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Offering Bitcoin Rewards for Turning in eBook Pirates, and Other Bad Ideas

Bitcoin and blockchain are the hot new buzzwords in tech, so much so that it is easy to find a double dozen startup using blockchains for the most ridiculous reasons. (For example, Binded/Blockai claims that blockchain can protect creator’s copyrights, even though that’s simply not true.)

Now the blockchain hype has spread into the anti-piracy industry.

Someone has had the bright idea of using bitcoin to pay informants that turn in ebook pirates. From the press release:

Custos Media Technologies has announced its participation in a new blockchain-based anti-piracy solution for ebooks, following the recent news that content protection giant Digimarc and ebook publisher Erudition are joining forces.

This new collaboration debuts the combination of Digimarc Barcode for digital documents and Custos’ infringement detection technology. This provides a more effective, reader-friendly way to
combat ebook piracy.

Erudition and Custos have worked closely together over the past year. The Stellenbosch-based media protection company provides technology that adds Bitcoin deposits to ebooks. These digital bounties enable Custos to rapidly detect piracy after the first copy of a file is shared.

Just so we are on the same page, here is how the process is described:

  • Imperceptible watermarks which do not affect honest users are embedded within eBook files
  • The watermarks contain a bounty which is a Bitcoin private key
  • Anyone with the freely-available extraction tool can decode the watermark and claim the bounty
  • Bitcoin allows the hunter to claim the bounty instantly and anonymously, from anywhere in the world
  • The publisher is immediately alerted the moment the bounty is claimed and the infringing customer (uploader) is uniquely identified

This is clearly one of those ideas that shows that no one really thought it through (see Verrit, Microsoft Tay, or O’Reilly closing its ebookstore for other examples).

The thing about bitcoin is that – in principle – bitcoin wallets are anonymous, and that means you don’t know who is actually getting the money. It could be that an actual informer collected the reward, or the reward could be going to the "pirate’s" buddy who is in on a scheme to get free money from Digimarc and the publisher.

The reward might even be going to the "pirate" who informed on themselves just to get the free money!

There is just no way this could be an effective anti-piracy tool; it is simply too easy for the "pirate" to create a phony identity to buy the ebook, and then collect the reward on themselves.

Not only will the publisher be out of money, they won’t even have anyone to blame.


image by zcopley

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Ingo Lembcke September 14, 2017 um 2:20 pm

A reverse pyramid-money-making-scheme? Me likey!
Pure financial darwinism: a corporation who bankrupts itself!
They could be better at it, than even Barnes & Nobles…

Nate Hoffelder September 14, 2017 um 2:47 pm


Chris Meadows September 14, 2017 um 11:06 pm

You’re only just now noticing this? I covered it back in January.

Nate Hoffelder September 14, 2017 um 11:43 pm

You wrote 1400 words without seeing the obvious flaw in the idea, and you’re going to fault me for forgetting about your post from January? That’s brave of you; I would have been kicking myself for missing it.

P.S. What’s really strange is that Bill Rosenblatt also wrote about it in January. I don’t recall either of your pieces. I wonder where my head was at the time.

Caroline B September 15, 2017 um 12:27 pm

I think you may have jumped to a premature conclusion here (which is admittedly amusing but a bit simplistic) – surely it depends on the level of the bounty as to whether this is indeed a flaw? If the bounty is more than the purchase price then that would be a problem but if it’s less then the pirate is effectively losing money (although is getting a discount… but then this is likely to be a once off as one would presume their accounts would be blocked at some point, depending on where they are making the purchase).

There are also more specific scenarios where as a publisher, I can see this being useful regardless of the above e.g. higher bounty on embargoed titles or distribution to specific lists / recipients within organisations (e.g. colleges, universities). Here the recipient has a strong disincentive to share illicit copies because they could potentially face serious recriminations via their employer or institution.

Nate Hoffelder September 16, 2017 um 9:15 pm

Th reward is going to have to be big enough to be worth the hassle of collecting, which means it will be worth cheating.

"one would presume their accounts would be blocked at some point, depending on where they are making the purchase"

I don’t see that happening. The thing is, we already have companies using digital watermarks to identify pirates. I have never heard of a publisher following through on any type of punishment. I’ve never read about someone getting banned from a retailer as a result of piracy (you would think that would make the news, but no).

Chris Meadows September 17, 2017 um 2:06 am

Don’t recall if I mentioned this in my article, but when I was talking to the Custos representative, he said that the amount of the reward would probably be limited to the purchase price of the book.

BDR September 15, 2017 um 9:24 pm

Perhaps the most obvious flaw in this is that, since the watermark can be viewed, it can be removed.

Nate Hoffelder September 16, 2017 um 8:16 am

Yes, any reward offer would have to be visible, which means the pirate would be able to remove it.

Good catch! that’s an even bigger flaw than the one I found.

Chris Meadows September 16, 2017 um 7:17 pm

Brave of you to admit that, since that’s a flaw I specifically pointed out in those 1,400 words you mention. Which you apparently read without seeing the obvious flaw I pointed out. 🙂

Nate Hoffelder September 16, 2017 um 7:53 pm

BDR talked about the visible notice, but my take of what you wrote was that you discussed how a pirate could remove the invisible watermark. I don’t think they’re the same thing (and yes, I did go read your post after I first saw your comment).

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NightOwl September 24, 2017 um 11:20 pm

So how do i turn in all of scribd? ?

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