Current blockchain technology allows for the recording of property rights. But while users can prove that digital books belong to them, they can’t necessarily prevent people from stealing or reading these books without permission. In such an environment, it is very difficult to monetize digital assets.
Elastos aims to solve this problem by creating an environment in which the execution of a digital asset (i.e., the viewing, buying or selling of a digital movie) all take place on the Elastos Smart Web, and therefore abide by the rules of smart contracts. The creator of digital content can use a tool, provided by Elastos, to determine the number of digital assets to produce.
Authors, for example, can decide that they only want to have 5000 copies of their books in circulation on the Smart Web. Setting a finite amount of digital content produces scarcity and enables the realization of capital. Elastos also wants to enable consumers to become investors. Say there are only 5000 digital books in circulation, and that these books become extremely popular. That means that every one of those books will increase in value, creating potential wealth for the people who bought them. After enjoying the book, the customer could sell it to someone else for a higher price. Users can also buy limited edition game apps. After playing those games in Elastos Runtime on their cell phones, they can sell the games to other people. Because these games are limited editions, their value will fluctuate on the second-hand market.
In another use case, filmmakers could raise money for their movies by crowdfunding through issuing their tokens. The filmmakers could write a smart contract saying that every time someone watches the movie, token holders will get a small share of the fee. The filmmakers may also write another smart contract to let moviegoers sell the movie peer-to-peer or via social networks and receive commissions.
This system creates financial opportunities for both creators and consumers, thus incentivizing more people to use Elastos. The accumulation of more users will incentivize more digital content creators to produce and publish content on the Elastos platform. This increase in content could then attract even more users, and those additional users will create more content. This is a positive cycle that will result in a large amount of valuable digital content that can be used to generate wealth.
When you think about it, it is very hard for an indie game developer to sell the games they develop directly to the people who want to play that game. They always have to go through a game publisher if they’re to make any sort of profit. There’s always a middle man involved when you want to sell any sort of digital asset.
Now, let’s think about a second problem users face in the world of today. When you buy a game from a game publisher, you decide to play the game, complete the game and then finally you would like to sell this game. Well, with the current paradigm, you could theoretically sell your game through online third party sites or maybe resell your game for cheap back to the game store.
In either case, you will never be able to sell the game for the exact price you bought it at. Today’s market doesn’t let this happen because as soon as the game is opened, it’s considered a second-hand copy so it drastically decreases its value and its worth in the market.
Elastos aims to solve all the above problems by using blockchain and Elastos runtime environment that can be installed on your regular devices like android phones, iOS phones, windows computers, etc. Here’s how Elastos can do this:
Content creators will be able to use dApps or build their own dApps by implementing a particular smart contract on the copies of the game they plan on selling to the market. They don’t need to go through any sort of middle man where they’re likely to get ripped off as the middle man takes majority of the profit. What they can do is have a smart contract that will let them create 10,000 copies of a game. And every time each game is sold and resold, the content creators can get a certain amount of profit directly. So, the more popular their game is and the more the game copies get resold on the market, they keep on earning profit. This means that buyers can buy a copy of this game and if this game becomes popular later down the road, they can decide to sell this game to the market for a higher price. This creates an economy of its own. This is only possible because there are only 10,000 copies of the game and no more. So, the more demand for the game, since the supply never changes, the value only goes up, thereby creating profit for both content creators and traders. In the traditional world, this is impossible. With elastos, developers will encourage game players to play and sell the game to the next person.
Each digital asset(music, movies, games) has a unique ID that’s recorded on the elastos blockchain. Since every asset has a unique ID and through a smart contract, you can only create a certain number of copies for this asset, this simple idea is what will help content creators create scarcity for their digital assets. So, you may create a total of 10,000 copies for your game and no more. Each of these 10,000 copies will have a unique ID that will be stored on elastos blockchain. In addition, each user will also have a unique ID they’re associated with. So, when someone buys a copy of this game, their ownership will be attached to their game copy that they own. When it’s time for them to sell that game back to the market, the only thing that will happen is that the ownership of that game copy will be transferred to the next buyer. Each game is stored and encrypted so you can’t play the game if you’re not the owner of the game.
Elastos tackles the problem of ownership of an digital asset by storing the ID of each digital asset on the elastos blockchain and tying that digital asset with the ID of the owner for that digital asset. Everytime the owner tries to play the game, elastos runtime will first verify both the ID of the owner and the ID of the digital asset and check if the user is the real owner. If so, elastos runtime plays the game. If the user obtained an illegal copy of the game, the game cannot be played. Elastos runtime will be able to play games being developed for it and since the runtime can be installed on top of both android and ios devices and also windows, the same game can be played by the owner in multiple devices by just opening up the same dApp in different devices. This is possible because of the agnostic nature of how elastos runtime works.