crypto: PHOTOCHAIN

Motivation

Today blockchain technology is enabling a global network of people to perform transactions of various kinds, peer to peer, without the need for a central governing authority. These new innovations allow people to verify these transactions safely and securely at any time.

Using Ethereum blockchain Smart Contracts, people are able to make digital agreements circumventing the need for a third party. Both parties must comply with the conditions of the contract which can be easily verified on the blockchain. Being decentralized, tampering is prevented.

Photochain is a peer to peer platform, releasing new concepts for a next generation stock photography platform. Photochain will be a vehicle for fair trading of digital works between artists and buyers.

The terms of use ensure a secure, easy to use and fair trading process for both parties. Artists will receive up to 95% of the final selling price of their digital works.

Unfavorable Sales Conditions for Artists

Currently there aren’t many options available to photographers or designers who want to earn money in a fair way, selling their digital work. This is particularly concerning for amateur photographers and hobby artists who have not yet attained a high level of name recognition, which would enable them to sell their works at higher prices. For this group of artists, there are stock photography microstocks such as Shutterstock and Adobe Stock available.

Although artists can reach lots of potential buyers by putting their digital works on these platforms, they only receive a tiny percentage of the sales price. Current centralized photo stocks can receive up to 90% of the profit margin. Also, the platforms have stringent requirements for the sellers. Due to these challenging conditions, the artist is obliged to publish a substantial number of images in hopes of being able to compete against high levels of competition.

Other problems include sellers being unable to set their own pricing, long waiting times for verification of the content, a large number of rejections of the work by the photo stock platforms, as well as long time intervals between payments.

Photochain DApp as a Solution to the Artist’s Problems

By developing the Photochain platform, we present the possibility for artists to sell their works directly to their customers, on their own terms. Mediated by Smart Contracts, when a sale is made, the seller is paid, and the buyer receives the purchased picture immediately. Thus, Photochain doesn’t require a centralised authority to ensure the correctness of transactions. This reliability is inherently contained in the blockchain technology.

The Photochain platform has been engineered from the ground up, to solve the problems of traditional stock photography platforms. For ongoing development, the wisdom of the community oversees the platform and machine learning is employed to find solutions for other problems.

Photochain’s Mission

Photochain has clear advantages for contributors and customers. Contributors at Photochain benefit from an extremely low fee - only 5% of the selling price. Keeping 95% of the final sale price allows contributors to offer their work cheaper. Consequently the market becomes more affordable for customers. This type of fair market not only benefits the users, but should benefit the photography industry as a whole, as the possibility of increased income incentivizes contributors to perform better.

These profound market changes are only made possible by using blockchain technology, Smart Contracts, machine learning and Photochain’s own user community. Most of the processes become automated and decentralized, significantly reducing costs of platform governance. It’s unavoidable that more and more stock photography contributors and customers will prefer to use Photochain.

The development of the Photochain platform is an ambitious and organically growing process. Our main aims for the project come under three significant prongs:

P2P Marketplace

It’s very important to us that only the artists themselves can determine the value of their work and they’re given the opportunity to offer their work to many potential buyers.

Crypto Economy

Photochain appeals to a broad audience of people that aren’t yet adopters of blockchain and cryptocurrency technologies. The relatable use case of "Photochain" will appeal to this audience. The easy-to-use GUI and the trading process facilitates the onboarding process and supports the Crypto Economy in becoming mainstream.

Photochain Digital Copyright Chain: DCC

Over the course of the project, more and more artists will be able to strengthen their copyright using the Photochain platform, since their works will be linked to their name. This link is manifested as a transaction in the Ethereum blockchain and is therefore visible to all users at all times. This means that the artist’s.

Business Case

In this section we’ll analyse the stock photography market and to who this project will appeal to.

Stock Photography Market

First, the characteristics of the photography microstock market, being a significant part of trading digital works.

Photography microstock is a steadily growing industry that can be defined by the following key points:

Sales through the Internet
Relatively uncomplicated acceptance of amateur photographers, as opposed to traditional photo-editing agencies
Cheap pricing - from $ 0.20 to $ 50.00 for royalty-free (RF) licenses of images

The stock photography market is currently split among a few key players such as Shutterstock, Adobe’s AdobeStock, Getty Images and several other smaller platforms. The estimated annual turnover of this market is currently around $2 Billion. According to an analysis by Technavio, market turnover will grow to $4 Billion by 2020.

Photography Stock Business Model

Since prices for digital content on photography microstocks are kept low, one can only achieve a high turnover if they were to sell a large number of works. Based on the data of a well-known photography microstock, it’s possible to estimate the trading volume of an individual to earn $1,000.

On average, in 2015 an image on this microstock cost $2.80 and the company generated revenue of $134 million per quarter. This equates to 47.8 million transactions per quarter ($134 million/$2.80), or approximately 530,000 downloads per day.

