Opinion: Blockchain, not cryptocurrency, will be the engine of imaging value

The buzz about cryptocurrency hasn’t escaped the photo industry, as we’ve seen several attempts from companies to adapt their businesses to this economic model. As we’ve seen, Eastman Kodak Co. made the news with its partnership WENN Digital to unveil KODAKCoin, a cryptocurrency based on professional photography. Details are just now being released, which shed some light on the details of the WENN/Kodak arrangement.

According to CoinDesk, Kodak’s March 15 10-K annual report for 2017, revealed EK was paid $750,000 in cash by WENN Digital and received 50,000 shares of WENN common stock, valued at $1.25 million.

Further, Kodak is set to receive 3 million KODAKCoins following the completion of the yet-to-be-finished initial coin offering, which, as reported previously, was delayed (though a private pre-sale is said to be in progress). Those tokens will be valued one year after they are received, though the total assessed value will not exceed $3 million.

Going forward, Kodak will receive 3 percent of any tokens issued by WENN if the total number of coins is greater than 100 million, according to CoinDesk.

In other news, stock-photography upstart Unsplash has raised $7.25 million to bring cryptocurrency to its free, curated photo platform. How it will do that isn’t clear, but that seems to be typical of cryptocurrency schemes these days: Find funding, and work out the business plan later. Unsplash has about 400,000 photos in its collection, offering free photos under a standard license through a series of partnerships. But, according to a Techcrunch report, the business part is still to be developed: “[CEO Mikael Cho] said it’s too soon to know exactly what that model will be, but it will involve blockchain technology and cryptocurrency.”

If there’s anything in common between Unsplash and Kodak, however, it’s that the investment is coming from the cryptocurrency partners themselves. Unsplash raised money from OST, the company behind the Simple Token project; according to blog post by Jason Goldberg, OST’s $5 million investment was 80 percent cash, 20 percent tokens.

Don’t be fooled: Blockchain is where it’s at

It’s still unclear where the future of cryptocurrency is going, and how this will impact photography. But it is apparent, in markets where the value of individual images is important – like stock photography and professional photography – a new licensing model keyed to micro-transactions could be valuable.

The underlying technology of cryptocurrency – blockchain – has tremendous potential for the imaging industry, especially for advertising opportunities like CryptoPicture or for secure licensing of photos, videos and other creative content.

Hans Hartman, of Suite 48a, describes blockchain like this in his excellent “Visual1st Perspectives” post here:

A blockchain is a chain of connected blocks that each contain certain data, a unique identifier (“hash”) and a hash of the previous block. Unlike data stored in a central server, blockchain data is distributed and considered to be more secure. If someone changes or tampers with a particular block, it changes the block’s hash, breaks the chain and automatically notifies all blockchain participants. Think of a blockchain as a ledger that is distributed among the various blockchain participants.

This “distributed ledger” approach has the potential to eliminate middlemen, allowing creators to deal directly with clients, according to Don Carli of business intelligence firm Nima Hunter. Blockchain can be used to create “smart contracts” – probably the best-known is Ethereum – which are contracts converted to code, stored and replicated. They are stored transparently on a system and supervised by the blockchain network. The ledger monitors activities, like money transfers or goods being shipped. The contract could even enforce the contract by stopping the activity automatically if a condition weren’t met, like a late shipment of product.

“The digital copyright issue is critical to creators,” says Burke McCarthy, vice president, business development, Suntri Inc., and a former Eastman Kodak executive in the professional photography market. (Suntri is a company developing a superior blockchain operating system (BOS) that will enable users to design and build blockchain solutions to meet the particular requirements of their customer value delivery systems and strategies, according to McCarthy.) “For them, blockchain is a dream come true because it offers time-stamped proof of ownership;  images can be shared/sold immediately to anyone anywhere on the planet.

“Think of how this will impact the patent process,” adds McCarthy. “Instead of hiding an invention until it is patented, it can be share immediately to enable global collaboration.

“Blockchain, rather than cryptocurrency, will be what historians refer to years from now to categorize the substantial changes this technology is going to have on banks, insurance, lawyers, governments, real estate, and the International Monetary Fund,” says McCarthy.