Tag Archives: management

Blockchain and AI copyright: A revolution in digital rights management

Blockchain and AI copyright: A revolution in digital rights management
The intersection of blockchain technology and artificial intelligence (AI) is an emerging frontier that holds great promise for addressing one of the most pressing issues in the digital age: copyright enforcement. With the proliferation of AI-generated content, the need for robust mechanisms to protect intellectual property rights has never been more critical.

This article explores how blockchain technology can provide innovative solutions to AI copyright challenges, offering a personal perspective on its potential supported by statistics and research.

The rise of AI-generated content

Artificial Intelligence has revolutionised content creation, bringing forth a new era where machines can produce music, art, literature, and more. AI algorithms, such as OpenAI’s GPT series, have demonstrated the ability to generate human-like text, while programs like DeepArt and DALL-E create visual art that rivals human artists. According to a report by MarketsandMarkets, the AI market size is expected to grow from US$150.2 billion in 2023 to US$1345.2 billion in 2030, reflecting the rapid adoption of AI technologies across various industries.

However, this surge in AI-generated content has raised significant questions about copyright ownership and enforcement. Traditional copyright laws, designed for human creators, struggle to address the complexities introduced by AI. Who owns the copyright to a piece of music composed by an AI? How can creators prove ownership and control the distribution of their work? These questions highlight the need for a new framework that can manage the unique challenges posed by AI-generated content.

Blockchain: A decentralised solution

Blockchain technology, with its decentralised and immutable nature, offers a promising solution to the challenges of AI copyright. At its core, blockchain is a distributed ledger that records transactions in a secure and transparent manner. Each block in the chain contains a timestamp and a link to the previous block, making it virtually tamper-proof. This inherent security and transparency make blockchain an ideal platform for managing digital rights.

One of the key advantages of blockchain is its ability to establish provenance and ownership. By recording the creation and subsequent transactions of digital content on a blockchain, creators can prove the originality and ownership of their work. This is particularly valuable for AI-generated content, where the line between human and machine authorship can be blurred.

Smart contracts and automated rights management

Smart contracts, self-executing contracts with the terms of the agreement directly written into code, are another powerful feature of blockchain technology that can revolutionise copyright management. These contracts can automatically enforce copyright terms, ensuring that creators are compensated for the use of their work.

For instance, an AI-generated piece of music could be embedded with a smart contract that specifies the terms of its use. Whenever the music is played, the smart contract can automatically collect royalties and distribute them to the rightful owner. This not only simplifies the process of rights management but also ensures that creators receive fair compensation without the need for intermediaries.

A notable example of blockchain-based rights management is the platform Audius, a decentralised music streaming service that uses blockchain to ensure artists retain control over their music and receive fair compensation. As of May 2024, the platform has has between 5 million and 6 million monthly active users, demonstrating the potential of blockchain to disrupt traditional industries and provide new opportunities for creators.

Challenges and considerations

While blockchain technology offers significant potential for AI copyright management, it is not without challenges. One of the primary concerns is the scalability of blockchain networks. As the volume of AI-generated content grows, the blockchain must be able to handle a large number of transactions efficiently. Current blockchain networks, such as Bitcoin and Ethereum, have faced scalability issues, leading to high transaction fees and slower processing times.

However, ongoing research and development in blockchain technology are addressing these issues. Layer 2 solutions, such as the Lightning Network for Bitcoin and Ethereum’s Optimistic Rollups, aim to increase transaction throughput and reduce costs. Moreover, newer blockchain platforms like Solana and Mantle are designed with scalability in mind, offering faster and more efficient networks.

Another consideration is the legal recognition of blockchain records. While blockchain provides a secure and transparent way to record ownership and transactions, the legal system must recognise these records for them to be effective in enforcing copyright. This requires updating existing copyright laws to accommodate blockchain technology and ensure its compatibility with legal standards.

The future of blockchain and AI copyright

Despite these challenges, the future of blockchain and AI copyright management looks promising. As both technologies continue to evolve, they are likely to become increasingly integrated, providing a robust framework for protecting digital rights in the age of AI.

One potential development is the creation of decentralised autonomous organisations (DAOs) for content creators. These organisations, governed by smart contracts, could provide a collective platform for creators to manage their rights, distribute their work, and receive fair compensation.

For example, an AI-generated artwork could be minted as a non-fungible token (NFT) on a blockchain, with the DAO managing its sale and distribution. The creator would retain ownership and receive royalties from secondary sales, ensuring ongoing compensation for their work.

Conclusion: A personal perspective

As an observer of technological trends, I am optimistic about the potential of blockchain to address the challenges of AI copyright. The decentralised and transparent nature of blockchain provides a robust framework for managing digital rights, ensuring that creators receive fair compensation and retain control over their work. While there are challenges to overcome, the ongoing development of blockchain technology and its integration with AI offer a promising path forward.

The rise of AI-generated content presents a unique opportunity to rethink traditional copyright laws and embrace new technologies that can better serve the needs of creators in the digital age. Blockchain, with its ability to establish provenance, enforce smart contracts, and provide a decentralised platform for rights management, is well-positioned to play a central role in this transformation.

As we move forward, it is essential for policymakers, creators, and technologists to collaborate and develop a legal framework that recognises the potential of blockchain and supports its adoption for AI copyright management. By doing so, we can create a more equitable and efficient system that benefits both creators and consumers, ensuring that the digital economy continues to thrive in the age of AI.

