Blockchain Startups With Real World Applications

You might have already heard, but Bitmark has been selected as one of twelve startups to participate in the 2019 UC Berkeley Blockchain Xcelerator! We’re very excited, and would like to thank Blockchain at Berkeley, The Sutardja Center for Entrepreneurship and Technology, and the Haas School of Business for this opportunity to connect with the extensive resources that the Berkeley and Silicon Valley communities can provide.

Over the course of the next few weeks we’ll be meeting with advisors, mentors, and industry experts, attending weekly pitch sessions and speaker sessions. The accelerator offers the opportunity to receive an investment of up to $200k USD from the X-Fund, a VC focused on investing in UC Berkeley’s Blockchain ecosystem and emerging technologies. We’ll also have the potential to win additional investments from partner funds.

What makes this accelerator so unique is that its leadership seeks to push blockchain technology beyond the hype of cryptocurrency and further its adoption practical tool. This first batch of teams consists of startups that are more than just ICOs and quick ways to make some cash. We have all demonstrated the ability to offer concrete new ways to use blockchain to solve real problems and create new value.

Bitmark is certain that data is the world’s next major asset class. We use blockchain to defend the evolution of property rights; from physical and intellectual property to data and digital property. To read more about us and our fellow teams, check out:

Meet the teams: Berkeley Blockchain Xcelerator kicks off with first batch – Berkeley Blockchain…
On March 19, the Berkeley Blockchain Xcelerator welcomed its first batch of teams to the recently launched accelerator…

xcelerator.berkeley.edu

By Simon Imbot on April 26, 2019.

Photo by Curtis MacNewton on Unsplash

How To Use Blockchain To Make Your Data Less Tragic

Written By Shannon Appelcline

The problem begins two hundred years and at least two technological revolutions before the blockchain. Because grazing lands were held in common, individuals had no incentive to use those fields appropriately. Farmers allowed their animals to overgraze, eventually ruining the land because each individual sought to maximize their own benefit.

This is the Tragedy of the Commons, as first detailed by William Forster Lloyd in 1833. The Tragedy describes the problem of using an openly accessible resource, where any individual can benefit from using the resource but the costs of that use are borne by the entire group. The selfish and destructive usage that naturally results is the Tragedy of the Commons.

“The vast innovations and expansions of the modern age have now brought the Tragedy to new fields.”

Most classic examples of the Tragedy of the Commons are ecologically based, focused on topics like overgrazing, overfishing, and overpopulation. However, the vast innovations and expansions of the modern age have now brought the Tragedy to new fields. Much of our society now operates on interconnected computer technologies that are full of common resources. It flows through shared fiber and routers; it operates on shared software; and is transmits and uses data that has been shared, whether we intend it or not. The Tragedy of the Commons tells us that all of these openly accessible resources are likely to be abused to the point of destruction; the whole internet might be one problem away from a complete breakdown.

The Heartbleed bug of 2014 offers one of the clearest examples to date of how the Tragedy of the Commons impacts our shared online commons. Heartbleed was a critical security bug accidentally introduced into OpenSSL, the open-source software used to secure most communications on the internet, as part of a “heartbeat” extension released in 2012. Though the heartbeat code was reviewed when it was incorporated into OpenSSL, the process was much less rigorous than the extensive security reviews that had been required of SSL implementations in its earliest days. That’s because in the 2010s, OpenSSL was being maintained by just a single full-time developer and a small group of volunteers. Thus, a problem like Heartbleed, where a mistake compromised half-a-million certs and uncountable “secure” connections, was almost inevitable. The entire internet was using the shared resource of the OpenSSL code, but no was one supporting it properly: this is the definition of the Tragedy of the Commons.

Open source software is just one of the twenty-first century’s tragic commons. Many of the shared resources that comprise the internet have already proven vulnerable. Asymmetric DSL lines can get clogged by uploads, while entire neighborhoods see their internet slow down every Saturday and Sunday night. Forums created for communities can be destroyed by spammers trying to make a buck.

And then there’s a digital resource that many people don’t think about: data.

The Data Commons & Digital Property

Most internet users don’t realize that their data is quickly becoming a commons too. Unfortunately, when we upload data to the internet we usually forfeit our exclusive ownership. Obviously, when we write blogs, post images, or tweet messages, they might get copied of reused by others. Some of this replication is supported by the law, some by terms of service, and some not at all, but it happens nonetheless.

“Most internet users don’t even realize that their data is quickly becoming a commons too.”

However, the data joining this new commons goes far beyond the material that we explicitly post. Exercise trackers record where we are; internet searches reveal our interests; and voice assistants do both. Using this data, aggregators can create models of who we are, what we want, and what we might do — without our permission, and beyond our control.

Our health information is becoming part of the data commons too. That includes our DNA information, which is some of the most intimate and personally identifiable data out there. Despite that, people are now sending their DNA off to companies and uploading it to publicly searchable websites. These genomic data commons have already led to uses beyond the dreams of submitters, such as when the Sacramento County Sheriff’s department searched the GEDMatch database for the identity of the Golden State Killer — a burglar and serial killer who terrorized California in the 1970s. They were able to match records of 10 to 20 distant relatives and eventually built a family tree that revealed the killer. Obviously, tracking down a serial killer is a societal good, but it shows how data placed in a commons can be used for far different purposes than was intended.

In other words, the classic Tragedy of the Commons applies to this data commons. Our data gets used and reused, diminishing its value while the commons get abused, likely leading to their ultimate destruction. There’s no transparency, and we have no control.

