Industry Committee on Oct. 31st, 2018

[Johnny Blackfield]

I'll give you an example. This is just an approach. It's not the exact solution. In an indigenous art registry, it's decentralized in that it doesn't have one owner, but it could have dozens of owners. Every nation, every tribe, could have an ownership stake and they would each—I'll spitball here—put in a certain amount of money to put up the network. Then all of the tribes together would elect an administrative council that would actually administer the blockchain.

That is one approach, and that, in fact, is how Bitcoin works. Bitcoin has over 9,000 nodes or servers, and they've elected a Bitcoin foundation that runs it. There's a core team that actually implements all the changes and administers the network. That is one proposed approach of how you could take a decentralized model and still make it functional.

[David de Burgh Graham]

You mentioned Bitcoin, that's an interesting point. We know Bitcoin is pretty popular now for fraud and theft on the Internet and so forth: We've lock up your computer and give us a Bitcoin or we won't unlock it. Using blockchain, is this something that's going to help or hurt the fight against art crime and forgeries?

How would it affect the privacy of the buyers, given these records are floating around everywhere?

[Johnny Blackfield]

That's a great question.

Bitcoin, as I mentioned in my presentation, is a public blockchain. One of the advantages of Bitcoin is its transparency. It's public.

Any one of us could go and look at every block that's ever been created on Bitcoin and you can see every transaction. You don't see the names of people who have transacted, but their public addresses. Really, there is very little or no privacy, so to speak.

In a permission blockchain, you can add layers of privacy. You can create different levels of security and different admin rights. The purists don't like permission blockchains. They don't call it a true blockchain. But for enterprise purposes such as an indigenous art registry, you can create different permissions, different security levels, to make it far more secure or far more private than public blockchains.

[David de Burgh Graham]

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Now we're going to move on to Mr. Lloyd.

You have five minutes.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you, Mr. Chair.

Thank you to the witnesses today.

Mr. Graham has kind of stolen my question, but it would be to Mr. Blackfield.

Could I get you to elaborate more on putting a blockchain on a physical good and how we are respecting the privacy rights of the buyer?

Then, secondly, just on a feasibility basis, how is the money going to be collected? Are you going to send an invoice to the purchaser, and say pay up, you just bought this artwork? How would that work in practice?

[Johnny Blackfield]

It's a great question. There are a couple of parts to it. I'm going to address the first part regarding the privacy of the buyer.

There is a new concept called “zero knowledge proof”. It's pretty mathematical, so I won't get into the details. Essentially, it allows someone to verify that the seller actually has the product and has sold it to the buyer, without revealing any of the details of the buyer. There is a way to have these transactions done in privacy. It's one of the innovations in blockchain that has really revolutionized the way that things are done. It's very, very new. There are very few actual implementations in production right now. However, zero knowledge proof is exactly a way that you can buy and sell art by protecting the identify of the buyer.

To your second question as to how the payment would work, this is through something called a “smart contract”. A smart contract is essentially code that is written into the blockchain that will transact without an intermediary coming in there. What that means is that any time there is an actual sale from a seller to a buyer, the smart contract would be triggered to take a percentage of the payment from the buyer and input it into a registry for resale rights.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

I understand, but isn't that based on the good faith of the buyers and sellers to follow through with those payments?

[Johnny Blackfield]

Again, all this would depend on how the registry is used. These are some of the commercial questions still being asked and not fully answered. This system would work great if all of these sales are done online or through the registry, but—

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

That answers my question.

Thank you. I appreciate that.

[Johnny Blackfield]

Sure.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

My next question is for Ms. Neel.

This came up when we were in Winnipeg and we were speaking to some of the indigenous witnesses. It has sort of been alluded to in some of the questions here. I want to see if I can get as specific an answer as I can.

Say there is a case where you have traditional indigenous knowledge, and we're being asked to envision a system where we would recognize the right of the group. You spoke of a language group rather than a formalized band structure. If there were an individual who was part of that language group and they wrote a book based on their experiences using traditional knowledge and symbols, we recognize that person's individual right to copyright.

However, if we recognize a group right, how do you foresee that working out?

[Lou-ann Neel]

That's a million-dollar question.

I think this is the part where we haven't finished our discussions. It goes back to being able to restructure that communal entity, if you will, that allows for individuals within that entity to create their own works and still go out and copyright.

For instance, in my family, I have rights to draw upon the legends and the crests from my particular family group. In this world, there is nothing to stop me other than my integrity, my obligation and my responsibility back to the nation. Those aren't codified rules. They are not written down anywhere. However, that's part of the structure I'm proposing that we start to develop within our communities.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

We want to make the best recommendations possible, and I think avoiding a possible conflict between an individual member of a nation who copyrights something and the recognition of the rights of the group.... What recommendations would you have on how to balance those two sets of rights, or is that something that's undetermined at this point?

[Lou-ann Neel]

It is slightly undetermined. My biggest recommendation right now is to support that localized work that needs to happen so that we have entities that we can draw upon for that knowledge.

In the meantime, all we have is the current law, but as I mentioned right at the beginning of my presentation, we also have to reconcile and do an analysis of how all those things—the UN declaration, TRC—roll out on a practical level. I don't think we've answered any of the questions on how those pieces of reports and recommendations overlap one another, and in some areas, leave gaps.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you so much. I appreciate that.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

For the folks in the room, you'll see the lights flashing. That's our bat signal to get ourselves out to the House because we have a vote coming up.

I'm looking at the time. It doesn't look as though we'll be able to come back to finish, so we're going to adjourn for the day.

I want to thank our witnesses for very interesting testimony. It's been really good.

I'm going to remind our witnesses that they can submit briefs. There has been a lot of interesting information, but if there are things you haven't said, I recommend you submit a brief, because we are very interested in this.

Thank you very much.