The Printing Press, NFTs, and the End of Copyright

How encrypted certificates of authenticity will revolutionize digital media

Copyright law has been around for a long time, and its presence is often taken for granted. The claim that copyright is necessary to incentivize the creation of literary or artistic work is seen as an incontrovertible truth. The history of content creation tells a different story, however, and the future of copyright depends on remembering how it really started.

The modern conception of content creation and copyright begins with the invention of the printing press. The printing press revolutionized the market for information in Europe. Never before had books of all kinds been so easily reproducible and, as Europe had no existing copyright law, anyone who could rent a press was free to copy whatever work they liked. The immediate effect of this was an explosion in the publication and distribution of books new and old. Heinrich Bensen, A contemporary German historian, writes that "So many thousands of people in the most hidden corners of Germany, who could not have thought of buying books due to the expensive prices, have put together, little by little, a small library of reprints." In 1843 alone 14,000 new works were published in Germany, close to the publication rate today in per capita terms. A self feeding cycle of rising literacy rates increasing the dissemination of books which helped increase literacy rates began, and demand for books skyrocketed.

A supporter of copyright law should already be confused. Why would authors write these works if anyone could make a copy without paying them a cent? Why would publishers run their presses when they knew they didn’t have monopoly control over the book they were printing? This apparent paradox is resolved by looking at the incentives faced by publishers and authors and the actions they actually took during this period of information freedom in Germany. Publishers knew that once a manuscript was out in public it could be cheaply copied by other printing press owners, so instead they sought out new manuscripts in pursuit of a first mover advantage on publishing. In addition, they created fancy special editions for wealthy customers to differentiate their product from what other printers could easily copy with mass market paperbacks. This drive for new works was very lucrative for authors who could charge substantial fees for highly in demand literature. The information contained within these books ranged from novels and poetry to technical manuals instructing readers on how to manufacture steel or textiles and the latest academic research into physics or math.

This state of information freedom in Germany is contrasted with the severely restricted printing industry in England. There, the Stationers Company, a guild of printers, successfully lobbied the Parliament for monopoly power over printing under the Licensing of the Press Act in 1662. The Stationers used the ‘copy rights’ monopoly to do exactly what economics 101 predicts monopolies do: lower quantity and raise prices. Instead of tens of thousands of new publications each year, England saw just a few hundred, and instead of thousands of mass market paperback copies, new books were published in limited editions of at most 750 copies at a price affordable only to the upper class. This state of affairs changed only slightly under the Copyright Act of 1710, widely regarded as the foundation of modern copyright in common law countries, which transferred some of the economic rent from copyright monopolies from the printers to the authors. Still, copyright restricted output of new publications and increased prices, keeping books inaccessible to most.

Far from encouraging the production of new literature and academic work, copyrights in the age of the printing press were simply monopoly privileges given to printers so that governments could control the flow of information and publishers could keep out unwanted competition.

Copyright today has evolved into a lifetime long monopoly protection encompassing all forms of human creativity. It creates huge barriers to entry for all content platforms through the astronomical costs of enforcement, and diverts billions of dollars from productive activity to lawyering and rent seeking. The benefits of this transfer of rents are less relevant today than they have ever been. The cost to create and distribute content has gotten several orders of magnitude lower since the advent of the printing press. Full length feature-quality films can be shot on iPhones and distributed online for zero marginal cost. Services like Patreon have connected content creators with huge communities of people willing to support a creator even though they could get the content for free. Online creators make movies that are just as good as Hollywood films, music that is just as good as any professional studio, and documentaries that are better than the History Channel. There are millions of creators out there making high quality content and posting it online for free so why do we believe Disney when they say 75 year copyrights are needed to incentivize creativity?

This brings us to the exciting future of copyright and content creation: Non-Fungible Tokens (NFTs). NFTs are basically encrypted certificates of authenticity that digital artists can sell through the blockchain and they have already made a huge splash in the digital art world. Chris Torres, the creator of Nyan Cat, was able to sell a digital certificate of authenticity for $580,000 dollars, even though the animation itself is completely free and copyable. Additionally, artists can specify a percentage cut of future sales of their authenticity tokens to guarantee income from their work. NFTs cut out the rent seeking behemoth that is the copyright protection industry, and allow artists to sell directly to consumers. It is a completely non-violent, secure, and efficient alternative to copyright that also allows everyone to experience the art or literature itself for free as it is copied across the web at zero marginal cost.

Whether or not you believe that copyright was detrimental to the printing industry of Europe in the 18th century, it is clear that the need to transfer rents to distributors and artists is smaller now than it has ever been. Distribution of media over the internet costs almost nothing and artists have better methods of getting paid for their work that don’t require an army of copyright lawyers. At the same time, the benefits to free exchange of information have never been higher. By building and promoting new systems of rewarding creators for their work like Patreon and NFTs, we can simultaneously build up a public repository of all human knowledge and art and incentivize creators to make new stuff. Dismantling the rent seeking cabal of legislators and incumbent copyright holders is going to be difficult, but if we can manage it we will be able to use our digital tools to their fullest extent, and usher in a new era of information abundance.