An Australian anti-piracy technology startup is seeking to raise up to $US20 million in funding by issuing its own cryptocurrency.
Sydney company Veredictum is hoping to gain widespread adoption within the entertainment industry with a system that will use blockchain to register ownership rights for videos and films and add machine-readable watermarks to works so any digital theft can be tracked.
On the other side of the platform, anyone will be able to join, for free, as “members” of the platform to contribute computing power to help search for pirated videos online using the identifying watermarks – in a similar model to UC Berkeley’s search for aliens.
Content owners would pay a fee to register their works on the system, with 70% of the proceeds being converted to Veredictum’s own cryptocurrency, named Ventana, to be distributed to members putting forward their computing resources. The startup would retain the other 30% for further development of the platform.
It’s hoped this offering of a new type of cryptocurrency will generate $US7.5 million in funding to develop the Veredictum system, and encourage new members to join up to increase the overall pool of computing power to tackle piracy.
A further “stretch” target of $US20 million has also been set for the second part of the system – a marketplace for content distributors and influencers to negotiate deals to sell entertainment to consumers.
Founder Tim Lea told Business Insider that he prefers the term “token sale” over the widely used “initial coin offering” (ICO), because the latter sounds too similar to IPO and makes people falsely think the coins provide equity in a startup.
“We are trying to solve a problem – we’re not just creating a token for speculative purposes,” he said.
“If the problem we are addressing is being solved and the platform is being used, then in general terms the tokens will rise in price. But that’s not the only objective of the token sale. The token sale is about getting people from the film and video industry to actually use the service. The token is intrinsic to the platform.”
With the current uncertainty over the direction of Bitcoin, the cryptocurrency market is in a volatile state. This has forced Lea to push back the start of the token sale from this month to August 14.
Lea launched his business after producing and directing a feature film in 2014 and experiencing first-hand the frustrations of digital theft. His latest career as a technology entrepreneur has seen him become an evangelist for blockchain, publishing a book on the subject and explaining ICO to the public.
He told Business Insider that the venture capital industry “is in danger of being disrupted” by digital currency offerings.
“The volume of funds that have been raised by ICOs and token sales have actually exceeded the volume of venture capital going into the blockchain space this year for the first time ever,” said Lea.
“Where we are today is where we thought we’d be in three years’ time in terms of going for finance… By doing it this way we don’t need to actually get external investors on board right now.”