gathered in the physical world and extend it to the digital world — using the very tool that’s supposed to reverse those trends.

In addition, secrecy may turn cryptocurrencies into what people fear. There has long been concern over criminal uses of the blockchain but the transparency and pseudonymity of most blockchains have worked against that — and in fact have made criminals vulnerable when they mistakenly thought they were safe. Cryptocurrrency secrecy could let them in.

Secrecy may turn cryptocurrencies into what people fear. Photo by Julius Drost on Unsplash

Perhaps we, as a blockchain community, will assess these costs as acceptable given the privacy gains for the common person. Or perhaps not. But the problems become even greater when moving from cryptocurrency to the wider world of digital assets, a topic that’s dear to us at Bitmark.

The Dangers of Digital Asset Secrecy

Bitmark defines and defends digital property through the Bitmark Property System, which allows people to register their digital assets and data, then to license, sell, loan, or otherwise leverage that digital property for the good of both themselves and our society. KKBOX’s use of the Bitmark blockchain to record royalties for the use of digital music shows how this system can help individual musicians, while UC Berkeley and Pfizer have demonstrated the benefits of recording health data permissions to support health studies and clinical trials that could contribute to the whole world. But for digital assets to have value, it’s vitally important that ownership records be public, not secret.

Last year we wrote about the case of Shepard Fairey, whose famous “Hope” stencil portrait of Barack Obama became the source of a legal dispute because Fairey didn’t license the original photographic source. That case study demonstrates our need to know who owns something so that we can license it (or purchase it or borrow it): secrecy works against the interests of both asset holders and hopeful licensees. The music industry offers another use case: rights information should be stored in electronic data, but it’s often wrong, which has left artists unable to collect billions of dollars in royalties.

This problem of determining asset ownership is so large that it became a major focus of the US Copyright Office in the ’00s. As corporations like Google tried to turn physical assets into digital assets, they ran into a major problem with “orphan works”, where they couldn’t discover who the rights-holder for an asset was, and so were unable to attain permission (or refusal) to use the work. The Copyright Office was thus tasked with determining whether these orphaned works still served to “promote the progress of Science”, one of the major purposes for copyright in the United States. Their conclusion was:

“Both the use of individual orphan works and mass digitization offer considerable opportunities for the diffusion of creativity and learning. Too often, however, the public is deprived of the full benefit of such uses, not because rightsholders and users cannot agree to terms, but because a lack of information or inefficiencies in the licensing process prevent such negotiations from occurring in the first place. As countries around the world are increasingly recognizing, these obstacles to clearance are highly detrimental to a well-functioning copyright system in the twenty-first century. The Office thus agrees that a solution for the United States is ‘desperately need[ed]’ …”

In other words, the US Copyright Office recognized that society and its institutions needed to be able to discover both the attributes and ownership of assets, so that it could better itself and reach its full potential.

As corporations like Google tried to turn physical assets into digital assets, they ran into a major problem with “orphan works”. Photo by Amanda Jones on Unsplash

Obviously, having ownership information easily available could have helped Shepard Fairey and Google, who each wanted to reuse existing assets. It could have helped musicians, who desired to receive payments for their music. But it goes far beyond that and far beyond these cases of accidental secrecy. By knowing who owns resources, a society can find those resources when it needs them — whether it be iron ore required for construction or health data needed to solve a medical problem. By knowing who owns items, a society can contact the owners of those items — perhaps because those items are surprisingly dangerous (due to a recall) or perhaps because they’re surprisingly valuable (due to a need). Finally, as the US Copyright Office noted, registration of ownership can allow negotiation, a necessary element to resolve negative externalities related to a marketplace, as discussed in Coase Theorem. Having purposeful secrecy would directly contradict all of these use cases, which is why it’s even more problematic for digital assets than for simple cryptocurrency.

The US Copyright Office suggested legalistic methods to solve this problem. But there’s another, better solution, one that can avoid works being orphaned or misplaced in the first place: technology. It’s the solution offered by the Bitmark Property System, which organizes and codifies the ownership of digital assets on a property rights blockchain for the good of both the rights holders and our society. By maintaining these deeds in the public eye, not in secrecy, we can enable all of these use cases: Fairey’s artistic reimagination of a photo, Google’s digitization of classic works, and our society’s ability to locate, recall, or purchase items of importance.

Conclusion

Many people laud the privacy of the blockchain, something that was possible once upon a time when transactions depended on cash in the physical world, but which is becoming increasingly difficult in a world of electronic banking on the internet.