This Tragedy of the Commons is just one example of a negative externality, where we as individuals are impacted by transactions between other people. The lack of concern for the data commons also generates other externalities, such as the loss of privacy and the possibility of financial losses when our data is breached — and huge data breaches impacting millions of people have been happening regularly, with some of the largest occurring at Equifax, Marriott, and Target. This adds insult to injury; even once your data has become valueless, you can still be harmed by malicious actors stealing and selling your personal data.

So how do we solve the tragedy of the data commons? How do we take back our control of our data? We can do so by reaching back to classic property law, newly updated for the digital age, which permits us to register our data as digital property. Doing so allows us to prove that we’re the owners of that data. We can prove whether specific uses were licensed (or not!), and we can demand that our data be returned to us if it’s being used in some unlawful way.

Even better, the Coase Theorem tells us that registering property can also help to resolve other externalities as long as all parties are able to freely negotiate. If our data is registered as digital property, then we will have recourse when a company loses our data to a breach, because they will have done us definable harm. Not only can we take back what is ours, but we can enforce better use of the commons itself.

Property rights are crucial to our modern society, and the example of the data commons shows us why: they allow us to exert property rights when our data is used, sold, compiled, or even lost without our permission.

The Data Commons & The Blockchain

Turning data into registered digital property solves the basic tragedy of the data commons, but it creates a new problem as well, because that data has to be recorded somewhere by someone. This suggests the need for a centralized authority, but that goes against one of the core advantages of the internet: the openness that led to most of its innovative growth.

“When you add regulation, you typically have to add centralized management as well.”

As it happens, centralization is an almost inevitable byproduct of any traditional solution to the Tragedy of the Commons. When Lloyd originally wrote about the Tragedy, he stated that it largely resulted from lack of regulation, and when you add regulation, you typically have to add centralized management as well. So how do we regulate property rights in the data commons without turning to a centralized authority?

The answer is one of the newest technologies of the last ten years: the blockchain.

The blockchain originated with Bitcoin, but is now the heart of a variety of use cases from smart contracts to decentralized identities to name services. A blockchain is essentially a permanent, distributed ledger. In other words, it’s a big database that everyone can write to, but that no one can erase. From the viewpoint of the Tragedy of the Commons, the crucial innovation of the blockchain is that it’s built upon consensus rules. The way in which data is added to the blockchain is defined by clear rules that everyone knows. These rules can be changed, but that takes consensus too.

The blockchain thus offers a solution to the tragedy of the data commons while still maintaining the innovative open nature of the internet. Its consensus rules are regulations, but they’re regulations that are executed by the distributed network itself, rather than a central entity.

Obviously, blockchains can’t solve every Tragedy of the Commons, but they are a solution for things that can be put on a blockchain, including those smart contracts, those decentralized identities, those name services, and more generally … all of our data.

The Data Commons & Bitmark

This discussion isn’t just theoretical. The use of a blockchain to record digital property rights is the heart of the Bitmark Property System: it’s already managing numerous sorts of data, from health information to music royalties. There were many reasons to adopt this particular solution and foiling the Tragedy of the Commons is definitely one.

However, Bitmark’s work on digital property rights is just the first step in solving the tragedy of the data commons. To reach its fullest success requires buy-in from companies, governments, and individuals. Fortunately, the tides have been shifting in recent years: a variety of groups are now looking at self-sovereign solutions of this type, where control is granted to people, not companies, governments, or organizations.

The EU’s 2018 GDPR has gone the furthest in giving people control over their data. It empowers people in Europe to know how their personally identifiable data is being used and gives them the power to retrieve it if necessary. The GDPR defines personally identifiable data more as a human right than a property right, but it’s a clear step in the same direction: once we’ve recognized peoples’ personally identifiable data as their own, recognizing their registered data is an obvious next step, and one that Bitmark is ready for.

We’ll see plenty of other Tragedies of the Commons on the internet as the online world continues to mature, and it seems likely that the blockchain will be a good solution for many of them.

How might blockchains, or the approach of consensus rules, apply to other shared resources like open software, shared bandwidth, and community forums? That’s exactly the sort of question we should be asking to ensure the future of the internet.

Further Reading

Armerding, Taylor (2018). “The 18 Biggest Data Breaches of the 21st Century”. CSO Online. Retrieved from https://www.csoonline.com/article/2130877/the-biggest-data-breaches-of-the-21st-century.html.

Davidow, Bill (2012). “The Tragedy of the Internet Commons”. The Atlantic. Retrieved from https://www.theatlantic.com/technology/archive/2012/05/the-tragedy-of-the-internet-commons/257290/.

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

Lloyd, William Forster (1833). Two Lectures on the Checks to Population. Retrieved from https://en.wikisource.org/wiki/Two_Lectures_on_the_Checks_to_Population.

Synopsys (2017). “The Heartbleed Bug”. Retrieved from http://heartbleed.com/.

Zhang, Sarah (2018). “How a Genealogy Website Led to the Alleged Golden State Killer”. The Atlantic. Retrieved from https://www.theatlantic.com/science/archive/2018/04/golden-state-killer-east-area-rapist-dna-genealogy/559070/.

By Simon Imbot on April 20, 2019.

Coase Theorem in the World of Data Breaches

“This is a really serious security issue, and we’re taking it really seriously,…..I’m glad we found this, but it definitely is an issue that this happened in the first place.”

— Facebook CEO Mark Zuckerburg

(after the company’s security breach that exposed the personal information of 30 million users.[1])

We now live in a world of data. Every single day, each one of us generates some very personal data about what we see, where we go, who we talk to, what we think and even who we are. Data is quickly becoming one of the most critical factors of production in the current market economy. Yet, it also brings negative externalities that cannot and should not be ignored for the market to function effectively. Many economists have proposed theories and tools to tackle the problem of externalities. In this article, I am going to specifically focus on the solution proposed by Ronald Coase in 1960, and show how the theory can be applied to the modern world of data.

