If adopted, the proposed ERC-1190 Ethereum standard could have important applications for creative rights and digital assets.
A Non-Fungible Token for the Art World
ERC-1190 is a non-fungible token for royalty payments. Non-fungible means that each token represents something unique, such as an image or a song. (See the code on Github).
Imagine creating a sculpture or a gaming object, which you now want to share with the world. The proposed token would allow you to share the artwork and to profit from it by easily keeping track of any revenues generated from it. Specifically, an ERC-1190 token would allow you to sell the art’s creative license, sell its ownership license, or to rent it to a third-party for a fixed period of time.
This article will outline how the proposed ERC-1190 token standard can help artists focus on creating art, while reaping the financial benefits of their artwork passively.
Tamper-Proof Records of Art Transactions and Revenue Owed to the Artist
Put yourself in the shoes of an emerging painter. You can showcase your work at some of the thousands of art shows around the world each year. With talent and some luck, your paintings could be exhibited at an exclusive art fair, such as the privately-owned Art Basel, which maintains an excellent regional and global profile and showcases works for sale by both established and emerging artists. You would like to sell one of your paintings to the highest bidder.
In ERC-1190 terms, you own both the asset’s creative license and its ownership license, and you would like to sell its ownership license while retaining the creative license. The buyer of the ownership license would be entitled to possession of the painting and most of the revenues from any future sales. However, the creative license you retain will ensure that you receive a fixed percentage of any revenues from future sales (for the example at hand, let’s say the creative license entitles you to 10% of revenues from any future sales).
Using an ERC-1190 transaction would not necessarily bypass the traditional method of selling artwork. For an emerging artist, a buyer would likely want to see a work of art before buying it. A more established artist may be able to conduct an auction on the blockchain alone.
Let’s say you sold your painting to the highest bidder at a traditional art fair, but recorded the sale by transferring an ERC-1190 token representing the artwork. Recordkeeping for the sale and for any future movements of this work of art and any revenues received from them is now easily accessible to you on the blockchain.
Now, let’s say the buyer of your painting sells it to an international marketing agency at a markup. As the creative license holder, you are entitled to 10% of the revenues. If the sale to the marketing agency is conducted on the blockchain, you would receive the funds seamlessly (without even knowing about the sale). If the sale is conducted in a traditional setting but recorded on the blockchain, you will be notified on the blockchain and will have a right to claim 10% of the revenues from the recipient. Use of the ERC-1190 would therefore remove information asymmetry and contracting friction, benefiting artists
The international marketing agency now rents your painting to an event company for a week. The event company will display it at a multilateral political event. The rental license associated with the ERC-1190 token will show this rental, its time period, and its price. The holder of the ownership title will receive the majority of the rental income. However, as the holder of the creative license, you will get a percentage of this rental revenue as well.
For Established Artists, Sales Could Be Conducted Entirely on the Blockchain
An established artist’s work often appreciates in financial value over time. Art collectors and art investment companies commonly hold artwork as an investment. This art is not placed on walls or displayed. Rather, it is stored in a secure location. Sometimes, even when the art is sold, the only thing that changes hands is the ownership documentation, and the art remains stored in the same location.
In these cases, using an ERC-1190 could open up this market to anybody by conducting sales entirely on the blockchain, reducing the roles of private auction houses and word-of-mouth sales. This would benefit art collectors (by giving them a more liquid market for sales), art enthusiasts (by allowing them to buy art more easily) and artists (if they hold on the creative license, they would be entitled to revenues from future sales)
What about Selling, Gifting or Bequeathing the Creative License?
Until now, this article has only considered situations in which the artist holds on to the creative license. The artist also has the option of selling the creative license. Once the creative license is sold, the new holder of the creative license would receive a cut of all future sale or rental revenue.
Due to the fragmented nature of the art world, it often takes decades for talented artists to become known. Indeed, several of the best known artists today were not appreciated in their time. For example, Vincent van Gogh was poor and virtually unknown when he was alive. His work was not widely viewed or appreciated until after his death. It wasn’t until after his death when people started to view and appreciate his work. Last year, a single van Gogh painting sold for $81.3 million.
