The growing opposition from regulatory bodies to Facebook’s plans to launch its own cryptocurrency highlight widespread concerns over how technology companies make use of personal data for profit at the expense of the consumers’ privacy.
People now realize that the mostly free services they obtain from social media platforms and other tech firms come at a huge price, namely the risk of losing their rights to their own data and control over it.
A Taiwan-based startup, Bitmark, aims to secure users’ property rights over the information and assets they share on digital platforms.
Using blockchain – a distributed, immutable ledger that facilitates the process of recording and tracking transactions – Bitmark records ownership and property rights over digital assets, such as health data, art, digital collectibles, song rights, and medical records.
The company, founded in 2014, has created the Bitmark Digital Property System, a framework by which digital property titles, or “bitmarks”, are assigned to digital assets and recorded in an open-source Bitmark blockchain.
“Property is about ownership and control,” said Bitmark’s co-founder and chief executive Sean Moss-Pultz told EJ Insight in an interview.
“What the Bitmark Digital Property System does is to uniquely identify data as an asset, encode its title, and record ownership changes over time in a blockchain. Based on this information, different parties can agree upon control.”
Working like an intellectual property office, the Bitmark Digital Property System issues and enables the transfer of property titles of digital assets within the system, keeping a clear record of digital data’s provenance and the chain of ownership history.
The titles, called bitmarks or “Bitmark Certificates”, contain ownership information over an asset, “which can be anything – photos, files, raw data, even physical items if you want”.
Last year, Bitmark partnered with Taiwan’s online streaming music operator KKBOX to enable the recording and tracking of musicians’ assets.
Musicians who license their work will have their song rights recorded by Bitmark, then the record will be used for automating the payout of artist royalties, as well as the trading and licensing of the song rights.
This March, Bitmark also collaborated with Taiwan’s CTBC Bank and Health2Sync to launch the HealthPass mobile app, which allows users to secure and control their medical records, while allowing researchers to benefit by gaining access to patients’ record database.
Single asset record
As the firm explains, digital assets and data are registered and encrypted as bitmark certificates, which contain information including a fingerprint hash of the asset, registrant, the name of the asset, a “nonce” which numbers the particular issuance of the asset, etc.
After verification, the bitmark certificates are placed on the blockchain; there can only be one asset record for each digital property on the blockchain.
For a registered asset to be transferred, the previous owner will have to create a new transfer record, which points back to the original issue record, and shows the new owner of the asset.
For assets that have fractional ownership, Bitmark also allows for a single digital property to be owned by more than a quintillion Bitmark accounts, which link back to the property that has the chain of ownership history.
When legal disputes such as conflicting ownership claims arise, Moss-Pultz said the bitmark certificate can be used as evidence in a court of law.
“There have been a few cases that show a secure timestamp as being admissible for courts, most recently in China,” he said.
“As long as you can show signatures on a contract that was dated, you’re good. The bitmark certificate will definitely help provide high-quality evidence.”
Bitmark creates its own blockchain, which is designed specifically for registering, tracking, and trading property rights.
But unlike other public blockchains like Bitcoin (BTC), Bitmark does not issue its own cryptocurrency. Instead, it uses bitcoins to reward “miners”, which validate new transactions and record them on the blockchain.
In order to transfer a property right, the previous owner must pay a small transfer fee, which incentivizes the miners to include the records in their new blocks.
Current fees are 0.0002 BTC or 0.002 Litecoin (LTC), or about US$1.94 and 18 US cents at the time of writing (Bitcoin and Litecoin are trading at US$9,739 and US$89 respectively at 9:00 a.m., July 18, Thursday).
“We felt that Bitcoin was the best cryptocurrency to use to reward those that secure our blockchain,” said Moss-Pultz.
“In fact, the original idea for Bitmark came from our excitement with Bitcoin as a new type of money. If there was going to be digital money, we thought, then there must be digital property, too.”
The meteoric surge in the value of cryptocurrencies has attracted global media attention and growing interests in blockchain technology from enterprises. However, blockchain technology is just beginning to gain ground in the mainstream market.
Limits of blockchain
Asked how Bitmark intends to drive mass adoption of its system, Moss-Pultz said: “You have to start from solving problems that people have now that cannot be addressed with current solutions. And you also have to calibrate those problems with the actual present limitations of blockchains.”
He gave an example. “In the public health studies that we run and also the work that we’re doing around clinical trials, if you can get a few thousand people to participate, these are massive numbers. Now, having a few thousand transactions per day is trivial for a public blockchain. So this sort of application is really good for the current limits of the technology.”
“But if you want to do something like high-speed payments, à la VISA, it really doesn’t make any sense right now,” he added.
Having said that, Moss-Pultz agreed that technologies like the Lightning Network are extremely promising for public blockchains like Bitcoin, but it still takes time to work out the bugs and get the user experience up to a level where regular people are willing to accept and use it.
Moss-Pultz, an American, has been living in Taiwan over the past 15 years. Prior to Bitmark, he was a senior executive at EMQ Limited, a Taiwan-based financial technology startup.
He considers Taiwan as one of the world leaders in hardware manufacturing. In recent years, the island has been working towards integrating software, such as the Internet of Things (IoT), software development technology, and blockchain technology.
Moss-Pultz said he believes Taiwan could have some advantages when it comes to experimental technologies like blockchain, due to its long history of “low-level firmware and hardware development”.
“The development of a blockchain is quite similar to the development of firmware that runs on hardware,” he said. “For example, when a vendor ships a certain type of chip, it is extremely difficult to update the software after it’s been deployed into hundreds of millions of devices.
“The expertise that you would need to be able to keep that system secure would actually be very similar to the expertise needed to deploy a public blockchain.”
While many talented people are moving into the blockchain space, Moss-Pultz pointed out that issues related to finance are holding back Taiwan and the companies trying to operate on the island. “For example, even services as popular as Stripe and PayPal cannot work in Taiwan due to the regulatory environment,” he said.
For blockchain technology to prosper in Taiwan, Moss-Pultz said the island needs “cutting-edge financial regulation that allows failure to happen, which I don’t see that in Taiwan”.
“My personal hope is that the government will see that public blockchains and cryptocurrencies represent a once-in-a-generation opportunity for Taiwan.”
– Contact us at [email protected]