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Standing Committee on Indigenous Affairs
02/03/2018
Growing presence of inauthentic Aboriginal and Torres Strait Islander 'style' art and craft products and merchandise for sale across Australia

STAPLES, Dr Mark, Research Group Leader, Data61, Commonwealth Scientific and Industrial Research Organisation

ZHU, Dr Liming, Research Director, Data61, Commonwealth Scientific and Industrial Research Organisation

[12:25]

CHAIR: As these proceedings are public, they are being broadcast and recorded by Hansard. If you wish to have evidence heard in private, please let the committee know and we'll consider your request. Although the committee does not require you to give evidence under oath, I wish to advise you that this hearing is a formal proceeding of the parliament. Giving false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. If you object to answering a question, please state the reasons for your objection and the committee will consider the matter. The committee has asked you here today because we're interested in discussing the potential for blockchain and possibly other digital technologies to authenticate artworks. I now invite you to make an opening statement.

Dr Staples : Thank you for the invitation to address the committee. I have an opening statement which would run to nine minutes. I could do a shorter version that doesn't cover quite so much background, or we could launch straight into questions, in the interests of time.

Mr SNOWDON: Are you able to table your statement and give us the shorter version?

Dr Staples : Yes, I'm happy to do that.

Mr SNOWDON: We can kill two birds with one stone. Do what you think you have to. Don't worry about us.

Dr Staples : I'm just working out what I can skip. The technical expertise we're representing here today is on blockchain and distributed ledger technologies, software architecture and software engineering.

Mr SNOWDON: You've done me already!

Dr Staples : We are part of the Data61 experts that have taken a lead role internationally in those fields of software architecture, business process and formal verification of smart contracts. In 2017 with the assistance of Treasury we delivered some reports with the support of the National Innovation and Science Agenda on the potential for the future adoption of blockchain and its risks and opportunities. Those reports are publicly available and intended for a general audience. We're also playing an active role in the international standards process, which Australia is leading.

In Data61 our role is not to promote blockchain or any other specific technology; instead we carry out research to understand their potential benefits, opportunities, risks and limitations. We study them in general terms and also for specific purposes such as certifying authenticity or provenance. We have an awareness of some of the trials and uses of blockchain and distributed ledger technology within Australia and internationally. We're experts in neither art nor Indigenous affairs, but we're interested in exploring where and how blockchain and distributed ledger technology may help with Australian Indigenous art.

I will give a brief introduction to the technology. What is blockchain?

Mr SNOWDON: Please, give me 'blockchain for fools'!

Dr Staples : Blockchain first emerged as part of the implementation of the bitcoin digital currency system. Like old-fashioned ledger books used in accountancy the blockchain in the bitcoin system records valid transfers of financial assets. Through the use of strong cryptography the blockchain creates an immutable record of those financial transactions. A block is a collection of transactions, and the chain between blocks is provided by cryptographic techniques. Unlike paper ledger books or centralised accounting databases, a blockchain ledger is verified and replicated by many computers controlled by different parties, so we say a blockchain system implements a kind of distributed ledger. Even were some of these parties untrustworthy or compromised, it's infeasible for a small number of bad or compromised parties to disrupt the integrity of the data recorded in the blockchain. The whole system is operated by and safeguarded by the large collective.

Blockchain systems can do more than just record financial transactions. Just like normal databases, blockchain transactions can in principle represent assets and record information for almost any kind of industry or activity. And rather than just storing 'dumb data', blockchain transactions can also record small computer programs provided by users and the results of executing those programs. These small programs are often confusingly called smart contracts, but they're not necessarily very smart and they do not necessarily execute provisions of legal contracts.

In summary, blockchain systems can store information, represent assets and execute programs related to almost any kind of industry or activity. Their integrity is safeguarded by strong cryptography and by the collective that operates the system. Blockchain is a very new technology. It's imperfectly understood. It's still undergoing active research and development, and it is yet to be widely used in the real world. Some limitations are known. A blockchain is often slower than normal databases. It is not ideal for storing many large pieces of data, and it is difficult to support privacy or confidentiality. Partly for these reasons, blockchains are almost never used in isolation. Usually blockchains are combined with user interfaces, cryptographic key management systems and other normal databases as part of a complete solution to a problem. So, there are many different ways you use blockchains and many different problems you could address with them. And there are some potential uses for Indigenous art.

CHAIR: Can you give us an example of where it's being used now that explains the mechanics of being able to house only a short program and how it's moved and used, and then how you think it can be applied to the Indigenous world?