But, we should be aware that secrecy of this sort has very real consequences. Some people might value their privacy enough to empower the plutocratic powers of the physical world in cyberspace, though we think there’s real weight to both sides of the argument. But when we delve into the wider world of digital assets, we think this position becomes increasingly dangerous.

Which is why the Bitmark Property System is open and transparent, just as Bitcoin was in its original design.

Further Reading

Alt, Casey, Sean Moss-Pultz, Amy Whitaker, & Timothy Chen. November 2016. “Defining Property in the Digital Environment”.
Bitmark_defining-property-dig-env.pdf.

Bitmark. Retrieved July 2019. “Why Property Rights Matter”. Bitmark. https://bitmark.com/en/property-blockchain/why-property-rights-matter.

Bitmark. October 2018. “How to Use the Blockchain to Riff Artwork, Sell PDFs, and Otherwise Gain Economic Control of Your…” Hackernoon. https://hackernoon.com/bitmark-how-to-use-the-blockchain-for-property-rights-ecf9f5e67e77.

Blockstream. Retrieved 2019. “Elements by Blockstream”. The Elements Project. https://elementsproject.org/.

Deahl, Dani. May 2019. “Metadata is the Biggest Little Problem Plaguing the Music Industry”. The Verge. https://www.theverge.com/2019/5/29/18531476/music-industry-song-royalties-metadata-credit-problems.

Hsiang-Yun L. February 2019. “Coase Theorem in the World of Data Breaches”. Human Rights at the Digital Age. https://techandrights.tech.blog/2019/02/22/coase-theorem-in-the-world-of-data-breaches/.

Maxwell, Greg. August 2013. “CoinJoin: Bitcoin Privacy for the Real World”. Bitcoin Talk. https://bitcointalk.org/index.php?topic=279249.0.

Nakamoto, Satoshi. October 2008. “Bitcoin: A Peer-to-Peer Electronic Cash System”. https://bitcoin.org/bitcoin.pdf.

Poelstra, Andrew, Adam Back, Mark Friedenbach, Gregory Maxwell, and Pieter Wuille. 2017. “Confidential Assets.” Blockstream. https://blockstream.com/bitcoin17-final41.pdf.

US Copyright Office. June 2015. “Orphan Works and Mass Digitization”. Copyright.gov. https://www.copyright.gov/orphan/reports/orphan-works2015.pdf.

Van Wirdum, Aaron. November 2015. “Is Bitcoin Anonymous? A Complete Beginner’s Guide”. Bitcoin Magazine. https://bitcoinmagazine.com/articles/is-bitcoin-anonymous-a-complete-beginner-s-guide-1447875283.

Van Wirdum, Aaron. June 2016. “Confidential Transactions: How Hiding Transaction Amounts Increases Bitcoin Privacy”. Bitcoin Magazine. https://bitcoinmagazine.com/articles/confidential-transactions-how-hiding-transaction-amounts-increases-bitcoin-privacy-1464892525.

By Bitmark Inc. on August 29, 2019.
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The Emergence of Blockchain in Taiwan

The Emergence of Blockchain in Taiwan

Amazon Alexa, self-driving vehicles, and robotics. These are all widely known technologies available to the general public which utilize hardware, but rely heavily on software that is programmed into it in order to function. As many are able to perceive, technology is shifting towards a software-based environment. Namely in Taiwan, one of the world leaders in hardware manufacturing, technology leaders see opportunities beyond hardware. A specific area of interest in Taiwan is blockchain technology, which is a public ledger utilizing a peer to peer, decentralized structure. As of now, we put a lot of trust into a third party such as banks, retailers, and corporations to keep our private information safe (which isn’t always reliable). Blockchain is a clever technology whose versatility is becoming increasingly apparent to the Taiwanese government. With blockchain, transactions are recorded in a public ledger and verified by none other than the users themselves, allowing the transfer of cryptocurrency and other data in a decentralized structure. Due to its almost guaranteed security and its easy traceability of irregularities, it’s not hard to think of the many possibilities for practical application that blockchain can provide — recording information such as healthcare data, tracking natural resources, and removing the need for an intermediary to name a few. Various Taiwanese businesses, institutions, and the government have begun to utilize blockchain technology in order to benefit citizens.

