Rights holders are using hidden Bitcoin bounties to help sniff out online pirates

CONTENT producers and rights holders have been waging a global war on online piracy and some are even offering “Bitcoin bounties” to get pirates to snitch on file sharers.

Australian-based rights holders have gone through the courts to have websites blocked in a bid to crackdown on piracy, however such sites can quickly appear under a new domain name and the use of VPNs means site blocking is likely a futile exercise.

But a tech company based in South Africa called Custos Media Technologies is promoting a different tact to deter pirates. It promises to use its patented technology to embed media files like movies or ebooks with a hidden watermark which contains a small amount of the digital currency Bitcoin.

If you’re the first person to find the watermark, you can claim the Bitcoin prize and in doing so will alert Custos.

“Each watermark contains a Bitcoin wallet, with a reward for anyone who anonymously claims it once the media has passed out of the control of the original recipient,” the company says. “Media downloaders who want to search for such rewards (bounty hunters) can do so anonymously, from anywhere in the world. The moment a bounty is claimed — and by the nature of cryptocurrencies, this can only happen once — the transaction reflects on the blockchain, and Custos notifies the media provider of the incident.”

So basically, the first person to download the pirated file, view the code, and report it via a special Custos tool wins the bounty.
Bitcoin, and the blockchain technology that underpins it, is perhaps the perfect form of bounty.

The system relies on a peer-to-peer architecture which allows users to transact directly without needing an intermediary and all transactions are recorded in a digital ledger that can’t be altered. The process is somewhat less intrusive than regular payment systems as users can remain anonymous. Digital book publisher Erudition Digital is one of the latest companies to team up with Custos to leverage the incentive of embedded Bitcoin bounties.

“This scheme improves on existing methods of watermarking files and then crawling various places on the internet to detect those files,” said Bill Rosenblatt, President of GiantSteps Media Technology Strategies which specialises in copyright technology.

A crawler is a program or automated script that browses the web in a methodical, automated manner but there are limits to how much of the internet it can scour. “Bounty hunters can find files in places which those crawlers can’t access, such as password-protected cyberlocker accounts,” he said.

Essentially, the Custos system is designed to attack the economy of piracy by targeting uploaders rather than downloaders, turning proactive downloaders into an early detection network. According to its own data, testing of the Custos system across different media types found it takes an average of just 42 seconds for an individual to claim the bitcoin bounty concealed in a file once it has been uploaded to social networks.

Even when the file is on harder-to-reach places on the dark web, the time is still less than five minutes before a file is effectively reported.

It remains to be seen if this type of technology-driven approach becomes widely adopted by content owners but at the very least it’s an interesting new tactic to combat illegal file sharing.