Is Bitcoin the Next Big Thing in the Fight Against Piracy?

It might not be easy to understand. It might be unproven. It might sound sketchy. But it might very well provide a new tool to fight against online piracy.

It is bitcoin – the cybercurrency you’ve all been hearing about since 2009 that can nowadays be used to anonymously buy pretty much anything from computer software and movies to pizza – and two South African entrepreneurs believe they have found a novel way to exploit it and blockchain, a revolutionary database technology that makes bitcoin possible, for the benefit of filmmakers. While the underlying mechanics of the proposal are relatively technical and complicated, here’s the abridged, point-by-point breakdown of the basic idea for us non-techies:

• Before sending out screeners for reviewers and other interested parties, the production company or distributor “attaches” a single bitcoin, or a part of one, to the electronic copy of the movie;
• The embedded bitcoin remains dormant in the copy even if copies of the screener end up changing hands illegally and the film enters the pirate market;
• Here’s where things get interesting. Suppose that a copy of the screener ends up on the computer of someone who knows what they’re doing – someone who understands tech, is fluent in bitcoin, and, possibly, who has been hired by the film companies to download and examine potentially infringing material. Upon examining the file, this person realizes that the file is “marked” with a hidden embedded bitcoin;
• The finder redeems the bitcoin, effectively receiving money in exchange for turning in pirated material, and leaving a trail of the transaction to the blockchain (more on that shortly);
• While the redeemer remains anonymous, the copyright owner is informed that the bitcoin has been redeemed and may go back to the blockchain, which is effectively an electronic, decentralized ledger, to find out more about the transaction. In the ledger, the copyright owner will find the unique identification number of the bitcoin redeemed, which the owner can then match with her own database to find out to which file that specific bitcoin was attached, and consequently, who leaked the file in the first place.

Without delving too deep into the technicalities, the blockchain is the service’s most valuable player – it’s decentralized, almost impossible to tamper with, easily accessible, and goes back all the way to the very first bitcoin transaction.

There have been various attempts to utilize the blockchain technology in other industries, including traditional finance and even the music industry to make access to music easier while streamlining royalty payments, but many of these uses are still very much in development, and bitcoin remains the most widespread and developed use of blockchain. There may also be unresolved and yet unrecognized legal questions regarding the wider use of blockchain. However, while other, more specialized ways of using blockchain to fight online movie piracy may be more effective in theory, tying bitcoins into the process presents an intriguing first step considering the widespread use of bitcoins.

While the South African service is at the moment aimed at independent movie studios,  there is no reason to believe that it or similar services could not be extended to big studios and even other entertainment and creative industries in the future. Regardless of its obvious weaknesses – there is no guaranteeing that the illegal copy will end up in the hands of someone who understands bitcoins or wants to redeem the embedded bitcoin, especially considering that the bitcoin user-base is still relatively specialized – and the fact that the service is still new and experimental, it still provides an interesting and potentially significant way of addressing online piracy. In a world with almost 80 billion visits to online piracy sites annually, any help can make all the difference.