When the Market Fails

Before diving into the Coase Theorem, we first need to first talk about “externality”, which can be defined as the positive or negative consequences of economic activities on third parties [2]. The externality is considered to be a form of market failure — as it is the spillover effect of the consumption or production of a good that is not reflected in the price of the good [3]. That is, the market equilibrium fails to capture and reflect the real cost/benefit of economic activity. Some everyday externalities that people encounter including air pollution and cigarette smoking. Another classic example of a negative externality is described by Garrett Hardin in his scientific paper named “The Tragedy of the Commons”, which discusses how individuals tend to exploit shared resources so the demand greatly outweighs supply, and the resource becomes unavailable for the whole [4].

Pollution is a classic example of a negative externality.

Coase Theorem: Assigning Property Rights to Tackle Externalities

Prior to Ronald H. Coase, who was awarded the Nobel Prize for Economics in 1991, economists were prone to consider corrective government actions as the solutions to externalities. For instance, by setting numerical limits on activities with external effects (Command and Control regulation), placing a subsidy to increase consumption of positive externalities, and internalizing the externalities using price system (Pigouvian tax). However, in his publication “The Problem of Social Cost” in 1960, Coase argues that there is a real danger that such government intervention in the economic system, in fact, leads to the protection of those responsible for harmful effects [5]. Instead, he suggests that the market can potentially solve the problem of externalities by itself if property rights are complete and parties can negotiate costlessly.

“We may speak of a person owning land and using it as a factor of production but what the land-owner in fact possesses is the right to carry out a circumscribed list of actions.”

— — C., Ronald (1960). The Problem of Social Cost.

To see how this economic theory can be applied to a real-world problem, let’s take a quick look into the Cap-and-Trade system.

Cap-and-Trade: A real-world application of Coase Theorem

Facing the global challenge of climate change, the European Union created the world’s first international Emission Trading System (ETS) in 2005 with the goal to reduce greenhouse gas emissions. The EU ETS works on a Cap-and-Trade principle — — A cap is set on the total amount of certain greenhouse gases that can be emitted by installations in the system. The cap is reduced over time so that total emissions fall. Within the cap, companies can receive or buy emission allowances which they can trade with one another as needed [6]. In other words, the cap to some extent represents the right to emit certain greenhouse gases, whereas the trading reflects the negotiations Coase argues that can lead to more efficient market allocation.

“Trading brings flexibility that ensures emissions are cut where it costs least to do so. A robust carbon price also promotes investment in clean, low-carbon technologies.”

— The European Commission

According to the EU, the ETS has shown good results as the cap on emissions from power stations and other fixed installations is reduced by 1.74% every year between 2013 -2020 [7], and the emissions are estimated to be 43% lower than in 2005 by 2030 [8].

Coase Theorem in the World of Data Breaches

Living at the age of big data, data breaches have become increasingly common in our daily lives. According to the Identity Theft Resource Center, the number of significant breaches at US businesses, government agencies, and other organizations reached 1300 in 2017, compared to less than 200 in 2005 [9]. This increase is partly due to the fact that the world’s volume of data has grown exponentially over the past decade, giving cybercriminals a greater opportunity to expose massive volumes of data in a single breach [10].

Although it is normally defined as an “incident” where information is stolen or taken from a system without the knowledge or authorization of the system’s owner [11], I suggest viewing data breach (especially those ones involving personal information) as a modern form of negative externality. It is because when the data that institutions captured from individuals to run their business get breached, individuals get spillover effects in terms of privacy and financial loss. Yet, the liabilities of such harm are not clearly defined and therefore taken into account within the market mechanism.

“We found no evidence that any developer was aware of this bug, or abusing the API, and we found no evidence that any Profile data was misused.”

— Google Official Statement disclosing the data leak affecting up to 500,000 accounts [12].

Take Facebook’s security breach in September 2018 as an example. 30 million people (more than the whole population of Australia) had their names and contact details leaked, and within which 14 million of them further had their sensitive information (include gender, locale/language, relationship status, religion, hometown, self-reported current city, birthdate, education, work etc) exposed to the attackers [13]. With the significant harm that this “incident” brought to people’s privacy, what Facebook did was apologizing, saying that it was “a breach of trust” and that they “promise to do better” for the users [14]. Yet no matter how sincere those apologies might be, they cannot and will not solve the core of the problem.

Data breaches cause great harm to society as well as individuals. However, such negative externalities are not well captured and reflected in the market.

It is, however, not to suggest solving data breaches with one-fits-for-all governmental regulations. Because according to Coase, we need to recognize the reciprocal nature of the problem. That is, a data breach cannot happen without Facebook failing to secure its data, but at the same time, it also cannot take place without the users willingly inputting data to the platform. So what is missing here, based on the Coase Theorem, is the clear definition of the rights to data.

In the World of Data where Property Rights are defined and defended

Based on Coase Theorem, the property rights to data, in fact, refer to the rights to carry out a circumscribed list of actions. A couple of examples of actions shall include:

  • Right to control access to one’s data
  • Right to monetize one’s data
  • Right to donate/give away one’s data
  • Right to defend the privacy of one’s data
  • …….

