Blockchain technology: you’ve probably heard the term a few times, but perhaps haven’t wrapped your head around what the technology is or what it does, even after reading articles or watching explanatory videos. But if you believe the hype, blockchain is going to change the world.
At its most basic level, blockchain is an innovative way to keep accurate and secure records; it was invented to track transactions of the cryptocurrency Bitcoin, and therefore it has been written about mainly as a game-changing technology for finance. It is purported to be secure and resistant to hacking or interference because of the way it is built—it is a decentralized network, and no one corporation or entity controls it. Ian Kahn summed it up well by saying:
“Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved. Above anything else, the most critical area where blockchain helps is to guarantee the validity of a transaction.…”
So what does this have to do with writing and publishing? Recently, Orna Ross at the Alliance of Independent Authors published two parts of a three-part series, Indie Authors: Are We Ready for Self-Publishing 3.0? In part two, she argues that blockchain technology presents an opportunity for authors. She points to the following areas:
- Privacy and direct transactions. Authors can use the private and secure transactions provided by blockchain technology to deal directly with readers and to eliminate middlemen such as distributors and retailers. Readers can make payments to authors directly and safely, without credit cards, payment processors, or others taking a cut of the transaction.
- Smart contracts. The need for lawyers and rights negotiations could be minimized because smart contracts, using blockchain technology, can automate rights, licensing, delivery, and payments to everyone involved in each transaction. Such systems would also allow authors to more easily pay service providers from a books’ sales proceeds—or to reward fans.
- Piracy and copyright. Blockchain could also make the piracy and unauthorized distribution of digital files more difficult.
Here’s how to imagine the potential (far into the future): What if an online market similar to Amazon existed, but it was a decentralized, blockchain-driven system (meaning no retailer takes a cut of the action)? Payment for content, books, or licensing would go directly to authors, as well as whomever was specified by the author in the smart contract associated with the book. Ross says this is the most exciting opportunity presented by blockchain—to “take out the middleman and [put] authors first in the value chain.”
The music industry has already seen its first experiment with decentralized purchase transactions. Here’s one user’s experience of the system. Not pretty so far—the system is so labor-intensive for the user that it’s unimaginable that even hardcore fans would prefer it.
The key question we have: While blockchain may have the ability to power efficient and secure transactions between private individuals and to automate contracts and licensing, does that solve the critical problem facing authors today? How will blockchain affect demand and discoverability, assuming it does so at all?
Professor John Maxwell at Simon Fraser University wrote recently in a private news group, “The promise of blockchain is certainly intriguing, but it sometimes sounds like unicorns for all. Having an infrastructure for micropayments is one thing, but it doesn’t solve some other structural problems that publishers—and, even more, writers—face. Most prominent among those is that the supply of writing has gone up incredibly while the demand for that writing has grown little, if any. Which means that the market for any written work is incredibly noisy and oversupplied. … What we see as a response is increased emphasis on marketing, discoverability, brand/reputation/customer relations management. These conditions are, it seems to me, why big data and big networks (e.g., Google, Amazon) have succeeded at such scale. Those patterns are an effect, not the cause, of the situation. In other words, micropayments for writers might sound appealing, especially if you’re a writer. It doesn’t make for a better market for written work, though.”
Bottom line: Some have said that blockchain is a solution in search of a problem. So far, we don’t see blockchain as meaningfully changing business models for artists and creators. Micropayment and patronage systems have never saved the day on a large, commercial scale (see Medium for the latest failure). And smart contracts can be helpful only in cases where demand for the content already exists. But if you’re curious to experiment with or observe a blogging and social media community driven by blockchain, we recommend signing up for Steemit, which is still in beta.
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