Taiwan has traditionally been a very hardware-focused country in its technology sector due to cheap labor costs and a high marginal profit. Sharp, HTC, and Acer are some of its most prominent names. Recently, however, Taiwan has been working towards integrating software as well, such as IOT, software development, and blockchain. Led by Jason Hsu, a legislator who is known to be a strong advocate of blockchain technology, the Taiwan Parliamentary Coalition for Blockchain was founded to push blockchain projects through legislation. Before, the Taiwanese government adopted a “hands-off” approach to blockchain technology — it neither supported nor prohibited it. In recent years however, authorities are becoming increasingly aware of its capabilities and have announced its support to turn Taiwan into a global blockchain nation. Due to various projects which have proved the usefulness of blockchain, its advantages and improvements in the public sector are clearly recognized by the government.

Some of these projects include a blockchain-based payment system which greatly reduces transaction costs and a virtual ID card that prevents identity theft. As a Taiwanese citizen, the impacts of having blockchain integrated in the public sector are very visible. For example, a blockchain-based payment system running on Ethereum has already been implemented near National Chengchi University, used by restaurants and merchants. Since its implementation, the number of transactions in this area has increased fourfold, showing how well its improved merchant sales. There are plenty of reasons for this — decreased transaction costs, elimination of intermediaries, and increased profit that follow. Because of the Byzantine Fault Tolerant consensus protocol that allows two nodes to communicate safely through a network, if a consumer were to pay for something through this system, the transaction times would be cut to less than a second. It would also greatly improve the efficiency and security for the average Taiwanese merchant because of the blockchain structure: transactions are easily verifiable and located on the public ledger, with little doubt of fraud. Due to its low cost for each transaction, merchants forgo extra payments to banks and corporations, allowing more profit to be made.

Another project aimed to integrate blockchain in the public sector and therefore improving the security of Taiwanese citizens’ data is “TangleID”. Think of it as a “Digital Citizen Card” that stores important health data, personal information, and other identification. Identity theft is always a risk when dealing with traditional public ledgers of data. Data leaks, criminal activity, and other threats can all compromise one’s personal data and identity. Yahoo is infamous for a data leak which compromised three billion user accounts. eBay has had a similar crisis in 2014, in which 145 million users’ names, addresses, birthdays, and passwords were all exposed. By utilizing the security of a blockchain ledger and its decentralized nodes, the risk of data being leaked intentionally or unintentionally from a third party is eliminated without an intermediary needed. This is the main basis of TangleID’s security. This way, citizens will be able to rest assured that identity theft as well as voter fraud will be eliminated.

One application that would be especially useful in Taiwan would be using blockchain to track natural resources. Although Taiwan has been going through a very rapid industrialization for the past decades, the environmental costs of doing so is enormous and often times shrugged off in the name of advancement. A blockchain could be used in this situation to track where resources are going towards and how much is being used. By using a blockchain and a “transactive grid” to track energy usage, businesses and the government would be able to easily query where energy is being sourced from and how much is being used. The fact that adding anything onto a blockchain is a immutable record and its low transaction costs make this a very efficient implementation.

Through the multitude of projects that are already in the works, it is very visible that blockchain can have an enormous impact in the public sector, improving Taiwanese citizens’ lives in many aspects. The unique security that comes with utilizing a blockchain structure, its fast transaction times, and low costs can be integrated in a number of creative ways. Jason Hsu hopes to continue this momentum of innovation and change with blockchain. As one of the writers of the “Financial Technology Innovation Experimentation Act” passed in Taiwan, Hsu constantly rallies for legislation supporting blockchain and cryptocurrency. With the pro-blockchain environment in Taiwan, new projects that may be in the works will utilize this technology and be a driver for next generation’s innovation, benefitting citizens and the government alike.

By Kenneth Lee on October 12, 2018.
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Finding Satoshi… And A New Way To Finance Film

Finding Satoshi… And A New Way To Finance Film

Jamie King is the founder of Totemic, a recently launched platform that lets creators issue digital collectibles around their work — and fans to support them. Jamie is an experienced crowdfunder, having created one of the first free-to-share, crowdfunded films, STEAL THIS FILM (2006–2009) and VODO, a pioneering platform in crowdfunded, P2P-distributed film. This article explains how Totemic could become a significant force in the crowdfunding space via the perspectives of experienced filmmaker, crowdfunder, and one of Totemic’s first creators, Emily James.

Finding Satoshi isa hybrid documentary/fiction film set in the world of Bitcoin and cryptocurrency. It follows a detective hired to hunt down Satoshi Nakamoto, Bitcoin’s pseudonymous inventor. As the detective’s quest takes him on a tour of crypto’s key protagonists, the pursuit of Satoshi’s identity leads him deep into the roots and identity of cryptocurrency itself. The search for Satoshi becomes a way to examine crypto and how it is changing the world around us.