On average, an artist would earn $0.25 per sold work, meaning they would have to sell 4,000 works in order to earn $1,000. From this model, it becomes evident how difficult it is for an artist to obtain sufficient revenue on traditional platforms.

Customer Groups of Photography Stocks

Business and Marketing Agencies

Business customers and marketing agencies need the content for a wide range of internal and external uses such as websites, prints, ads, annual reports, brochures, employee communications, newsletters, email marketing campaigns and presentations.

Media Organizations

Media professionals need digital content for publications, newspapers, books, magazines, TV and films. These companies include everything from independent bloggers to multinational publishers to radio broadcasters.

Photochain Platform

With all currently existing stock photography platforms, the only way security of transactions can be ensured is via central control. Our platform works autonomously, securely and efficiently based on predefined rules.

We are developing the Photochain DApp [5] on the Ethereum blockchain. Additionally, Photochain also uses computer vision (machine learning) to fulfill the specific technological requirements of stock photography.

The Photochain DApp is a platform on which artists have the opportunity to sell their work to a broad audience at a price they themselves set, and where sellers are also fully and solely liable for the works they sell themselves.

The Photochain Team does not have any liability or responsibility for illegal behaviours of the sellers. The artist is responsible for the legality of the works they are selling, and is held fully accountable for any illegal activity. However, Photochain will uphold users copyright protection, by preventing any unauthorised sale of photography.

Rulebook of the Platform

To ensure the self-sufficiency of the Photochain DApp and to reduce the governance of the platform to a minimum, a technologically supported rulebook was developed.

Roles and Permissions

As for permissions, we distinguish between the seller and the buyer.

Seller: An artist has to reveal his identity to become a seller on the Photochain DApp. This step is necessary for the DCC to be filled with works while preserving copyrights. It maps artists together with their work. The registration process is largely automated: The user holds his ID card in front of the webcam, and the computer vision algorithm used by us extracts all relevant data. The addresses of the sellers and buyers will not be mapped with the corresponding names because of an anonymization mechanism.

The following personal data of the sellers will be saved in the Photochain User DB:

Name and address from the ID card (entitles them to solve claims and serves in the prevention of abuse of the Photochain DApp via spamming)
Accounts in social networks (not a required value) This data is encrypted according to information security best practices and saved in the license DB.Here, only the seller can see his wallet address, whereas their name is visible to all buyers.

Buyer: Every Photochain User can act as a buyer. For a purchase, no personal data is required (like it is for the sellers). It is, however, still recommended that buyers register using their personal data. If the personal data of a buyer is present, a seller can enter these into the issued invoice. If they are missing, the wallet address is used instead. Should proof of the purchased license be necessary, the wallet address would be displayed in place of the personal data.

Moderator: The chief responsibility of moderators is to resolve claims. Thus they act as the keepers of the Photochain ecosystem. This task is rewarded both monetarily and by a ranking-increase (2.3). The duty of a moderator can, in theory, be taken up by any Photochain user. A seller can become a moderator after registering. A buyer has to register with his personal data in order to become a moderator.Studies on ‘behaviour in social networks’ has shown that there are always enough people that wish to help sustain the community. The only sufficient incentive that could be determined for this was the reward of elevated ranking

Photochain’s Ecosystem

The Photochain DApp is a platform specialized in the trade of stock photography, in which processes are reduced to a necessary minimum in order to guarantee simplicity and transparency.

Problems with Illegal Content (Pornography, etc.)

Another potential issue is the uploading of illegal content. This applies especially to pornographic and other offensive content. To avoid this, we use advanced technology for image analysis based on neural networks. For the recognition process, we utilize Yahoos’s Open Source solution and its Deep Learning Algorithm, which recognizes pornographic content. Every image exchanged in the Photochain network will be analyzed on a scale of 0 to 1 of pornographic content.

After various experiments, we lowered the threshold to a level where images that display pornographic content are not able get through Photochain. The error rate currently lies between one image per 10,000 uploaded images. Should unauthorized pictures gain access to the Photochain network, despite constant improvement of the porn filters, we will use human intervention. Similarly to the copyright problem, a claim for offensive content can be opened by members of the network. This claim should be confirmed by ten other users in exchange for rewards. If this is the case, the picture is deleted and the provider will be blocked.

Photochain Token – PHOTON

PHOTON tokens are the means of rewarding users across the Photochain Ecosystem. Any type of transaction on the platform will require the use of PHOTON Tokens.

Use cases for the Photon Token are:

Access to the services of the Photochain platform
Rewarding the resolving of claims
Listing on a “featured photographer“ section
Service delivery from Photochain's partners (like our cooperation partner 1World)
Featured in search results
Other microservices, which will facilitate the Photochain Ecosystem in the future
Reward system
For the photographers and their services

The number of PHOTON tokens will be strictly limited by the declared Hard Cap. After the Crowdsale 21% of the PHOTON Tokens will be reserved for the Team, Advisory board, Photochain partners and legals. After this event, no other PHOTON Tokens will be issued.