When the above rights to data are clearly defined, individuals are empowered to have legal recourse and bargaining power against a “data breach incident” that inflicts their rights. In the case of Facebook, for example, users will be able to confront Facebook in court for its failure to defend the user’s data privacy and use the data only for the permitted purpose (intentionally or not). Or even before the outbreak of a data breach, which seems inevitable for centralized data storage, users can already negotiate terms with Facebook for the potential risks that Facebook exposes them to. Facing such confrontation and consequences, Facebook will be forced to better capture the costs and risks it bears when storing/utilizing its users’ data. This might lead to a change of business model for Facebook or a new user-platform relationship where Facebook openly compensates users for the risks they are exposed to.

In short, as argued by Coase, once the rights to data are clarified, parties can openly negotiate terms and compensations resulted from the negative externalities — just like how we do with greenhouse gases — and therefore lead to better market equilibrium.

Baby step at a time to tackle market failures in the world of data

The Facebook data breach is not the first of its kind, and unfortunately will not be the last. In fact, it is estimated that data breaches will just become more frequent, bigger and more expensive in the near future. Therefore, although Coase Theorem, similar to all economic theories, has its limitations with real-world applications, it still sheds lights on how defining the rights to data can be the first step toward solving digital world negative externality such as data breach and enabling a better-functioned market mechanism in the long-term.

References

[1] The New York Times (Sep 2018). Facebook Security Breach Exposes Accounts of 50 Million Users. Available at: https://www.nytimes.com/2018/09/28/technology/facebook-hack-data-breach.html

[2] Quickonomics. Positive Externalities vs Negative Externalities. Available at: https://quickonomics.com/positive-externalities-vs-negative-externalities/

[3] Intelligent Economist. Introduction to externalities. Available at: https://www.intelligenteconomist.com/externalities/

[4] Investopedia. Tragedy Of The Commons. Available at: https://www.investopedia.com/terms/t/tragedy-of-the-commons.asp

[5] C., Ronald (1960). The Problem of Social Cost.

[6] European Commission. EU Emissions Trading System (EU ETS). Available at: https://ec.europa.eu/clima/policies/ets_en

[7] European Commission. EU Emissions Trading System (EU ETS). Available at: https://ec.europa.eu/clima/sites/clima/files/factsheet_ets_en.pdf

[8] European Commission. EU Emissions Trading System (EU ETS). Available at: https://ec.europa.eu/clima/policies/ets_en

[9] Priceonomics. Why Security Breaches Just Keep Getting Bigger and More Expensive. Available at: https://priceonomics.com/why-security-breaches-just-keep-getting-bigger-and/

[10] Digital Guardian (Jan 2019). The History of Data Breaches. Available at: https://digitalguardian.com/blog/history-data-breaches

[11] Trend Micro. Data Breach. Available at: http://www.trendmicro.tw/vinfo/us/security/definition/data-breach

[12] Google (Oct 2018). Project Strobe: Protecting your data, improving our third-party APIs, and sunsetting consumer Google+. Available at: https://www.blog.google/technology/safety-security/project-strobe/

[13] Facebook Newsroom (Oct 2018), An Update on the Security Issue. Available at: https://newsroom.fb.com/news/2018/10/update-on-security-issue/

[14] The Verge (Mar 2018). Mark Zuckerberg apologizes for Facebook’s data privacy scandal in full-page newspaper ads. Available at: https://www.theverge.com/2018/3/25/17161398/facebook-mark-zuckerberg-apology-cambridge-analytica-full-page-newspapers-ads

By Hsiang-Yun L. on February 26, 2019.

How musicians are using blockchain to make a profit from their songs

How musicians are using blockchain to make a profit from their songs

Bitmark Ambassador Series: Pochang Wu works to defend property rights for music hosted on streaming platforms

Pochang Wu on stage at an Echo show

The Bitmark Ambassador series highlights innovators who understand the importance of property rights for data and digital assets. They are industry pioneers — artists, lawyers, scientists, health researchers, hackers, makers and creators.

“We want to develop a complete ecosystem for indie music….We created an infrastructure that we hope allows all the people in this industry to build a decentralized distributed system for managing artist rights.” says Pochang Wu, the first Bitmark Ambassador (see video embedded at end of this story).

Wu is an entrepreneur and the lead singer for 回聲樂團 (Echo). He has been a major player in a movement to correct issues in Asia’s independent music industry. Wu is the founder of iNDIEVOX, which was the first DRM-free music store in Taiwan. iNDIEVOX’s decision to remove DRM was an important one: it recognized and corrected a problem with online MP3 sales, where DRM was restricting the property rights of consumers buying digital music.

Generally, this has been Wu’s approach in his endeavors: to identify the flaws in the music field and then correct them.

“Give the power back to the people, to each individual, the creators, and those who love music.”

Property rights for songs and royalties.

Wu has worked with many music industry institutions, including labels, streaming services, and more. By using the Bitmark digital property blockchain, he has created a digital solution to the complicated management process of song rights and royalty payouts.

Streaming music services have done much to raise the profiles of indie musicians by providing instant distribution to a mass audience. Yet, the process of paying royalties has generally remained a cumbersome, manual process that can take up to twelve months after a song is released. (Typically, royalty rights are recorded in spreadsheet files stuck behind corporate firewalls.) This time-intense and costly process cuts into the profits of both sides and reduces transparency for the artist.

“We created an infrastructure that we hope allows all the people in this industry to build a decentralized distributed system for managing artist rights.”

Now artists, like Wu, can register song rights as property via the Bitmark blockchain. This enables them to track who owns which rights more effectively, without cumbersome databases or paperwork. Rights owners can more easily transfer their holdings. With clear property ownership, royalty payouts will go directly to the artist.