Dr Staples : As I've said, it's not widely used in the world in practice at the moment. There have been a lot of trials and proofs of concept over the last couple of years in industry, and many people say that this year is the year when we'll start to see more widespread adoption of blockchain in industry in practice. As for the way in which a blockchain might be used here and the way in which the small programs might help, there are many ways. One is that a blockchain, by creating an immutable record, can also have an immutable record of events related to the history of the provenance of something. So, you can record events, the fact that events have happened in the lifetime of the production or transport or storage of an item. Some people are trying to use blockchain not just to support recording events but also to enable payment on the blockchain, and sometimes using digital currency. In those cases the so-called smart contracts can be used to check perhaps that conditions are satisfied. For example, a smart contract might be used as a kind of conditional payment mechanism for the purchase of something, so that I commit some money to a smart contract for the acquisition of some asset. If some third trusted party then can also write to the blockchain, certifying that the asset is of some particular quality, then the smart contract might take that certification as evidence to release funds and make the payment. That payment would happen automatically, triggered by the advice entered into the blockchain by that certifying authority.

CHAIR: So, it's kind of looking at a super PayPal?

Dr Zhu : Payment could be part of the blockchain solution, but it could have nothing to do with payment itself. You can record any information in it—the provenance or the movement of artwork.

Mr SNOWDON: From one person to the next—

Dr Zhu : To the next person, where the particular producer has been licensed. So, that piece of information can be recorded in this ledger, managed by a collective.

CHAIR: So, in an art space, a purchaser could go in there and that authentication of the person signing it—it would be available for them to authenticate it.

D r Zhu : In the merchandise and craft space, and also fine arts, there was a supply chain, basically. People producing then moving them around to a few entities. Along the supply chain, if everyone is recording some information into it and certifying that it is still authentic at this point in time, the eventually purchaser could potentially look up the database, the digital ledger, to find out whether this provenance or this tracking of information is authentic. Maybe you can never be 100 per cent sure. There are always ways to overcome a certification scheme. But it would definitely improve the trust.

D r Staples : The idea of provenance is well known in the arts world. This could be a way of recording provenance information over time, so that eventually you would build up a stronger base of evidence for the origin or authenticity of some items. One challenge, though, is that this is still only a digital record. Blockchain doesn't solve the problem of how to digitally identify the physical artefact. That's a separate problem that is not solved by blockchain. If there were solutions to that problem, blockchain systems could take advantage of those systems.

Mr SNOWDON: Could you use a barcode like a barcode in supermarket?

D r Zhu : People may photocopy a barcode and put the same barcode on other inauthentic items.

CHAIR: But if there was a unique identifier in the barcode style, which is possible, that could be read digitally and recorded as part of that to validate its authenticity.

D r Staples : It would be possible to copy it. Perhaps then in the database you would see two entries for that single identifier. You wouldn't necessarily know which was the correct one.

Mr SNOWDON: Except if you know the origin of the item. I'm an arts centre; I've got 400 pieces of art that I'm going to put on the register, and they're each registered with an individual identifier, and I'm recording their sale. Presumably that could take place. The origin is understood, and it's not some third party who's imposing—is that a possibility?

D r Staples : All of that could be recorded. I think all of this would help to reduce the incidence or risk of fraud or substitution, but it wouldn't eliminate it as a possibility.

Mr SNOWDON: We've been talking about licensing, for example. If you licenced arts centres to be trademarked against X, and they all registered their art, whatever it might be, on your blockchain technology, you could follow its provenance. It's been produced by X; it's been sold to Y in this location, presumably.

D r Staples : Yes, so long as everyone was recording all the steps onto the blockchain.

D r Zhu : It would significantly improve the trust. But if a bad actor had somehow put a copy of that unique barcode onto a different item in the physical world, there would be two items, one authentic and one inauthentic. Both would have that unique barcode.

CHAIR: One would have the history that went with it. The other one would not.

D r Zhu : If you photocopied that directly from the authentic one. Imagine you have authentic art, then you have unique—someone photocopied that. There is potential for that.

D r Staples : Or the label might be removed and put on a substitute piece of art and the original sold as authentic art.

Mr SNOWDON: What you need is one of those things—an ultraviolet or something—to reveal it, so you couldn’t just rip it off and put it on something else—if was impregnated into the canvas, for example.

D r Staples : Tamper-resistant labels and so on might help, but that is outside our area of expertise.