Due to the common regulatory situation, it is important to note that PHT is purely a utility token, which does not replace fiat currency and cannot be treated as a currency or an investment asset. In no case can PHOTON Token be regarded as a security token or similar. Rather, they’re to be regarded as a means of exchanging services in the Photochain Ecosystem.

Core Properties of the PHOTON Token

We follow Ethereum best practices when designing the PHOTON token smart contracts and attach immense importance to security audits. We subject the token Smart Contract to various security-based audits before we publish the smart contract on the Ethereum mainnet.

The PHT token is based on the following core properties:

Name: PHOTON Token (PHT)
Standard: Ethereum ERC20
Hard Cap: 230,000,000 PHT tokens to be issued
Release Date: Our Token Generation Event will take place right after the end of the Main Sale Event. It may take up to 60 days to distribute the PHOTON tokens to contributors
Represented value: tokenization of photography services

We are forming partnerships in the area of token liquidity and we plan to cooperate with projects, such as Monaco, to offer payment options into the Photochain ecosystem using fiat currency. This functionality is especially intended for users that are not yet fully comfortable with cryptoassests, making it easier for them to get started.

PHOTON Token Mechanics

Token Mechanics	Metrics
Token Name	PHOTON (PHT)
Price per Token (in ETH)	0.00017 ETH
Pre-Sale Cap (PHT Tokens)	10,000,000
Main Sale Cap (PHT Tokens)	170,000,000
Hard Cap (PHT Tokens)	230,000,000
Token Privileges	platform utility token

Token Allocation	%
Token Sale	79%
Management & Team & Legal	14%
Adviser	4%
Bounty	3%

Photochain Pre-Sale

We will finance the development of the Photochain DApp through the use of funds collected in the crowdfunding laps. The funds collected in the Pre-Sale lap will be used especially for marketing campaigns and regulatory compliance.

Pre-Sale PHOTON token Hard Cap: 10,000,000 PHT

Currency accepted: ETH, BTC, LTC

Token exchange rate: 1 PHT = 0.000085 ETH (accordingly in other cryptocurrencies, a discount of 50% of the standard PHT price ).

Amount of tokens per one person: unlimited

Minimum transaction amount in Ethereum: 0.1 ETH

Maximum transaction amount in Ethereum: unlimited (within Hard Cap)

Minimum transaction amount in Bitcoin: 0.003 BTC

Maximum transaction amount: unlimited (within Hard Cap)

Start date: January 2017

End date: Now closed

Photochain Main Sale

The Photochain Crowdsale is an important milestone for the future of the project. The financing will mainly be needed to expand the Photochain Governance Team and for delivering the 1.0 version of the Photochain DApp.

ICO Main Sale I “Community ♡ Sale”, for 3 days:

(open sale, non-capped within hard cap but with smaller individual maximum transaction amount)

Start date:06.04.2018 at 00:00 am CET

End date: 08.04.2018 at 23:59 pm CET

Time based discounts for the PHT tokens price during the Main Sale I Event:

Day 1 to 3:-30% discount => 1 PHT = 0.084 USD

with optional (voluntary) vesting period of 12 months: -40% discount => 1 PHT = 0.072 USD

Maximum transaction amount = 25 ETH

General ICO Sale Information/ Token Economics:

Maximum Amount of PHOTON Token: 230,000,000

PHOTON Token ICO overall Hard Cap (total tokens for sale): 180,000,000

Currency accepted: ETH, BTC

The exchange rate is 1 PHT = 0.12 USD (cryptocurrency equivalent at real-time exchange rates at time of transfer, time based discounts apply)

Minimum transaction: (0.2 ETH and corresponding value in BTC)

Maximum transaction: (dependent on sale phase. Between 25 ETH and 10,000 ETH - corresponding value in BTC)

Only sold and allocated tokens are minted (no need to burn unsold tokens)

Financing the Photochain Project

Expenses	Total(in $ millions)
IT Development	30%
Marketing	30%
Copyright and Licensing	10%
Infrastructure	8%
R&D and Platform Evolution	5%
Legal, Accounting and Audit	4%
Cooperation with Photo Agencies	4%
Allocation to Contributors	4%
Business Development	3%
Conferences and Meetups	2%

In order to ensure speedy realization of the Photochain project, it’s necessary all Photochain Governance members are financed for full-time work. The team will be continually expanding, especially in areas of developing and marketing. Since, in our opinion, in some Blockchain projects, security considerations fade into the background, we will dedicate a lot of attention to this topic. The development of safe Smart Contracts is only possible through well-planned test phases. We are convinced that the long-term success of the platform can be guaranteed, among other things, by ensuring a safe environment.

Additionally, a lot of publicity work will be done. Especially meetups and other events will be used to approach the photographers’ community around the world. Since the legal situation of token projects are not completely cleared up yet, we will dedicate reasonable means to legal overheads.