“Blockchain gives us imagination and possibility, allowing each individual to control his or her own things, whether they are rights, assets, documents, or information.”

Wu is leading the music industry toward a much needed collaborative system of transparency for music rights and management. This is a fantastic first step for individual artists, who will be able to make a living from their digital content because they can legally prove the rights to their original works. It is also pioneering a path, for the music industry as a whole, to implement more transparent systems that benefit everyone involved.

“I think to hold rights in our hands, is a core concept and value for blockchain as well as independent music.”

Watch to learn more about what drives Pochang Wu to help musicians all over the world.

By Bitmark Inc. on January 28, 2019.

CEO of Bitmark Sean Moss-Pultz: Working with Fung Fellows

Fung Fellow team Soteria Health, Hamilton Chang, Alejandra Leynez Chantres, and Yanna Gong (left to right)

The best learning often comes from outside of the classroom. With this belief as a founding principle, the Fung Fellowship for Wellness and Technology Innovations gives undergraduate students access to real-world experiences in the health and tech sectors. Fung Fellows apply their knowledge to impactful projects, collaborating with real customers and working directly with industry partners from many fields.

Bitmark, a startup that focuses on creating tools that enable ownership and property rights to digital assets through blockchain technology, has been an industry partner since 2017. Bitmark sponsored two Innovation Lab projects — Soteria Health, a blockchain-based health data exchange for research and Peerlocity, a transportation data exchange platform using blockchain. We got a chance to learn more about these collaborations and talk with Bitmark’s CEO Sean Moss-Pultz about his experience working with Fung Fellows.

Sean Moss-Pultz, CEO of Bitmark

Bitmark first began working with UC Berkeley through a collaboration with doctoral-level researchers in the School of Public Health (SPH). Using a blockchain-based data-donation app from the company, the researchers were able to crowdsource health data for their studies. Through the success of this project, Sean was connected with Director of Fung Fellowship, Joni Rubin, and Lead Faculty Instructor, Jaspal Sandhu, initiating the Fung Fellowship partnership.

The Bitmark Health app with School of Public Health

“It’s like getting a second brain. The Fellows have a totally different set of perspectives and skills from us,” Sean said.

Team Peerlocity poster, Fung Fellowship 2018

The Fung Fellows particularly emphasized human-centered design — something that the Bitmark team had not focused on previously. In the project focused on the creation of a data economy around bicycle sharing, the Fellows interviewed key stakeholders. Their interviews revealed interesting insights into how local governments could participate in similar programs. This led the Bitmark team to reevaluate their approach and consider local governments as key stakeholders in making the system sustainable.

“We learned a lot about how they look at what’s important for new projects from their process,” Sean said.

The Fellows also learned a great deal through this partnership. One of the Fellows and member of Soteria Health, Hamilton Chang, was offered the opportunity to travel to Taipei and work with the Bitmark team in person.

Poster stand from Soteria Health at Fung Institute’s Winter Spotlight 2017

“I had the chance to learn not only how the software development cycle runs in a small tech startup, but also got to do so in Taiwan, which was an entirely unexpected and invigorating experience,” Hamilton, a Philosophy major with an interest in data, reflected.

Diversity is another big part of the partnership and area of synergy for Bitmark and the Fung Fellowship. Bitmark’s team is very diverse — with 25 employees from six different countries and a 50/50 gender ratio. Similarly, the Fung Fellows come from vastly different academic and personal backgrounds, representing 22 unique majors and hometowns ranging from the Bay Area to Malawi.

“I wanted to learn from the Fung Fellowship how to structure teams with very different backgrounds and make something coherent,” Sean said.

Equipped with intentional teaming curriculum and Fellowship staff directly supporting team dynamics, Fung Fellows began their industry projects with skills and strategies to work across disciplines.

“I learned that a lot of product work is quite similar to what I was doing in my philosophy classes at Berkeley: taking incomplete, sometimes outlandish ideas and systematically breaking them down into tangible pieces. Looking back now, I realize that the Fellowship gave me the space to combine my own strange way of thinking with others to tackle real problems that required creative, interdisciplinary answers,” Hamilton said.

Working with Fung Fellows has made Sean realize how much the youth have to offer businesses like Bitmark.

“By integrating their perspective into product development, as early as possible, I believe we can make better products for everyone,” he said.

Fung Fellows Léa Tran-Le and Omar Muhamed presenting the project

Inspired by the future use cases proposed by Fung Fellows working on the health data exchange project, the Bitmark team is now working on a health app to help people digitally aggregate and control all their health records. This app acts like a “health data trust” that crowdsources data directly from individuals. Not only does it free people from the hassle of keeping different paper documents, but it also decentralizes the oversight of data. The system is governed by a public blockchain which avoids any third-party institution, making the transfer of data more transparent and secure.

“We’re absolutely looking forward to doing more with Fung Fellowship in the future,” Sean said.

By Jessie Ying on January 03, 2019.

A more sustainable business model for artists—register property rights on the blockchain to own…

A TEDx talk by Bitmark advisor: Amy Whitaker

A more sustainable business model for artists—own your work and get paid via property rights on the blockchain

A TEDx talk by Bitmark advisor: Amy Whitaker

“We live in an age of democratized creativity, but not yet democratized ownership.”

Anyone working in the arts knows the greatest plight of an artist is finding a sustainable business model that simultaneously, (1) generates enough interest from patrons and income to afford materials to continue creating work while also (2) allowing unencumbered time to create. It’s a fine and tricky balance, and one that plagues all types of artists: writers, painters, choreographers, directors, designers, the list is long.