In conclusion, the integration of blockchain and AI represents a significant step forward in the evolution of digital rights management. By leveraging the strengths of both technologies, we can create a future where creators are empowered, intellectual property is protected, and innovation is encouraged. The journey may be challenging, but the potential rewards are immense, making it a worthwhile endeavour for all stakeholders involved.

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Silvergate Bank’s crisis: A wake-up call for risk management in crypto banking

Silvergate Bank’s crisis: A wake-up call for risk management in crypto banking

The cryptocurrency market has recently been shaken by a significant crisis at Silvergate Bank, a financial institution that specialises in digital assets. The effects of this crisis have been widespread and have caused a great deal of concern among investors. Shares of Silvergate Bank have experienced a sharp drop, hitting an all-time low of $4.86 on Friday, representing a decline of nearly 98% since the institution’s record high close in November 2021. As a result, the market capitalisation of Silvergate Bank has suffered a total loss of over $7 billion. The impact of this crisis has not been limited to Silvergate Bank alone. The wider crypto industry has also been affected, with major players such as Coinbase Global and Ebang International experiencing a noticeable drop of around 1% each. Additionally, even the popular cryptocurrencies Bitcoin and Ethereum have both taken a hit, experiencing a decline of roughly 4.8% over the past week.

The crisis at Silvergate Bank started when the bank delayed filing its annual report. The delay sparked a sell-off of Silvergate’s shares, triggering a domino effect across the crypto market. The situation worsened when Silvergate Bank announced that it had made a risk-based decision to discontinue the Silvergate Exchange Network, it’s crypto payments network. This caused Silvergate’s shares to tumble by nearly 50% on Thursday’s New York stock exchange. The fall in crypto stocks is a reminder that the crypto market is still highly volatile and susceptible to sudden shifts. The fact that one bank’s crisis can greatly impact the entire market is concerning. However, it is worth noting that this crisis does not necessarily indicate a fundamental flaw in the crypto market. Instead, it may be an indication that some players in the market, such as Silvergate Bank, were not adequately prepared for the risks associated with the market.

The Silvergate Bank incident highlighted some significant issues with the bank’s risk management and financial reporting approach. One of the key revelations from the crisis is that Silvergate’s bad debts were not its assets but its deposits. In simple terms, this means that Silvergate had been using its customers’ deposits to invest in risky assets rather than holding those deposits in more secure and stable investments. This is a major red flag for any bank, and it particularly concerns the context of a bank that focuses on digital assets and cryptocurrencies.

It has become evident that Silvergate, a financial institution dealing with digital assets, was not adequately prepared to handle the volatile market. As a result, their customers and investors have suffered significant losses. To avoid such situations, managing risk is critical to dealing with digital assets and cryptocurrencies. Banks must remain vigilant in identifying, assessing, and mitigating potential risks. There are several key areas that banks should consider in their risk management approach.

Firstly, banks should identify various risks of digital assets and cryptocurrencies, including market risks (such as price volatility), operational risks (such as security breaches), legal and regulatory risks (such as compliance with AML and KYC regulations), and reputational risks (such as negative publicity). Once risks have been identified, banks should assess the potential impact and likelihood of each risk. This approach will enable banks to prioritise risks and allocate resources accordingly. Banks should take steps to mitigate risks by implementing robust security measures, conducting due diligence on clients and counterparties, and diversifying their digital asset portfolios. Banks must monitor risks continually and adjust their risk management strategies accordingly. This may involve using risk metrics, conducting stress tests, and staying up-to-date on industry developments.

Alongside risk management, banks should also consider how to report their books when dealing with digital assets and cryptocurrencies. Banks need to accurately report their holdings and transactions in real time because the value of these assets can change rapidly. This may require specialised accounting software and the development of internal processes for tracking and reporting digital asset transactions. Moreover, banks may need to adapt their reporting practices to reflect the unique characteristics of digital assets and cryptocurrencies. For example, banks may need to report on the specific digital assets they hold and the particular risks associated with those assets. Banks may also need to provide more detailed disclosures about their digital asset holdings and transactions to ensure transparency with clients and regulators. Risk management and reporting practices are vital for banks that deal with digital assets and cryptocurrencies. Banks must proactively identify, assess, and mitigate risks while developing robust reporting practices that accurately reflect their digital asset holdings and transactions.

Ultimately, the Silvergate Bank crisis serves as a cautionary tale for banks and investors alike. It highlights the need for proper risk management, financial reporting, and diversification, particularly in the context of digital assets and cryptocurrencies. While the market for cryptocurrencies and digital assets remains volatile and unpredictable, those prepared to take the necessary precautions and invest wisely may still be able to succeed and grow in this exciting and rapidly-evolving industry.

In times of crisis, it is essential to remember the importance of diversification. Investors who have diversified their portfolios may be better able to weather the storm caused by the fall in crypto stocks. Emphasising this again, it is also worth noting that the fall of crypto stocks does not necessarily mean that cryptocurrencies themselves are inherently risky investments. While the crypto market can be volatile, it has also seen significant growth in recent years and is expected to continue expanding in the coming years. As such, investors interested in investing in the crypto market may want to consider doing so through a diversified portfolio that includes a range of different assets.

It is also important for investors to conduct thorough due diligence when selecting investments in the crypto market. This includes researching the background and track record of the companies and individuals behind the investments and analysing market trends and potential risks. By taking a careful and informed approach to investing in the crypto market, investors can better protect themselves from sudden market shifts and crises like the one experienced by Silvergate Bank and the broader crypto industry.

Source: https://www.benzinga.com/23/03/31239033/silvergate-banks-crisis-a-wake-up-call-for-risk-management-in-crypto-banking

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j