Virtually Mine
There has been an evolution of ownership from physical objects to digital assets - despite the limitations of digital ownership. Flow, a new blockchain technology, and Cadence, a programming language, together may enable true ownership of digital assets, in a way that mirrors physical ownership.
This article was first published in The Mint. You can read the original at this link.
Since our notion of ownership came to being in the context of physical objects, we defined it in terms of the control we can exert over objects we can touch and feel. When we extended these concepts to the intangible using intellectual property laws, we placed a value on ideas and concepts by allowing creators to exert authority over things that were not (nor had ever been) within their physical control. With that, the idea of ownership extended beyond actual possession—to legal control.
Renters … not Owners
If intellectual property law messed with our traditional notions of ownership, the digital revolution upended it. Not only did it unlock new ways in which existing intangible property could be experienced and shared, it gave us brand-new forms of digital property to interact with.
But digital plays by different rules, and even though these new systems of creation and storage opened up a host of new opportunities for digital creators, monetization proved to be a challenge. Since digital assets can be replicated perfectly without effort, counterfeits can not only be easily generated, they are indistinguishable in all respects from the originals. In order to retain control over their works, creators were forced to resort to increasingly complex licensing regimes and digital rights management technologies to make sure that value wasn’t siphoned away.
Today, our content systems are locked down so tightly that, even though we might have legitimately purchased the eBooks in our digital library, this is no guarantee that we will not wake up one morning to find that any one or all of them have vanished from our virtual bookshelves. Even though we have access to more than a lifetime’s worth of music and movies, our enjoyment of that catalogue depends on whether we’ve paid our subscription fees.
The truth of the matter is that as much as we might believe that we ‘own’ our digital assets, in reality, we just rent them (though some would argue this is not a bad thing).
The Blockchain Alternative
I used to believe that these trade-offs were the inevitable consequence of a world that has become increasingly digital. Since digital goods can be reproduced so easily, strict protections like this are only to be expected. But while all this might once have been true, new evolutions of blockchain technology have made it possible for us to imbue digital assets with properties that closely mirror physical ownership. This, coupled with the fact that the blockchain makes it possible for computers that neither know nor trust each other to agree on a shared truth, means that we can create markets in which these digital assets can be traded in ways that closely approximate the physical world.
Bitcoin, the original implementation of blockchain technology, demonstrated how these features could be combined to develop an alternative financial system. By using a fungible token that served as a store of value, it demonstrated that it was possible to buy and sell goods and services without relying on a centralized ledger for the settlement of transactions. More recently, these principles have been adapted to create non-fungible tokens (NFTs) that have an assurance of uniqueness closely approximating real-world physical assets.
In a previous article in this column, I admitted to being less than enthusiastic about the promise of NFTs. Unlike Bitcoins that are valuable assets in themselves, I pointed out that most NFTs simply link underlying assets with owners:
Even though your purchase of an NFT might imply that you can claim ownership over the underlying asset, your token cannot be used to exercise any of the rights commonly associated with ownership - such as preventing someone from accessing it or seeking rent for its use.
Flow
This is why I have been particularly excited with the development of Flow, a new blockchain designed from the ground up to address these very issues. There is no better explanation of Flow and the specific problem it is trying to solve, than this TED Talk by one of its founders, Roham Gharegozlou:
For the more technically minded, the Flow Primer gets into the details of how it all works and this (looong!) post by Packy McCormick does a great job of putting it all into context.
While it has many unique features— such as consumer-friendly onboarding, multi-role architecture and upgradeable smart contracts—what impressed me most about Flow was the fact that its has developed a new resource-oriented programming language called Cadence that makes it possible for digital ownership of assets to closely conform to the physical.
We can be owners…
The innovation that Cadence brings is in allowing ownership attributes to be tracked by the language itself. This means that not only does the code placed on the blockchain describe the asset in its entirety, it can also describe the properties associated with it. And because it is designed to function without reference to external data sources, it can be designed to be self-executing, thereby inoculating its owners against the risk of future incompatibility.
Digital avatars built using Cadence can be altered to incorporate new features. If, for instance, we buy our avatar a new pair of shoes, the attribute table can be changed to reflect as much, so that when the avatar is traded on, it can be sold, along with its new shoes, as part of a single transaction. This sort of ‘composability’ has utility beyond games. Music resources can be programmed with ownership attributes that not only permit its content to be re-mixed, but also specify the ratio in which downstream royalties will be apportioned among contributors on the chain. And so on and so forth.
Perhaps most importantly, now that resource-oriented programming can be used to encode ownership attributes directly onto digital assets, we might finally be able to own our digital assets in ways closely corresponding to their physical counterparts. Dare we hope that we can finally be sure that all the eBooks we’ve collected over the years will not one day vanish mysteriously.