“Two fears I think we all have: the fear of not being able to make a living, and the fear of not being true to yourself creatively.”

Many artists find comfort in creating commissioned work: finding an established partnership where a patron funds the entire project and the artist is freed from the task of raising the money for project or personal expenses. A patron might allow a large budget for a work of art, but oftentimes, the higher the budget, the more particular the parameters of the project. This influence extends into pleasing the patron’s whim or ideas of what the artist should create. Additionally, in a commissioning partnership, the patron owns the artwork, not the artist.

Maybe this structure feels outdated, but it’s not; the same set-up happens all the time for artists who receive grants, which in the arts is the most common way to fund work (and also happens to make up the highest percentage of funding for most projects). Any artist who applies to receive grant money must also report back to the grant organization on their progress. It is often the case that if an artist does not fulfill the grant requests, money is either taken back or not given at all.

Artists who choose the different path of funding their own work can get bogged down by spending time making money (i.e. a “day job”) that leaves them with little time for their art.

A new potential solution: ownership rights

Intertwined with this time versus money conundrum is the concept of ownership. Selling artwork is the most traditional way of making money in this particular field. But, any notion of selling, first requires a clear notion of ownership. Plagiarism in all art forms is rampant. And it’s only become worse because social media platforms are a great tool to engage large audiences and followers, to accumulate views and shares and likes, but the copying and freely sharing have ruined many artists’ ability to claim ownership of their creative works. And clear ownership is a coveted thing.

Blockchain isn’t a panacea for all issues that artists face. However, specific types of blockchains can provide artists with a way to establish ownership of their work, which in turn facilitates clear exchanges with others and leaves them with a more sustainable, efficient way to be paid for the work they create.

Amy Whitaker, an NYU professor, artist and researcher, describes eloquently in the TEDx talk posted below how the blockchain can help amend many woes for artists (in both digital and physical mediums) by providing a tool to register ownership rights of their works.

As Amy describes in a WSJ article, the formulation of blockchain technology came about to organize information and data in a more truthful, secure and efficient way. The decentralized structure of a blockchain means is set up by having “many dispersed but interconnected copies of a shared ledger. The truth could never be typed over if there were too many linked ledgers to alter.”

Blockchain provides the backbone to cryptocurrencies like Bitcoin and Ethereum — this immutable, truthful ledger is what solves the double spending problem (the act of spending the same tokens in two places and getting away with it) in those currency systems. A blockchain set up specifically to record property rights employs a set of digital rules (basically a secure transfer system that enables you to share or sell an asset or property without “double spending” that property and tricking the system or your potential buyer) that ensures your property is yours and not anyone else’s — not even the platform where you register the property. The Bitmark blockchain, for example, is public and open source. It is decentralized, with complete transparency for all parties who wish to see its contents (not the secure details of data and personal information, rather just the ownership titles and transfers). It is structured to register property rights at minimal fees, and set up to essentially issue legal (not smart) contracts with any buyer or seller at scale.

Ownership rights are twofold: 1 claiming the artwork as personal property means defining the work as well as the entity who owns it; 2 establishing the rights of that property: fair use of the image in other forms (prints, posters, cards, etc), and payment if and when the work is sold, or used in the case of licensing.

When artists can clearly register their work as personal property, buyers can then request to buy their work. The artist can receive payment upfront before they transfer the title of the work to the buyer.

With ownership rights, artists can benefit in the following ways:

  • Limit issues around fraud and copying — The blockchain is a digital ledger, with immutable time stamping that is public. When something is registered on the blockchain, it’s permanent, which mitigates questions of who owns what when looking at copies of art work.
  • Set the rules and terms of use for their works — Blockchain security makes it possible for artists to get paid for their works without giving their art over before receiving payment.
  • Enable faster payments — Because the blockchain can be linked to banks and digital currencies, artists can get paid faster than with traditional models.

In the TEDx talk below, Amy describes how the blockchain can help artists:

For further reading, check out Amy’s original whitepaper “The Social Life of Artistic Property” and her previous academic paper “Artist as Owner Not Guarantor: The Art Market from the Artist’s Point of View.”

By Bitmark Inc. on December 11, 2018.

Nobody is keeping track of your health. It’s up to you.

Nobody is keeping track of your health. It’s up to you.

I was wrong to think that having good health insurance meant I’d have good (complete) health records.

Written by Shelly Lai

Photo by Owen Beard on Unsplash

I went on a mission to collect my health records, and was surprised with what I found:

  1. Only the last seven years of my health records are intact and retrievable. All the previous records have been deleted.
  2. Even though I’ve had centralized, national health insurance for my entire life, my records are not all in one place. They are scattered among the doctors, clinics and hospitals where I’ve ever received care.
  3. I have begun keeping my own health records because I don’t trust the direction medical care is headed with AI or machine learning tools “predicting” diagnosis based on such limited health data.

I have really great health insurance because I live in Taiwan. Our National Health Insurance makes it easy and inexpensive to receive great care, because it’s built upon a simple system of centralized health records. When I was recently challenged to track down my medical records, I assumed it would be easy. I was wrong.

Image used in theBloomberg article linked below

I work as a researcher at Bitmark, helping find digital solutions for the issues plaguing the health industry: institutional data collection, medical record management, public health research at scale, and much more. Lately we’ve been heads down building an app to help people collect and own their medical records in order to pair their records with the daily health data already tracked by their smartphone, giving them an easy-to-access more holistic view of their health. [Shameless plug, if you want to know more about that app (it’s in beta, we need users!), jump to the bottom to read a bit more.]

