Digital Asset Management & Blockchain: Overview & What You Need to Know

Digital Asset Management & Blockchain

It seems like everyone is talking about Blockchain these days – more specifically, its potential to disrupt processes across many industries by offering a more secure, verifiable way to track a series of digital transactions. Blockchain’s central premise is that it creates a digital ledger, complete with timestamps of every transaction and shared among a peer-to-peer network of computers. Because of its decentralized nature (the ledger does not exist in a single, central location that could be targeted by hackers), it offers robust security against manipulation and creates a trustworthy audit trail. These and other benefits have blockchain poised to make a big impact in digital asset management.

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An Overview of Blockchain (and Its Potential for DAM)

Originally created for the digital currency Bitcoin, blockchain enthusiasts quickly began to realize its potential for other uses. Because blockchain allows digital information to be distributed while protecting it from being copied, the technology is being eyed as a way to share sensitive health data, track goods as they move through the supply chain, and even de-centralize the energy market.

The features of blockchain – its security, comprehensive audit trail, and fool-proof transaction tracking – make it particularly useful for digital asset management. Blockchain 2.0 introduced a concept known as SmartContracts, which cuts out the middlemen typically used (such as lawyers and notaries) in contractual transactions, defining rules and penalties and verifying and enforcing the contractual obligations. This technology allows content creators to share ownership of an asset, ensures that payments are allocated appropriately, and facilitates the transfer of rights when assets are sold or transferred.

For instance, a photographer may work with models, directors, and editors for a magazine shoot. SmartContracts enforces the stake of each party in the creation, payment, and rights of the final product. Using the same example, a digital agency who owned that final product could use SmartContracts to sell the asset to another entity or to license the final product to another company, with every party’s stake, rights, and payment transactions being recorded on the blockchain network.

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What You Need to Know About Blockchain & Digital Asset Management

While the vision of blockchain-driven DAM is a promising one, it’s not yet a reality in the DAM space. Here are a few important things to know about digital asset management and blockchain.

  • Blockchain is de-centralized. That means that data is not stored in a single, central location, but copied to each node within the system, making it difficult to destroy the data. For DAM applications, this means that blockchain is ideal for information that needs to be referenced by multiple parties, such as an asset’s metadata, but they’re not ideal for storing large volumes of data.
  • Blockchain could function in a similar way to version control. In version control, previous iterations aren’t destroyed or overwritten. The same is true for blockchain: new information means a new block is added to the chain, but previous information and transactions remain within the ledger, making rollbacks to previous versions possible.
  • Blockchain provides a complete audit trail history. Through the use of asset identifiers, blockchain could make it possible to determine who made changes to an asset’s metadata and when.
  • Blockchain is not synonymous with Bitcoin. While digital currency was one of the first uses for blockchain technology, Blockchain is useful for recording a variety of digital transactions, not just financial activity.

Tips for Using Blockchain for DAM

As blockchain becomes more prominent in the digital asset management space, keep these tips in mind:

  • Keep GDPR in mind. GDPR regulations stipulate that personal data can’t be stored in an immutable form – and blockchain ledgers are immutable by nature. To maintain compliance with GDPR, be cautious about what data you store on the blockchain, using it only for data that must be shared between parties or systems.
  • SmartContracts will greatly enhance the usefulness of blockchain for DAM. SmartContracts isn’t crucial for making use of blockchain to carry out transactions, but cutting out the middleman to ensure that obligations are met is certainly an attractive proposition for those who create, distribute, and purchase digital content. Even without SmartContracts, the immutable record of all previous transactions and changes facilitates greater confidence.
  • Blockchain can play an important role in rights management. Blockchain allows digital assets to be distributed, but not copied – adding a layer of protection against the misuse or unauthorized use of assets or information.
  • Blockchains can be public or private, and this will be a key consideration when configuring blockchain for DAM or selecting DAM providers with blockchain capabilities. Private blockchains, naturally, are not publicly accessible, so they’ll typically be better suited for applications requiring greater security. Public blockchains, on the other hand, are already gaining ground as a way for content creators to publish and distribute their work while getting compensated for it. (You’ll see this type of blockchain in action on platforms like Steemit.)

While blockchain may be making an impact on digital asset management in the future, you can still reap many of these benefits today with a DAM solution like MerlinOne.

Schedule a demo today to learn how MerlinOne can help your creative and marketing teams operate more efficiently with powerful features such as permissions and versioning, rights management, and automated workflows that save your team valuable time.

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