maximum limit of 1 megabyte for transaction data so large
files, like the Wikileaks cables, must be split across many
transactions over multiple blocks.
Is Open a Good Thing?
The blockchain underlying bitcoin, as with most other
early blockchains, is both public and open. This means
that anyone at any time may browse bitcoin transactions—and, in fact, anyone running a bitcoin node has a
full record of all bitcoin transactions ever made. Coun-terintuitively, this makes bitcoin a more secure and more
trustworthy ledger than a closed system could be.
Consider a scenario in which a global financial insti-
tution deploys a private blockchain on its own server
infrastructure to maintain financial transactions. This
means the financial institution itself controls all nodes
that perform transaction validations and add new blocks
to the chain. The first and most obvious effect of this
is that a logically singular source of authority has been
generated which, if compromised, allows arbitrary modi-
fications to the blockchain ledger. More perniciously, it’s
time-consuming and extremely expensive to operate a
network at a large enough scale to provide the same level
of redundancy provided by independent operators vying
to add new blocks to the chain. By one estimate, oper-
ators running bitcoin nodes currently consume around
4 terawatt-hours of electricity annualized, may grow to
consume about as much electricity as Denmark by 2020,[ 3]
and perform over 7 trillion hash computations per second[ 4] using specialized hardware.
In the case of bitcoin, no single person controls more
than a small piece of the servers validating transactions
and adding new blocks to the blockchain. New transactions are broadcast to all nodes on the network, making
validation of the transactions in a completed block trivial
for the other nodes on the network. To abuse the network
and block transactions to favor a specific user or invalidate transactions and allow double-spending of bitcoins
would (theoretically) require a single group to control
more than 50 percent of the total computing power
involved in computing new blocks. Even then, changing historical transactions would range from difficult to
impossible due to the periodic checkpoints embedded
in bitcoin’s source code that record the fingerprints of
specific nodes in the chain.
Bitcoin also benefits from providing a financial
Due to its origins as a timestamped ledger, blockchains are currently closely tied to financial interests and, to a lesser degree, document publishing. Another area that may benefit from adopting
blockchain protocols is digital rights management for musicians and other artists.
Blockchain could readily power a global ledger documenting creative works and the artists contributing to their creation—songwriters, producers, and musicians in music. The most immediate
impact of this is to prove ownership of rights for collection of royalties.
Things get exciting when smart contracts are added into the mix. One application of these smart
contracts might be to automate royalty payments to all interested parties. Buying or listening to a
song from a digital service provider, for example, could automatically result in payment records to all
who participated in the creation of the song. This mechanism, due to blockchain’s nature, is trace-
able and introduces a level of transparency sorely needed in such payment processes.[†]
Another use of this technology could come in consumers owning and sharing music they have
purchased. By storing the fact of purchase in immutable blockchain, there is a permanent record
that an individual owns certain rights (personal use, public use, etc.) for a specific piece of media.
This record of ownership can be used to enable sharing of media in a legal fashion. Back when CDs
were a popular format, you could lend a CD to a friend but then lost the ability to listen to that music
until it was returned. With blockchain, a smart contract could be implemented to fill the same lend-
ing function, with the same single-user-restricted access.
[†] “Songwriters Lose Out on Royalties”; The Wall Street Journal website; Accessed at
www.wsj.com/articles/songwriters-lose-out-on-royalties-1444864895 on Sept. 26, 2017.
DIGITAL MEDIA AND
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