We’ve been talking a lot here about blockchain applications for transaction processing in the music industry; in fact we had a panel on it at last week’s conference in NYC.  Yet the latest application of blockchain technology to the media industry, from Custos Media Technologies, has nothing to do with music or royalty transaction processing.  It has to do with e-books, and the application is copyright monitoring.  What does this have to do with blockchain?  It enables users to collect bounties for finding potentially infringing files, and the bounties are paid in Bitcoin.

Custos’s technology, which spun out of the MIH Media Lab at Stellenbosch University in South Africa, embeds unique watermarks in EPUB-formatted e-books.  It runs a watermark detection service that bounty hunters (yes, the company uses that term) can use to find watermarked files and report them, in return for a private key to a Bitcoin wallet.  When a file is reported, Custos returns the identity of the original purchaser to the e-book distributor, which can take legal action or whatever other steps it sees fit.

Custos’s COO Fred Lutz says that the solution is targeted “through online forums such as Reddit and Twitter” to “college-age users who are short on cash and long on time, and who are typically already involved in piracy communities.”

I first met the Custos people and learned about their solution at a conference over a year ago; their initial target was the movie industry.  They have adapted their scheme to e-books in partnership with an e-book distributor, UK-based Erudition Digital, which will launch the service on February 7.  Erudition produces multimedia e-books for authors and sells them on its own site and on Amazon.  (The titles sold on Amazon aren’t watermarked.)

Custos has put a considerable amount of thought into addressing ways that their system can be hacked.  First, they are aware that there is no such thing as a 100% robust watermark for e-books that are published in a text-markup format like EPUB. It is much easier for visual or audio data than for e-books to create a watermark that causes perceptible damage to the content if someone attempts to remove it.

Techniques used to embed invisible watermarks in e-books include things like embedding hidden data in illustrations, algorithmically altering content other than the actual substance of the book (such as text on a copyright page, index, or page header/footer), inserting non-printing characters, and using identifiers as input to kerning algorithms (for computing the spacing of characters in a line of text).  A worst-case solution to any of these techniques is to strip out everything except the actual text and basic markup (paragraph, chapter, bold, italic, etc.).

Custos addresses this by embedding multiple redundant watermarks in each e-book file using different types of techniques.  This way, though it’s possible for a hacker to strip out a watermark, the hacker can’t be confident that all of the watermarks have been removed.

Another possibility is for a bounty hunter to claim a bounty on a file and then post it in other places online.  Custos’s technology doesn’t really deal with this.  It’s only possible to claim a bounty on a given file once.  Custos’s technology is not capable of differentiating among bounty hunters (indeed, it guarantees their anonymity) or among locations where files are found; in general, the scheme is designed to limit opportunities for users to “milk” the system for extra bounties.

The company admits that this is a limitation in the system’s ability to find potentially infringing files, but it adds that the information it does collect on which files are found where is valuable in itself. This scheme does improve on existing methods, such as those of Digimarc and BooXtream (and various others in the video arena), of watermarking files and then crawling various places on the Internet to detect those files.  Bounty hunters can find files in places where those crawlers can’t access, such as within password-protected cyberlocker accounts.

There’s also the possibility that a hacker can reverse engineer the watermark detection process to reverse engineer the watermark, or worse, claim a bounty on a non-watermarked file (or no file at all).  Custos provides the detection function as an online service, which makes it more difficult to reverse engineer.  It also intends to offer the detector as a desktop app that can be used offline.  This should increase users’ comfort levels about anonymity, but it also increases the scope for reverse engineering.  The downloadable executable will be hardened against reverse engineering using techniques similar to those used in DRM clients.

Finally, it’s worth mentioning that it doesn’t matter where a bounty hunter finds e-book files: they can be in email messages or on someone’s Google Drive or iCloud account as well as on BitTorrent or a cyberlocker.  Because Custos takes pains to make the bounty-claiming process as anonymous as possible, one could imagine a few scenarios where people will “sell out their friends” for some quick, anonymous cash.

But this is line with the nature of watermarks as “social DRM.”   The idea of social DRM is to put the onus on users to determine how much they trust someone before they will share data with them.  Custos’s scheme doesn’t change that dynamic.  In fact, Custos for eBooks is designed almost as a sociological experiment in turning pirates against one another; in that sense, it’s more like social DRM taken to the next level.  That’s the real breakthrough in this technology; the blockchain connection through Bitcoin payments is a side issue.

Yet there are many so-called pirates out there who do it on principle rather than because they can’t afford to pay for content, want to sample before they buy, or even because they don’t feel like paying for it.  Back in 2015 I suggested to Custos that they invest in perimeter security to guard against denial-of-service attacks on their servers.  Once Custos for eBooks launches, unwanted attention from “piracy communities” should grow in proportion to its success.