D r Zhu : That is not part of blockchain. There is a trade-off that that kind of technology could be quite expensive if you're putting it onto merchandise which is not very expensive.

CHAIR: You have lots of virtual world examples, but none yet in the real world.

D r Staples : When I said the real world, I mean outside of academia and research and trials.

CHAIR: Is it possible for you to find in the non-virtual world, the non-research world, a case study that would be an exemplar for you on how this would work, and trial it first on a piece of Indigenous art?

Dr Staples : I don't know—

Dr Zhu : The agricultural example might be one.

Dr Staples : Yes, but I think that's not—I don't know off the top of my head. I could try and find—

CHAIR: I'm just wondering if you could try and do it in the next couple of months.

Dr Staples : information about other companies working in this space. I think in fact we have some information about that, but I would have to supply it later.

Mr SNOWDON: It would be useful if you were able to give us a view of what you think it might look like if you did this in the art space—if you can't do it you can't do it—bearing in mind it won't have a hundred per cent protection or anything like that. The issue we're confronting is knock-offs, which could be objects as well as art pieces, but also the question of authenticity and how you make something authentic and how you register it—how you have its providence.

Dr Staples : I should note that all of what we've suggested so far could be implemented using conventional database technology. It wouldn't require a blockchain to make it work.

Mr SNOWDON: What's the advantage of blockchain?

Dr Staples : The difference between a conventional database and a blockchain is that a conventional database is usually owned and operated by a single, trusted party. For example, governments operate many registers which are authoritative stores of information about a domain. Often, professional associations also operate similar registers. They use conventional databases to implement those systems. A blockchain can be operated by a collective. That's the difference

Mr SNOWDON: That's the advantage.

Dr Staples : It's the difference.

Mr SNOWDON: We've got 84 art centres around the country. If they're all linked into this blockchain technology, as long as they made the entries the same, if everyone knew the rules, they could all be making—

Dr Zhu : The blockchain technology automatically replicates this information across all the collective nodes of the sites. Another unique capability of blockchain is the immutability is typically stronger than a centralised database.

Mr SNOWDON: There'd be absolute transparency.

Dr Zhu : Yes.

Dr Staples : One of the advantages and limitations of the blockchain system is that all of the information recorded on the blockchain typically is visible to all of the participants. If there is personal or private information recorded on the blockchain or images, small images, recorded on the blockchain all of that cannot be easily changed or deleted, for example, and you can't stop other people from seeing them.

CHAIR: Are you co-developing an app for this to upload imagery?

Dr Staples : We're not developing any applications in this space specifically. We do collaborate with industry and government in the development of blockchain systems for a variety of purposes.

Dr Zhu : In the industry, there are such apps, which take a picture and then take a digital signature of that picture and upload that signature to the blockchain as a proof that this particular picture has been taken on this date and has not been tampered with since.

CHAIR: So there's a process already in place.

Dr Zhu : There's an application, an iPhone app, that does this, which is actually developed by an Australian company. This is not for art, per se.

Mr SNOWDON: No, it's just general.

Dr Zhu : It's very good for digital rights. If you have a digital picture, which itself is data, it's not the physical art piece, than that signature and uploading actually are strong proof that you have the copyright and the ownership of that art. But taking a picture of a physical item, depending on the lighting and everything, for someone else to replicate that would still be a research challenge to associate that, to certify that.

Mr SNOWDON: Is there anything else you wanted to tell us?

Dr Staples : There are two observations. One is that blockchain by itself may not be able to provide an authoritative record of the ownership of items.

Mr SNOWDON: But if you've got trusted players who are involved in the blockchain,

and you're prepared to rely on their authenticity—that is, their legitimacy—presumably, except for where people might try and copy, you'd have a measure of confidence which you currently may not have.

Dr Staples : It may increase confidence but it wouldn't be able to guarantee it to be able to be completely authoritative.

Mr SNOWDON: Not with certainty.

CHAIR: Nothing's certain in life.

Dr Staples : The other point is that, beyond just recording information about the items, it would also be possible to use blockchain to record information about authorisations or certifications for parties who might be involved in assessing or certifying artworks.

Mr SNOWDON: Thank you. It's intriguing.

CHAIR: Thank you for your attendance at today's hearing. If you have been asked to provide any additional information or if there is anything else you would like to provide, please forward this to the secretariat by 16 March. You will be sent a copy of the transcript of your evidence to which you may suggest corrections.

Committee adjourned at 12:46