Recently, I read the whitepaper by The Alliance of Independent Authors (ALLi) called, Authors & The Blockchain: Towards A Creator Centered Business Model which was published this past spring. The report was an eye opener in regards to the potential of this latest technology that could change how we do business in almost every sector of the market from finance to yes, even publishing. In fact, they refer to blockchain publishing as publishing 3.0 in this report. Now before I move on, I know what a lot of you are asking: Rachel, what the heck is blockchain? In short, it’s a digitalized and decentralized public ledger that records transactions made in cryptocurrency. And for those of you not sure what cryptocurrency is, it’s basically digital currency that is encrypted and not issued by a bank. This makes the currency more secure and cheaper to make transactions. Blockchain is the software that cryptocurrencies like Bitcoin and Litecoin were developed on. I encourage you to read the whitepaper that ALLi published and if you’re still confused about blockchain’s definition, check out this Youtube video created by Simply Explained.
Blockchain either excites or frightens business owners as well as governments with the promise of eliminating middle men as well as making business deals 100% transparent. Experts believe that in the next few years, blockchain will revolutionize every aspect of the economy. In fact Goldman Sachs, as well as JPMorgan Chase, have invested heavily in the new technology. So far only two companies called, Publica and Po.et have launched with the premise of independent publishing via blockchain. I’m sure there will be more on the way as this technology evolves.
The Problems That Could Be Solved With Blockchain
Social media expert Gary Vaynerchuk, predicts blockchain will be the next big thing and offers a warning, “It’s gonna eliminate all your margins…When you make money by being in the middle and the internet and blockchain come along and they’re actually the middle, you’re in trouble.” In other words, those who don’t provide value (literary agents) will lose in this new business dynamic. This benefits traditional authors because they get a 15 – 20% pay increase just from this one elimination alone. Here are more problems blockchain could potentially help all authors with:
- Copyright Disputes: Products (manuscripts) are time stamped.
- Piracy: Manuscripts are encrypted, so you can’t strip the DRM from the file.
- Sales Reporting: Once a transaction takes place the entire ledger is updated almost in real time.
- Late Payments: Payments are almost instant on blockchain because everyone was preapproved via cryptocurrency.
The Problems That Could Be Created By Blockchain
I wouldn’t be doing my job if I didn’t address the downside to this new technology, and some of it includes:
- Privacy Issues: The ledger is public and unchangeable so there is no real anonymity.
- Mistakes: Even the fastest and smartest computers make errors.
- Consumer Reluctance: There’s no telling if consumers (readers) will follow authors from retailers like Amazon. Also, there are several prominent voices within the financial sector calling cryptocurrency like Bitcoin, a scam.
- New Overlords: Though there is hope that this will democratize the industry, there’s also danger in that new companies will monopolize this technology.
The Unknown Variable: The Publishing Industry Itself
Does this mean the traditional publishers will get onboard with this new technology? Based on their response to the Kindle revolution in 2007, I doubt this will be implemented with any sort of speed. In fact, I see them kicking and screaming into this new way of doing business. It will most likely be the indie authors who yet again, load up their wagons and head off into this unknown frontier. The publishing industry may be interested in the money saving aspect of it, but I doubt they’ll know how to execute. Let’s be frank, many of them didn’t even know what metadata was a few years ago.
Blockchain has the potential to make things like fraud a thing of the past, and since the the publishing industry is rife with fraud I can see most authors welcoming this new transparency. For example, in May of 2018, it was revealed that a bookkeeper at a prestigious literary agency had stolen seven million dollars from the agency. This person had been stealing for years and apparently no one at the agency was paying any attention. *Cue eye roll* Also let’s not forget three years ago, when I talked about the case of Harper Lee, whose agent went to her nursing home and got Lee to sign over the copyright to the literary classic: To Kill a Mocking Bird. So fraud and theft runs deep in the publishing industry and it will only get worse as intellectual properties become more and more valuable. Blockchain won’t stop people from being shady but it will pull back the curtain and that’s what a lot of publishers and agents don’t want.
However, I believe it will be indie authors who will benefit the most from this technology because blockchain not only offers to make deals more secure but quicker. The more and more I look at it, blockchain is a positive move for the publishing industry all around, but the question still remains, will we be able to execute?