The vision of children’s cartoon hero, King Julian of the lemurs, might be fanciful, but he’s on to something. New technology is helping art professionals to work less and more efficiently when it comes to provenance, authenticity, and investment.
While we’ve been going about our busy lives, over the past few years a quiet revolution has been brewing in the art world thanks to blockchain, the system of decentralized digital ledgers originally created about nine years ago to power the controversial and volatile crypto-currency, Bitcoin, which has been creating a ruckus in recent weeks.
By the end of the next decade, the art world will be a very different place, and a number of pioneering companies are leading the way. How can blockchain make a difference in the art world? Let’s take a quick look at three main areas:
- Provenance – The main challenge encountered when determining the authenticity of art works, especially those dating before World War II, is finding accurate information to establish an unbroken chain of ownership since the moment the artwork was created. By using blockhain’s secure system, art dealers and collectors will be able to safely register information relating to past ownership, as well as every time the artwork changes hands in future commercial transactions. ArteQuesta, an art investment company, (http://www.artequesta.com/), is just one company using blockchain to track and register provenance.
- Authentication – A more reliable listing of past and current owners will lead to greater transparency, making authentication much easier. Blockchain will certainly pose a challenge to those sellers who hitherto have profited from the inherent lack of transparency in the art trade. Scandals in recent years revealed charismatic but unscrupulous dealers who were able to perpetrate stunning cases of fraud on unsuspecting collectors. One company, Verisart (https://www.verisart.com/), is already tackling this challenge and bringing change to the art market, generating “permanent and secure certification.”
- Tokenization – With a more reliable system of provenance and authentication, the financial art market will be streamlined and secure. Investment companies can more readily ‘tokenize’ major art works, usually those worth over $1 million. Take for example, Maecenas (https://www.maecenas.co/), marketed as a “decentralised art gallery,” and “the first open blockchain platform that democratises access to Fine Art.” Companies such as Maecenas make it possible to buy shares in an artwork, just as you’d buy shares in a company. Since administrative costs will be much less than at auction houses, broker fees will be much lower, about 2 percent, compared to 15 to 20 percent at major auctions houses. (Not to mention that investors won’t have to deal with the costs of insurance, transportation, storage and conservation.)
These changes will take time to be widely integrated into the art world, and there will be resistance from those unwilling to change their ways. But the power of the new technology will eventually tear down the walls of the status quo, and push the market towards more transparency and efficiency.
Written by John Varoli.
The article is reprinted with permission from New Art Academy.