pThe Hubii NetworkA blockchain-based decentralised contentmarketplaceJacobo Toll-Messia, Jens Ivar Jrdre, Mark Briscombe, David Schlesinger, yvind Pedersen Jr, September 10, 2017Contents1 Preface 22 Introduction 33 Current Status of the Industry 53.1 Players and Their Pain Points . . . . . . . . . . . . . . . . . . . . . . . . 53.1.1 Content Creators . . . . . . . . . . . . . . . . . . . . . . . . . . 53.1.2 Emerging Content Distributors . . . . . . . . . . . . . . . . . . 53.1.3 Content Consumers . . . . . . . . . . . . . . . . . . . . . . . . . 63.2 New Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Hubii Network 74.1 Two Sided Marketplace Dynamics . . . . . . . . . . . . . . . . . . . . . 74.2 Business Model Guiding Principles . . . . . . . . . . . . . . . . . . . . . 84.3 Digital Rights Management . . . . . . . . . . . . . . . . . . . . . . . . . 95 Use Cases 105.1 Content Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.2 Amplifying Content Reach . . . . . . . . . . . . . . . . . . . . . . . . . 105.3 Fake News Detection . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.4 Tipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.5 Smart Crowdfunding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 Road Map 137 Feedback from Within the Industry 168 Storage 179 Removing Exchange Rate Risk 1810 Verif_ication of Content Rights in Hubii Smart Contracts 2010.1 Protecting Intellectual Property . . . . . . . . . . . . . . . . . . . . . . 2010.2 Rapid Consensus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2110.3 De-verifying Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2110.4 ’Fake News’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2210.5 Illegal Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2210.6 Vulnerability to Sybil Attack . . . . . . . . . . . . . . . . . . . . . . . . 2211 Transparency 24212 Key Team Members 2513 Token Launch 2613.1 Minimum target . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2713.2 ETH volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2713.3 Exchange rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2713.4 Tokens generated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2713.5 Launch date and time . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2813.6 Contract address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2813.7 Gas Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2813.8 Refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2813.9 Sale timing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2814 Hubiit FAQs 2914.1 What is a Hubiit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2914.2 Will there be any future Hubiit token sales . . . . . . . . . . . . . . . 2914.3 What currencies will be accepted to purchase Hubiits . . . . . . . . . 2914.4 Why does the Hubii Network need a native token . . . . . . . . . . . . 2914.5 Why are we conf_ident Hubii can change the industry . . . . . . . . . . 2914.6 How will Hubii hold the funds collected . . . . . . . . . . . . . . . . . 3014.7 What safeguards are in place to ensure the contract is correct . . . . . 3014.8 Will Hubiits be transferrable . . . . . . . . . . . . . . . . . . . . . . . 3014.9 How ambitious are we . . . . . . . . . . . . . . . . . . . . . . . . . . . 3014.10 Philosophy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3115 Budget Allocation 3216 Afterword 3317 Appendix 3417.1 Volatility of Hubiits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34AbstractWe are consuming more content than ever; 3.6 billion people read the news, listento music or podcasts and watch videos and movies online every day.Supply and demand of content is constantly growing, however the fundamentaldynamics of the media industry are sub-optimal and a paradigm shift is required.Writers, musicians, movie-makers and producers should be able to f_ind and re-ward each other without the need for an intermediary i.e. a media company,other than the plat upon which an article or video is published.Hubii Network is a blockchain-based decentralised content marketplace that fa-cilitates transactions between creators, distributors and consumers by leveragingthe power of smart contracts1. Kickstarting this marketplace is Hubii’s existingdistribution network reaching out to over 50 million people.By replacing the middlemen with an ef_f_icient infrastructure, content creators earnmore, distributors pay less and consumers have more choices. Smart contracts and‘smart crowdfunding’, all using our native cryptocurrency, Hubiits, will shape thecontent industry of the future.1Ethereum whitepaper11 PrefaceHubii is a Norwegian startup with headquarters in Bergen and subsidiaries in theUSA and Singapore. We have received international recognition2, 3 as a location-basednews aggregator and established global partnerships