I assumed the work we’re doing is to help people in countries without national healthcare manage their health records. Little did I know I’d need this just as much…

Most of the Bitmark team lives here in Taipei, Taiwan — it’s our main office. But Sean, our CEO, is American. He’s explained the plight of a fractionalized healthcare system, how in the US it’s difficult enough to just to sort through healthcare registration, let alone manage health records from so many insurance carriers and doctors’ offices. All along, I’ve assumed the work we’re doing at Bitmark is to help Americans and people in countries without national healthcare manage their records. Little did I know I’d need this just as much in Taiwan.

Sean said “If it’s that easy to collect your health records, show me.” I embarked on this task that appeared easy enough, even though I (and I’m pretty sure the majority of our Taiwan team) still didn’t believe it was necessary.

The Taiwanese National Health Insurance System (NHI)

Taiwan launched its national health insurance (NHI) in 1995 with comprehensive coverage including inpatient and outpatient care, dental care, over-the-counter drugs and traditional Chinese medicine. Taiwan’s NHI is touted as a model for other countries (hint hint, the US) since Taiwan had many of the same issues that plague the US like high insurance premiums, non-comprehensive (or no) coverage for people without private insurance.

NHI Smart Card (found at nhi.gov.tw)

The NHI has been a big success, now covering 99.6% of Taiwan’s residents, with service contracts with 93% of the country’s hospitals and clinics, according to the NHI’s 2017–18 annual report. Bloomberg ranks Taiwan’s NHI system #9 in the world for health care efficiency. (The US is #54).

Everyone in Taiwan has a NHI Card, which contains all their basic info and medical history. When someone visits a doctor or hospital or clinic, the doctor inserts her NHI card into the card reader, and can scan through key information like prescriptions, allergies, and past care or visit information.

With this card system, I thought it’d be easy to collect my records. According to the Taiwanese Medical Care Law, patients have the legal right to request copies of their medical records as well as medical imaging.

And it did start out easy enough. All the big hospitals have clear instructions on their website explaining the application process and fees. People can apply for their health records via phone, email, or in person, and the application form is easy to complete. Once submitted, it takes less than 3 working days before the applicant can collect the records.

Yes, hospitals and a centralized system made it relatively easy to retrieve what I wanted. However, there were some issues.

This centralized system isn’t so …. Hm, centralized?

You still have to go to multiple offices if you’ve received treatment from various spots.

If I saw a specialist across town once for a surgery, those records would be at that particular hospital. It turns out the Taiwanese NHI system doesn’t store my medical records — each hospital and clinic does.

In line to collect my health records.

Although our costs in Taiwan for healthcare may be drastically lower than in the States, our ability to personally collect our records may not be so dissimilar. In Taiwan, our healthcare system may not be as centralized as I thought.

To collect a comprehensive set of records, you need to remember every single hospital or doctor’s office you’ve ever had treatment. That poses a serious challenge. I knew this was a problem for Americans and people without a national healthcare system, but I didn’t expect it to be an issue for me.

They are mine, but they are very clearly not mine.

It was a disturbing feeling to have to ask and pay for something that should be my property. For all intents and purposes, these records are about my physical being, my body and health; they should be mine.

Nothing screams “this does not belong to you!” quite like having to pay for it.

Yet, ten pages of medical records cost approximately NT$ 150 (~$5 USD). It’s not an extraordinary amount of money, but it added up after going to every place. And nothing screams “this does not belong to you!” quite like having to pay for it. These are my records. Yet I have to pay every time I want to get a copy of them. Even if I retrieved a copy and then accidentally dropped them down a storm drain, if I went back to get a second copy the same day, I would have to pay again.

Did I mention that you get a literal stack of papers stapled together? And any images you request come on a CD — which only works on Windows. (Who has a CD rom anymore?) The hospitals/clinics I visited didn’t have the capability to offer me a digital file. If I cannot feasibly even see or read my records, this is a clear sign that my records don’t belong to me, they are not my property.

It’s incomplete! There’s a limit to the amount of data they keep.

This was the biggest shocker for me: The NHI is only required to keep seven years of your medical records.

The hospitals and clinics that I went to more than seven years ago do not store my medical records or imaging anymore. Eeeep! I assumed everything about me is safely stored in a centralized database, and that I can get it anytime I want. Nope. After the obligatory seven years, records are destroyed and there’s no way to get them.

Finding out that my health records from the first 20 years of my life are irretrievable, really scared me.

How can a health care system with only seven years of data on me truly make the best medical decisions for my optimal health? A doctor might not know of a major surgery, past medications, allergies that only showed up once. Those are the things that I would probably remember. But what about all of the detailed terminology that I wouldn’t remember about those medical appointments? Plus, diseases and health conditions develop over a lifetime, not just over seven years. The conditions that lead up to more serious illnesses need to be tracked over time. Without that lifetime of information, I feel I’m not getting the fullest medical treatment I can. It’s kind of scary when you think about it.

And what about the future of healthtech? As we start to use AI and machine learning for predictive medicine and patient engagement, will these robots only be using the last seven years of our data? Even if it’s only to make minor medical decisions to predict health outcomes, I don’t feel very comfortable with that. How can new tech be effective with such limited data history? I don’t want AI determining my health outcomes based on only the last seven years of my health information.

If nobody is keeping track of my records or health, it’s up to me.

So in the end, I’ve learned that even in the best of circumstances, like living in a country with a well-regarded national health system, I need to take control of my own medical records to have comprehensive info on my health. In order to only establish ownership over what should actually be mine, and to guarantee that I will be able to source my records when I most need them.

via Giphy

Bitmark Health

If you jumped down here to see about the Bitmark Health app (or made it through my story, thank you!) here are the details:

Bitmark is working on an app that will allow people to record and register their health data (the stuff already tracked by a smartphone) as well as their medical records (imaging, scans, photo uploads… if you can retrieve them all) and empower people to keep everything in one, secure, easy to manage place — to gain a more holistic view of their health.

