Matthew Kepnes (AKA Nomadic Matt), described as an American travel expert and a New York Times bestselling author as well as a blogger, has become the worlds first individual to tokenize a book.
The way this works is pretty interesting. First, Kepnes or whatever individual or author, goes to a new ethereum based publishing platform called Publica. There, he says how much he wants to raise, in this case $10,000. That’s for 1,000 tokens, thus $10 per token or, more correctly, $10 each for his new book Backpacker’s Guide to Europe.
Kepnes then goes off to write the book, so what happens if he runs away we do not know, but arguably you can have complex methods to keep the author accountable. In this case however we should think Kepnes is a good honest man, so he’ll deliver.
Now that we have the book, we need to first store it somewhere. Publica has not updated their paper, we should think they have by now settled on an option, but prior to their token sale ICO of Pebbles, PBL, they say they might use IPFS or Swarm or some other decentralized storage method.
Finally we’re good to go. All we need now is a token, because the token in this world is the private key to the public book. There’s an app of course, currently only for android, and if you have the Kepnes token you can read his book, if you don’t, you can’t. Fairly simple on the surface you would think, so let’s stop a bit here before we go underground to the Publica tubes.
The token is the book. So if the book is rare, or the tokens are limited in number and there is a way to enforce such limitation within and outside the app, then that token could become very valuable indeed.
From a different aspect, one can easily see this arrangement very much as a contract, but of the smart kind. Each token buyer has entered into agreement here with Kepnes and if he fails to deliver arguably any one of them can just sue him.
The agreement, however, is not in paper. Instead, a token has been delivered that grants the token holder access to the yet unpublished book, and a right to have such book by a certain time frame.
Once the book is available and assuming the author behaves, then the physical nature of the book is replicated in digital form, including the sharing qualities of physical books.
That’s because the token doesn’t know who the actual owner is, so the initial owner can simply give the token to a friend who can now read it like he would be able to do with a physical book.
All that is the idea in any event. Scarcity in a digital form is very difficult and might not exist here because if the book is stored on IPFS you can arguably just go on IPFS and read it.
Presumably if you wanted to be very smart, you can somehow encrypt the book, with the Publica app then having the decrypt key. If you wanted to do rocket science and find out if it is possible at all, you might even try and see if the token itself can actually be the decrypting key of the actually encrypted book. With ethereum being Turing complete it might even be possible.
Let’s however see how Publica itself actually works and here we’ll go through all the steps because they have laid them out in a very nice chart form on their whitepaper.
First, of course, you need to download the app. There, through a Graphical User Interface (GUI), as in by pressing buttons, you set up a smart contract for the sale of book copies. The token that gives you access to the book is called a read token and is priced in Publica’s own currency, the PBL.
So the author decides how many tokens, and thus locks the number of license keys, with the presale contract set up for the book ICO by pulling a Solidity Smart Contracts template for selling READ access licenses in form of an ERC20 token from the decentralised storage.
The author can set specific values in the smart contract if he wishes, and then sends that all to ethereum’s public blockchain for no fee save for the miner’s fee.
He or she then uses the GUI to publish the book, adding it to an immutable decentralized storage platform. The smart contract is then updated, linking the book’s smart contract to its content.
At that point the author is done. He then probably wants to go off market it, as Kepness has a tiny bit by re-tweeting to his 120,000 followers Publica’s tweet of his first book ICO.
As far as the end users is concerned, you just download the app, browse around, and if you find a book you want, you buy the token if you don’t have it, with the proceeds of sale, minus a Publica platform fee, going to the author.
Thus we get a decentralized publishing platform that can further support authors through the monetizing aspects of tokenization.
It is permissionless, of course, so anyone can presumably publish, although at the user interface Publica might perhaps have a say regarding what books they show through their app.
So allowing direct publishing and a way to financially support independent authors who need not seek any publishers’ permission in order to gain some income from their writing.
Arguably this can be a lot wider than simply books. Academics, for example, might want to publish a paper on there, hopefully for a far lower price than current journals charge. You could have short stories, or just an essay, or maybe even poems.
The difficulty of course would be to get anyone to notice your writing, but that’s the game in any method used. The upside might be that monetizing digital content could become easier through tokenization than advertising.
Whether that will indeed be the case, does very much remain to be seen, but tokenization of content is quite an interesting development.