with leading companies acrossthe world4, 5.Hubii has been working between content creators and distributors telecom opera-tors, OEMs, and app developers, facilitating the development of their own productsusing Hubii’s engine.This has allowed Hubii to build a distribution network reaching out to 50m users everyday. We have 560 publishers and syndication partners around the globe.Hubii’s team has been interacting with blockchains since mid-2011, but now we havethe right business model and technology to aggressively deliver our ambitions.This year, Hubii’s team committed to building a blockchain-based decentralised con-tent marketplace specif_ically Ethereum-based, extending our content of_fering fromtext to include still images, audio and video.2Red Herring 20133Red Herring 20154Mozilla blog5Panasonic blog22 IntroductionThe number of internet users will exceed 3.8Bn in 20186 and is forecast to grow at asteady 10 per year7. This growth is mirrored in the amount of time spent online peruser, which is growing by 5 to 6.8While the growing market means ever greater demand and reach for content, it isbecoming all the more dif_f_icult for content creators to maintain control over their cre-ative works and keep a fair share of the revenue generated. Another topical challengeis the concept of ‘fake news’ and the need to determine the provenance of content. Thewhole media industry is broken and blockchain technology will help us to f_ix it.By 2020 the media industry as a whole will pick up to over 2 trillion9 and it is Hubii’sf_irm belief that the inef_f_iciencies in the market and industry can be solved through theuse of blockchain technology and the application of smart contracts.Figure 1 PwC’s 2017 Global Entertainment amp; Media Outlook revenue forecastHubii’s mission is to create a new leading Ethereum-based decentralised content mar-ketplace where creators and rightsholders can meet distribution networks and reachcontent buyers directly, all while having total conf_idence in maintaining the integrityof their rights through the use of smart contracts.6eMarketer, April 20167Internet World Stats8GSMA Intelligence9PwC’s 2017 Global Entertainment amp; Media Outlook3Only a proven media partner with existing relationships can do the job - and thusbuilding on our knowledge and connections of the past f_ive years, we introduce HubiiNetwork.43 Current Status of the IndustryThe current status of the content industry can be analysed from many dif_ferent angles.Here we shed more light on this.3.1 Players and Their Pain PointsThe three main actors in the value chain, creators, distributors and consumers, suf_ferfrom dif_ferent pain points.3.1.1 Content CreatorsContent creators face the following issues They often do not get suf_f_iciently rewarded for their work and their compensa-tion is not related to the revenue generated. They lose control of their works once their content is published. Separate engagements with multiple distributors add complexity to their saleprocess. There is a lack of data driven tools giving them insights into the consumer’sinteractions with their content.3.1.2 Emerging Content DistributorsEmerging content distributors such as phone manufacturers, telecom operators andapp developers, are embedding themselves as trusted content providers of_fering ser-vices to their users. This strategy is allowing them to leverage their large user baseand of_fer value-added services engaging the users for longer periods of time and con-sequently monetising them.They are, however, suf_fering the following pain points They have to pay hefty fees to a variety of middlemen to get hold of content.This means they operate on small margins and this often pushes them to acquirelower quality content. As emerging distributors, they do not have strong or well-ed content strate-gies. Their content is usually second-hand or non-premium. They require a combination of international and local content due to their userbase.53.1.3 Content ConsumersContent consumers suf_fer from the following problems Users are hit with a constant wave of content where is it dif_f_icult to separatesignal from noise. They have to use multiple plats to get hold of dif_ferent types of content. The content quality is below the desired standard. They are exposed to hundreds of ads a day.3.2 New TrendsThe developing world is rapidly growing and is thirsty for content; Thailand with 68million inhabitants, Philippines with 100 million, Myanmar with 54 million, Malaysiawith 10 million and Indonesia with 260 million inhabitants are examples of large mar-kets that are coming online which will not follow the technology adoption path of mostwestern countries. Furthermore, they are reshaping how content consumption takesplace. Hubii’s existing relationships in the developing world are extensive, giving