Screen shot from Bitmark Health

We’d love your help as we work out the best version of the Bitmark Health App: download it on iTunes, and join the FB group to give feedback.

By Bitmark Inc. on October 30, 2018.

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.

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.

Third World Countries are Richer Than You Think

written by Bitmark intern, Kenneth Lee

Source: https://qph.ec.quoracdn.net/main-qimg-7283b00e311a28c8502822b242e5a70b-c

Capitalism, Capitalism, Capitalism. In a world where many would argue is “western dominated,” Capitalism is revered as the most successful economic system in the world. Many third world countries try to implement this system and fail. But why? Is it because they aren’t as smart as those in the West? Do they not have as much entrepreneurial spirit? Or do they just lack the wealth and resources? A myriad of help campaigns and news media outlets highlighting their grievances condition us to think the above, but in fact, the people in these countries are just as smart, just as willing, and richer than you think. But for various reasons, they cannot turn the capital they have into wealth. Thus they are only rich in what some call “dead capital.”

What is capital?

To understand what dead capital is, let’s define a few things that are considered capital. Capital is a human made, durable product that can be used to produce other goods and services. Some examples of capital goods include:

  • vehicles such as commercial aircraft and cars
  • software used by companies
  • tools that are used by construction workers,
  • buildings such as office buildings, factories, warehouses, and hotels

As long as it’s used for a business purpose and not a consumer purpose, it’s considered capital.

What makes capital “dead”?

Many factors contribute to a capitalist society’s success, but let’s talk about one of the main characteristics: clear documentation of assets. In the West, everything is recorded and documented in a fairly clear manner: office buildings have titles registered by the state or local government; stores have inventory lists for wares and equipment. Processes like these “list” the asset, creating a clear record of ownership in one singular system, and proving its existence in the eyes of the economy. Because these items are well documented (including both the values of the asset as well as the ownership claim attached), they can be more easily transferred into collateral for loans, credit, and other things. This is why documentation is vital — it allows the asset to have a value in the economy (based on, for example, how big a piece of land is, its desirability, who owns it, etc) and it makes the asset more easily transferable when there is a clear owner. When there is verifiable proof of an assets value and clear ownership claim to that asset, it has all the necessary components to turn it into capital. Having these structured systems in place in many aspects of culture and business is one of the many contributing factors that allow capitalism to thrive.

However, in many non-capitalist countries, assets are not recorded in the same clear manner. Because these assets are not represented in registries or documentation, there’s no way to prove its existence and subsequently turn it into capital. “The value of savings among the poor is, in fact, immense — forty times all the foreign aid received throughout the world since 1945,” as stated by Hernando De Soto in his book The Mystery of Capital. So in reality the hurdle they face is that their systems don’t allow the clarity that could turn the many assets they do possess into usable capital. It’s like if you tried to use pesos in America; it has a value, but it isn’t the currency in America and therefore is of no economical use.

Source: https://media.licdn.com/mpr/mpr/AAEAAQAAAAAAAAzSAAAAJGMyYzVhODJmLTc1Y2MtNDgyNi1iZjI1LWZkMTYwNjkxODMzOA.jpg

Why does it matter?

Moving toward a more globalized economy, recording all assets is key to economic success; you might think: “Why can’t they just start recording all their assets now?” In an ideal world, where everyone is moral and honest, of course that would be a great solution. However, in countries where three people claim to own the same piece of land and have their own separate made-up documents supporting their claims, it’s hard to confirm who owns what. Without a uniform system, the assets that people possess are difficult to transfer and don’t have clear economic value. Lots of ambiguity arises from these issues. They need a uniform solution that efficiently records their assets without confusion, failures of a broken system, or fear of duplication or criminal activity. In essence there needs to be a trustworthy system that provides the authentication of property records as well as verification of ownership claims in order to rectify the huge amount of dead capital many countries possess.

The Bitmark system was created in order to “level the playing field” within the digital environment by bringing the established rules of western land rights to ownable digital things. Bitmark relies on a blockchain, a public digital ledger of records (property titles, in this case).

By recording your property in the Bitmark blockchain, it is verifiably yours, and viewable along with all other recorded property titles, as well as any transfers of these records. Because of its public nature, any user can submit information to be added to the blockchain. Each record, once added to the blockchain, is resistant to being removed, changed, or added to without detection by other users. This transparency of modification adds a layer of security to your asset records. By permanently recording each item on our blockchain, the public record of who owns what can be rectified if discrepancies between owners arise due to this immutable pointer allowing the asset to be clearly identified by its property title.

Transaction of assets are authenticated by public-key cryptography, making them virtually impossible to fake. The decentralized nature of the network makes data leaks more difficult (there are no central parties to hack).

By bringing more accessibility, security, and automation to outdated systems, the use of blockchain technology to record property has the potential to jump-start a country’s economy. Now the immense amounts of dead capital will be able to be correctly documented, introducing a lot of desired resources into the flow of the economy.

If you are interested in using the Bitmark blockchain to record property or assets, or are interested in a partnership, please contact us! We would love to hear from you at support@bitmark.com.

Sources:

https://www.thebalance.com/capital-goods-examples-effect-on-economy-3306224

https://simplicable.com/new/capital-goods

“The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else” by Hernando De Soto

By Bitmark Inc. on March 5, 2018.