KODAKOne: Developing a clear blockchain use case?

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Kodak recently announced a blockchain copyright platform, KODAKOne, at CES 2018. Is it a me too product? Does it have a real business use case, and can it succeed?

Amidst the euphoria on cryptocurrency and ICOs, it is worthwhile going back to understand the practical uses for distributed ledgers and cryptographically secured blockchains to see where they can provide true business value.

Some history

Having cryptocurrency solely as an investment vehicle, and not even used for transactions, defeats the original intent of blockchains, which was to decentralize notions of trust.

The original idea and paper1 published in 1991 by Stuart Haber and W. Scott Stornetta, then at Bellcore, was designed to offer digital timestamps. This is similar to what a traditional notary does, but uses a blockchain to validate that a particular version of a document was created and registered at a particular time, and the data is distributed.

New Use Case

One modern use case in the spirit of the original Haber/Stornetta work is a digital platform to enforce copyright on digital images (i.e., photographs). It is a platform where photographers register their work and the system crawls the web to make sure the content is licensed properly. The blockchain data can then be used to settle disputes, since the record is indisputable evidence that the rights owner registered it at a specific date. If there is unlawful use, then the copyright owner can request payment and the users of the works can license them, if given permission. A concrete example is a stock photo library. Therefore, the entire system is a rights management system, including a payment system for licensing.

This makes sense since a distributed ledger of photographs provides a trusted repository of copyright records. In theory, one can register these works in a centralized trusted location, but there is a possibility that the centralized location (a notary-like intermediary) can be compromised. By using a distributed ledger, there is a common, shared notion of truth that can be used to validate a media document’s copyright without an intermediary.

Behaving similarly to digital timestamps as outlined in the original paper, a distributed photo copyright management system will work properly. With a blockchain foundation, we are declaring that each document (or photograph) is not altered and represents a particular "snapshot" (pun intended) of the media file.

Kodak Joining the Fray

Kodak, the venerable photography company, introduced the KODAKOne platform (based on a partnership with UK photo agency WENN Digital) as a copyright platform at CES 2018. The Kodak that most people grew up with has gone through bankruptcy and the name Kodak is shared by two firms: Kodak Alaris and Eastman Kodak Company. In the case of KODAKOne, I am referring to Eastman Kodak as the one that introduced it.

Competitive distributed copyright management systems include Binded, Photochain, Copytrack, and Stop the Fakes (StopTheFakes.io). These systems are most likely based on similarly designed blockchain-based distributed apps (dApps) that remove the notion of intermediation between a provider (i.e., photographer) and user (i.e., those who want to license photos).

Separating itself from ICO exploiters

For better or for worse, many of these systems are wrapped up with their own ICO (initial coin offerings). It would be possible to use another commonly accepted payment system but associating the payment system for copyrighted works with the copyright enforcement platform is convenient and creates tighter integration. However, given the euphoria on ICOs, many firms are using the ICO route.

It would be unfortunate if any bad reputation from ICOs rubs off and tarnishes valid endeavors. Eastman Kodak has launched its own ICO for KODAKOne with a currency called KodakCoin. However, KodakCoin is offered under the US Securities and Exchange Commission Regulation D 506(c). So it’s only available to accredited investors in the U.S., and a few other countries. Thus I don’t want to view KODAKOne as just another attempt to revive & “juice up” an old firm by bringing blockchain into its portfolio, or one to fleece unsophisticated investors. 

What’s interesting is that, while other traditional household names jump into blockchains, what sets this effort apart is that there is a true business use case. It’s also not a pure speculative venture, such as celebrity-endorsed ICOs. There are other examples of use cases of dubious value, such as Hooters creating a virtual currency for its diners.

I do see business potential for Kodak, albeit in a crowded space. Kodak stock did take a jump based on this, and rightfully there are some skeptics who see it as jumping on a bandwagon. Regardless of the status of the film business, it still is a reputable company with a strong brand name that can be leveraged.

Can it achieve widespread adoption?

What I now need to see is how quickly Kodak can bring this technology to market and increase adoption. We see many content management dApps from its competitors, since dApps are so easy to develop. The problem that results from that simplicity is that it enables the creation of so many dApps of questionable value, reputation, and quality. It’s going to take a fair amount of effort to rise above the noise.

Since the technology was probably developed in partnership with WENN, I don’t want to credit KODAKOne as a sole creator. But Kodak can use its well-known brand to accelerate adoption compared to a start-up. It seems to be doing it with real intent and investment, and is more than just licensing and slapping its name on someone else’s technology, as some other well-known companies have done. I do want to add that Kodak is not immune to this. It also offers Kodak KashMiner, a device for mining KODAKCoin, that is reported to be a re-labeled third party device. 

If Kodak can rise above the fray, that will be great, and it may be a chance for this variant of the original digital timestamp idea to take hold in commerce. Yes, it is true that it is mostly leveraging its brand, and it is not developing original technology based on its own science. But much of commerce today is precisely that, in spheres including pharmaceuticals or computer game distribution.

 

Footnotes:

1. Haber, S. & Stornetta, W.S. J. Cryptology (1991) 3: 99. https://doi.org/10.1007/BF00196791

Topics: Blockchain Cloud Services & Orchestration