The film’s detective, Jimmy, stalks London for leads.

The film, which is currently in development, has a lot going for it. Not only is its topic incredibly current and urgent, but its director, Emily James, is an experienced documentarian with award-winning films and large TV commissions under her belt. Yet even for an established filmmaker like Emily, raising money can be daunting in the fast-moving, highly uncertain film industry.

The Funding Maze

“Funders often want to see nearly a full rough cut before they’ll jump in. The creators of the film have to carry a great deal of the financial risk themselves…”

“In documentary,” Emily explains, “the majority of funding comes from TV commissions — and now platforms like Netflix. And often commissioners want to see quite a lot before they’ll commit any financing — in fiction a script is key; in documentary they will often want to see nearly a full rough cut. Often the creators of the film have to carry a great deal of the financial risk themselves in order to get the project far enough along for others to finally jump in.”

Enter crowdfunding. The crowd (that’s you and me) have proved to be way less risk-adverse than traditional funders, and provide a kind of moral and financial support commercial financers can’t. Platforms like Kickstarter, Indiegogo and the film-specific Seed & Spark have made it possible for less established film makers to go direct to potential audiences with their ideas, raising funding for films that otherwise wouldn’t get made.

“Industry money is dragging its feet even more, as it’s now almost expected that a film will ‘prove its audience’ by raising some funds from the crowd.”

But many filmmakers are starting to feel the crowdfunding pinch: it’s getting harder and harder to raise money as the novelty wares off, and a new problem has been created— industry money now tends to drag its feet even more, with expectations that a film will ‘prove its audience’ by raising funds from fans and audience.

Is that… Satoshi I see?

Crowdfunding: The Current Model

To date the main model for crowfunding has been incentivised donations, which are paid by the audience at a variety of levels in return for a designated perk or reward. For example, a fan could fund $20, $50, or $200 and in return receive posters, a place in the credits or a special edition of the film — though the latter can, in practice, be problematic for distributors. Emily’s Film Just Do It, for which over half of the budget raised came from donations in three rounds of funding appeals, is a good example of this approach.

Trouble In Paradise

The perk system, it could be argued, is a flimsy way of rewarding early backers who are really motivate by something more substantial: a sense of protagonism, of an incorporation in the filmmaking process, conferred by being an early believer and investor. This does beg the question of the possibility of incentives that are equal to the risk of investing so early in a film’s life.

There’s a reason micro-financing never took off. The legalities of accepting investments can be sketchy at best — and the only safe route is to limit fundraising to so-called ‘sophisticated’ (read: wealthy) investors who understand, and can bear, the risks involved.

Some approaches have tried to align rewards with risk, especially early on in the history of crowdfunding. Franny Armstrong’s The Age of Stupid, which Emily produced and was an early pioneer in crowdfunding, pioneered a micro-financing system in which each investor owned a little piece of the ‘back end’ profits of the film, rather than donating and merely getting perks. Clearly, if The Age Of Stupid could deliver profits as well as perks, that might galvanise investors who weren’t ‘superfans’ and for whom perks alone wouldn’t swing it.

There’s a reason that model never took off. In many countries the legalities of accepting investments remain sketchy — and in practice, the only safe route would be to limit fundraising to so-called ‘sophisticated’ (read: wealthy) investors who understand, and can bear, the risks involved.

This somewhat defeats the point of the ‘crowd’ part of the crowdfunding. It’s true that the passage of the JOBS Act has, at least in the US, opened private investments into indie film to investors with a lower net worth — but there’s another (and perhaps bigger) problem for films raising funding. It’s kind of an open secret amongst indie filmmakers: the vast majority of the films out there, even some of the ones you may have seen or heard of, don’t wind up turning a profit. Indie films run on a shoestring, often with the majority of the team deferring much or all of their payment until when (or if — and that’s a big if) a film is sold. Any profits may come only after everyone gets paid, and marketing and other expenses can eat into returns investors were expecting. “It’s true indie films often don’t make much money,” Emily admits, “and when they do hit the ball out of the park, the people who made it (or the crowd who invested) don’t necessarily see as much of that money as you might think. Sales agents and distributors can often take over half of gross revenue off the top, before it even starts to trickle back down. People who invest in films have to understand it’s a very risky investment indeed, and be motivated by something other than hope for large returns on their investment.”

Totemic: The Middle Way?