usinsight and a plat ripe for leverage.From a content point of view, we are seeing an explosion in the numbers of content-creating smartphone apps entering the market, across a range of areas such as enter-tainment, education, communication and utility. Within 5 years, 80 of the adult worldwill have an smartphone.10New business models have been opened up by the internet, and we have seen a surgein the number of value-added apps and services for smartphones and web.As a result, these new players have the opportunity to amplify the content reach andof_fer services across a range of basic handsets, ef_fectively catering to the needs of alltheir subscribers. Brands need to develop content which is device-agnostic, therebymaximising the number of customers being targeted. This approach is particularlyef_fective when combined with localised content, tailored specif_ically to particular ge-ographic regions or sets of users.There is a need and space for a player that is willing to ease the existing pain pointshereby presented, building the solution around content creators and rightholders; em-powering journalists, musicians and movie makers with the ability to reach out tomillions of users in a frictionless manner and monetise their works.10GSMA Intelligence64 Hubii NetworkHubii Network is an Ethereum-based decentralised content marketplace where theproduction, distribution and consumption of content is re-shaped by leveraging themechanisms that Ethereum of_fers.Hubii Network shall apply a market structure by nurturing and managing perfect com-petition11 to thrive. In other words, a market should be free of monopoly and controlledby individual participants.The trustless nature of cryptocurrency will allow all parties to make an exchange with-out the oversight or intermediation of a third party. This will reduce or even eliminatecounterparty risk.The objective is to establish a healthy ecosystem whereby creators can def_ine theirrules of engagement, distributors get access to a constant pool of content and con-sumers ultimately get hold of the content they desire.Making use of smart contracts and smart properties will allow Hubii Network to f_ixthe pain points in the industry and, furthermore, apply mechanisms never seen beforein the market. All this will be delivered whilst having full transparency, accountabilityand security over the transactions using our own cryptocurrency, Hubiits12 HUBs.The long term goal is for the entire Hubii Network to be open source and decentralisedin nature.4.1 Two Sided Marketplace DynamicsWe will utilise cross-side network ef_fects in our marketplace. The value for a contentcreator joining Hubii Network is a function of the number of distributors and con-sumers that are present. Similarly, for distributors and consumers, the value is relatedto the number of content creators publishing their work within Hubii Network. Hubiihas proven experience building this type of market already.Demand liquidity is the single biggest challenge in any cross-side network ef_fect plat-, creating a chicken amp; egg problem; a band would not be willing to distribute theirsongs through the plat if there are not enough distributors/consumers in it. In our11Where 1 all f_irms sell an identical product, 2 all f_irms are price takers, 3 all f_irms have rela-tively small market share, 4 buyers have complete ination about the product being sold and theprices charged by each f_irm and 5 the industry is characterized by freedom of entry and exit.12Our fully featured ERC20 token7case that issue is already solved thanks to our existing distribution pipeline.We already have a large set of distribution partners, reaching out to over 50 mil-lion daily users, currently supplying content from Hubii. We believe this strength,together with the introduction of Hubiits and heavy use of smart contracts to securethe monetary transactions and IP rights, will act as an incentive to attract content pro-ducers.Furthermore, we have the possibility to enable distribution partnerships that couldreach out to over 800 million people daily. Therefore, as the supply of content in-creases the marketplace could amplify its reach extremely rapidly.The go-to-market strategy will require the motivation of both creators and distrib-utors, using dif_ferent approaches. We will expand our distribution network, signingexclusive deals with distributors in specif_ic regions for a period of time in return fora minimum investment commitment. The distributor must purchase content from theHubii Network and promote us within that region.The Hubii Network will leverage the existing Hubii business. This product has helpedconnect content creators and distributors already. The aim is always to maximise rev-enue and enhance content consumptionTo accelerate wide adoption and integration of/p