#2 - IP Blockchains, the Counter-Balance to Generative AI

I like to cover important updates in the world of computing.

This week, IP Blockchains…

According to web3 startup Story, Intellectual Property (IP) is a multi-trillion-dollar asset class (the biggest asset class), and it can only be unlocked by onramping to the blockchain.

Sand Hill Road agrees… Story just raised $80 Million at a $2.25 Billion valuation in a round led by Andreessen Horowitz.

There are a couple of major problems with Intellectual Property today that need addressing:

• Capturing ownership and defining how others can use your work is tedious. Often lawyers need to get involved. It’s led to a system where only the top 1% of creators can afford to properly set up licensing agreements for their work.

• In a post-AI world, creators are losing their incentive to create. People use ChatGPT instead of Google; MidJourney instead of graphic designers. In many cases, these AI models are trained on copyrighted data, but proving that is hard.

Story’s solving this by building “the world’s IP blockchain”.

Be you a developer, author, musician, researcher, chemist, designer or architect, Story wants all the IP you generate to be registered on their blockchain with an API that other developers and creators can interact with.

The idea is that each piece of IP becomes a ‘lego brick’ that other creators can use as a building block for their own creations. All the creator needs to do is specify how others can use that IP and what they are owed if they do.

Both the original creator and the creator of the derivative work benefit from the permissionless licensing and automated royalty payments. They never need to interact with one another to negotiate terms and transact funds.

To interlock code and law, Story uses the Programmable IP License, a custom-designed universal license agreement with out-of-the-box configurations.

Chris Dixon — a General Partner at a16z who wrote an awesome book on web3 called “Read. Write. Own.” — paints a pretty exciting picture for how an IP blockchain could transform the world of media.

Traditional media businesses need to restrict things. But the internet likes to copy things. That’s why these businesses have been dying a slow death.

If you’re the New York Times, you need to charge readers somehow, so you stick your content behind a paywall. But you also need people to see your content and want to read it in the first place, so you need to give some of your content away for free.

This is the ‘Attention-Monetization Dilemma’.

By contrast, the video game industry has embraced the internet age and adapted to it successfully. The biggest games today, like Fortnite and League of Legends, are free-to-play and make enormous amounts of money via in-game purchases, ads, and other forms of monetization.

IP Blockchains in web 3.0 may be the business model innovation the media industry has needed since web 2.0. If it works, then like any ground-shifting innovation, it’s both an opportunity for fast-moving innovators and a threat to slow-moving incumbents.

Sources:

• Learn Story (Story)

• Team Story Documentary (EO)

• Story Raises $80M at $2.25B… (Tech Crunch)