Using an ERC-1190 token, an artist can bequeath their creative license to future generations even if they have sold the ownership license (and therefore no longer own the underlying work of art). If someone in van Gogh’s family or town held the creative license to one of his paintings today, they would receive significant revenues every time that painting was sold or rented.
Transforming the Art Market
ERC-1190 could allow artists to focus on creating art while knowing their financial interests are protected. Those who collect, trade, market, display or appreciate art could also focus on what they do best, and benefit from secure transaction records and more accessible, liquid markets.
Click here to check out the code.
Click here for another explainer article.
Click here for a brief, simple explainer video.
The ERC-1190 token standard has been proposed by Aalim Khan & Shaan Ray.
A hashgraph is a patented algorithm that promises the benefits of the blockchain (decentralization, distribution, and security through the use of hashing) without the drawback of low transaction speed. It was created by Leemon Baird and is the intellectual property of the Swirlds Corporation, which Baird founded.
While Bitcoin allows for approximately 5 transactions per second and Ethereum allows for approximately 15 transactions per second, a hashgraph can process thousands of transactions per second. This article will discuss how the hashgraph works and if it could rise as an alternative to the blockchain
Gossip about Gossip
The hashgraph algorithm operates through two techniques.
The first technique is used to share information and is called Gossip about Gossip.
To understand how it works, imagine five members: A, B, C, D, and E. Each member starts with a transaction, which results in an ‘event’. Then, each member calls another randomly selected member and the two share their transaction history. For example, D calls B and shares D’s transaction history with B. This type of call happens repeatedly, with each member randomly calling another member and sharing its transaction history. So, B now randomly selects another member (let’s say C), and shares its transaction history, which includes D’s transaction history. Simultaneously, E may have called A, and so on. Each call results in an event, and each event holds the hashes of all previous blocks.
The graph of these events looks like a tree:
The second technique of the hashgraph is Virtual Voting, and its purpose is to reach a consensus on the order of transactions. Here’s how it works: first, the events are divided into rounds. The hashgraph algorithm has a definite mathematical answer for when a round is created. Here, for the sake of simplicity, imagine that a round has approximately ten events. Now, each member votes to determine which event should qualify as a ‘famous witness’. To understand how this happens, imagine that each of the members with an event in the next round looks backwards to each event in the current round to see if it can trace its lineage back to the current round’s event. If it can trace its lineage back to an event, it votes yes for that event, and if not, it votes no. The current round event with the most votes is crowned the famous witness for the current round, and provides the definitive order of transactions
Private & Permissioned
As discussed earlier, the hashgraph algorithm has one major advantage over blockchain technology: speed. However, the hashgraph is used in a private, permissioned setting. Anybody can join Bitcoin, Ethereum, and other major public blockchains as a node. On the other hand, each node on the hashgraph has been approved by the network’s administrator. Additionally, unlike the number of nodes on a blockchain at any given time, the number of nodes on the hashgraph is known by the network. Therefore, each node’s identity is known, and can be trusted. This is why the hashgraph is so fast.
However, critics note that it is unfair to compare the speed of the hashgraph algorithm and blockchain protocols, since many of the latter are public and permissionless
Hedera Hashgraph is the Public Version of the Hashgraph
The Hedera Hashgraph project is the most prominent effort to open the hashgraph algorithm to the public. Swirlds has licensed the hashgraph algorithm to Hedera Hashgraph. Swirlds will receive a 10% licensing fee from Hedera Hashgraph’s revenue.