Could there be a ‘middle way’ for crowdfunding film? A way in which filmmakers can fund their work, and funders receive not only feel-good perks, but incentives tied to the value of that work, without getting tangled up in messy equity and financing thickets? We think so, and our new platform Totemic is setting out to prove it.

Totemic offers a simple, accessible means for creators to issue collectible assets (which can be thematically aligned with their work, or totally separate) and then purchased by audiences and fans in a similar way to the perks of other crowdfunding platforms. You can think of these assets as the digital equivalent of baseball cards, in provably limited edition, and with a provenance guaranteed by the Bitmark blockchain.

From Emily James’ first set, ‘Finding Satoshi’. Each card represents a potential candidate for the real Satoshi Nakamoto.

For a physical world analogue, consider buying a numbered photographic print from a gallerist. While anyone wanting that image could very well scan and reproduce it themselves, what the gallerist is guaranteeing is access to one of a limited number of authorisednumbered copies. In effect, it’s the deed of title to the asset which is being purchased; a deed which confers an indirect relationship with the artist and guarantees provenance, producing a tradeable asset with real value.

Totemic’s collectibles have two key functions: first, they let fans collect work from creators they enjoy, by acquiring the creators’ cards. Being limited edition, if a creator’s reputation increases, the value of the cards could behave similarly. If I acquire Emily’s Finding Satoshi set, for example (which I have, except for those damn Rares… just haven’t got lucky yet!), then if her film does well, I can expect the value of the collectibles to go up. The renown of the film and its creator increases demand for the associated collectibles, which are in limited supply. Perhaps I will collect two sets of Finding Satoshi cards, hoping to sell the other one in the marketplace at such a moment.

Balancing Self Interest & Patronage

Without having an equity stake in a creator’s work, acquiring Totemic collectibles confer similar benefits — and remain outside the difficult film distribution business.

This is a new approach to crowdfunding, balancing self-interest with patronage: as with other platforms, backers benefit from the feel-good factor, (supporting Emily and her film) and also from any perks the creator might offer for holding her cards — invitations to screenings, behind-the-scenes access and so on. But they also enjoy a new, speculative relation to the creator and her work through holding the collectibles — similar, indeed, to that of wealthy art collectors and the artists they collect. When a collected artist gets a significant show, or some other cultural event occurs around them, all the works they’ve sold may well increase in price. Without having an equity stake in that artist, buying their work essentially confers similar benefits.

There are clear advantages to this approach. For film investors in Emily’s film, for example, it means holding assets which stay cleanly outside the thorny film distribution business. Even if the film turns no profit, these collectible assets may well rise in price. And this is achieved without Emily promising any equity stake in her film — leaving her deals with traditional financiers unencumbered. Nor has she promised her crowdfunders advance or special access copies of the final film, which can annoy distributors and make deals difficult to do in practice.

Emily, one of the first creators to try out the Totemic platform, agrees on the potential here. “Digital collectibles could be a great way to crowdfund. It adds real value for the backers. In traditional crowd-funding of films you are always trying to come up with ‘perks’ that will encourage people to give larger sums, but you have to be careful to not promise so much that it ends up costing so much to deliver on that you don’t actually raise enough money for the making of the film! I think that the donors also have become fatigued with giving large sums but getting something in return that’s not really equal in value.

“With Totemic’s collectible model, on the other hand, the backer’s making a bet on you, and by extension on the future value of the cards. As well as helping the film get made, they are also potentially acquiring something of real value for themselves. It’s a win-win! Best of all this money comes with no obligation to pay it back, which is immensely useful for an independent film, where every penny needs to go a long way. Money that doesn’t need to recoup (be it crowdfunding or grants) can be a crucial part of making a film more economically viable: it allows one to deliver a film that punches above its weight production value-wise, and which industry money feels safer getting involved with — because they are getting a film for only a fraction of its real cost.”

This is why we started Totemic: we see a massive potential, in the emerging class of collectible digital assets, to create a new opportunity in the crowdfunding space — both for creators and backers. Of course, crypto-assets are a new and turbulent space: on any given day skeptics are proclaiming their doom, while boosters are determined that whichever token they’re pitching is going ‘to the moon’. But the fact remains: Bitcoin has, for all but the most hardened ‘nocoiners’, shown that trustless, blockchain-based digital assets can gain and retain real value. We believe the same can and will be true of digital collectibles — backed not only by blockchain, but by the reputation and projects of artists both new and emerging.

Thanks to Emily for being one of the first filmmakers to make use of the Totemic platform to raise funds for her film. You can buy her cards right now on the Totemic platform at https://totemic.co.

By Totemic on July 23, 2018.