By creating a public network, Hedera Hashgraph will lose the speed advantage of a private, permissioned setting. It will compensate for this by adopting a consensus mechanism that is very similar to the Delegated Proof of Stake mechanism, which I wrote about earlier. The network will be governed by a council of 39 trusted members, from various industries and geographies
The hashgraph is an innovative new take on using decentralization and hashing to create a fast, distributed ledger than can process thousands of transactions per second. Though the hashgraph is a patented algorithm used in private, permissioned environments, the Hedera Hashgraph project seeks to create a public hashgraph network that it will open to developers. In adapting the hashgraph algorithm for public use, Hedera Hashgraph adopted a consensus mechanism that is similar to the Delegated Proof of Stake mechanism on the blockchain.
Once up, Hedera Hashgraph’s network will be governed by a trusted council and will offer the ability to create decentralized applications using Java. These traits will likely attract interest from enterprise users and crypto enthusiasts alike.
The multi-billion dollar video game industry is booming: it is growing at several times the rate of the overall economy. The industry generates revenues from gaming content, in-game purchases, and hardware and accessories for better gameplay. Games are played on computers, mobile devices, and dedicated gaming consoles.
Games can be organized by gameplay characteristics, objective type, and subject type (for example, sports, action, or racing).
This post seeks to provide non-gamers with an overview of the industry’s most commonly used abbreviations: FPS, RTS, MOBA, RPG, MMO, and MMORPG (among others).
FPS: First Person Shooter
Action games are currently the most popular genre of games, and FPS games form the most popular sub-genre within action games. FPS games feature three dimensional environments and are centered around weapon-based combat in the first-person perspective (so that the player sees the environment as the character would see it).
TPS or Third Person Shooters are similar to FPS games, except that the player views the character they are controlling from behind.
RTS: Real Time Strategy
In RTS games, players maneuver units under their control to defeat their opponents’ assets and secure key areas on a map. In most environments, it is possible to create more population units and to build civilian and military structures within the game. Collection of a resource is usually a major key to achieving these goals. For example, controlling a gold mine within a game allows a player to fund the construction of buildings and the creation (or training) of new population units, which are in turn helpful in future missions. The tasks a player must perform to succeed in an RTS game usually grow in complexity as the levels progress.
MOBA: Multiplayer Online Battle Arena
In MOBA games, the player controls a single character in a team, which competes with other teams in an environment. The objective is usually to destroy computer-generated entities and to defeat other teams in the environment. In most MOBA games, each player assumes a specific role on the team. Various roles exist in these environments. For example, ‘support’ roles provide peripheral assistance to a team and its allies, for example by distracting or slightly harming enemies while the central members of the team fight them.
MOBA games are a fusion of action games, role playing games and real time strategy games. MOBA is often referred to as ‘A-RTS’ or action real-time strategy, though ‘strategy’ in this case refers to how a team collaborates and plays the map to succeed.
RPG: Role Playing Game
In RPGs, a player controls the actions of a character in a well-defined fantasy or science fiction universe. Players can often do things that are not possible in real life. The aim is usually for the player to complete a series of quests to reach the conclusion of a central storyline. In these environments, character development occurs through narrative elements and storytelling. Most RPGs include comprehensive 3D experiences.
MMO: Massively Multiplayer Online
MMO games usually feature enormous persistent open worlds and have thousands of users playing on the same server. These games require network-capable platforms such as smart phones, computers, and internet-connected game consoles.
In MMOs, players can cooperate and interact with one another on a large scale. There are MMOs across a range of different gameplay types and genres. MMOs can be FPS, RPG, or RTS, across fields as diverse as combat, sports, racing, social, and others
MMORPG: Massively Multiplayer Online Role Playing Games
MMORPGs are a combination of MMOs and RPGs. They feature very large numbers of players interacting with one another in a constantly open virtual world.
The player assumes the role of a character and can collaborate or compete with other players in the game’s persistent world. The world continues to exist and evolve while the player is offline or away from the game. Popular MMORPGs are based on fantasy themes that include elements of crime, sorcery, and science fiction. Some MMORPG communities have developed their own sub-cultures that have their own slang, influencers, and social rules.
As the video game industry continues to grow rapidly and globally, these game genres will continue to evolve. As computing power grows and as virtual reality and augmented reality technology becomes mainstream, more complex gaming environments will become possible.