The digital technology of blockchain, made famous by bitcoin, is making waves in the most unexpected of places: art. It is now serving artists, collectors and galleries. Clint McLean finds out how, and the many ways in which you can use it
Art may be the among the last things you would associate with blockchain. This, in itself, reflects a key problem with the technology; it’s too closely associated with cryptocurrency. As a consequence, it has made people sceptical about the electronic ledger system, simply because they may not believe a decentralized digital currency is feasible. Blockchain was created to make bitcoin possible, but there are endless industries that could, and do, benefit from the potentially revolutionary technology.
Take, for example, Maersk, the world’s largest shipping company, which is running a pilot project using blockchain to share shipping information. In one application it saw a 40 per cent savings in shipping time due to greater efficiency with paperwork. Walmart, meanwhile, now requires all of its lettuce suppliers to use the company blockchain to make tracking and monitoring easier and better. Estonia has also embraced blockchain to securely store the health records of its citizens, while advertising agency Adbank is using a combination of blockchain and AI to disrupt digital advertising. So perhaps the acceptance of blockchain by the 60 billion-dollar art and collectables industry isn’t so surprising after all. Yes, art on the blockchain.
So… what is blockchain?
Blockchain is a secure, transparent, electronic ledger system that doesn’t require the authority of a third party (such as a bank or government) to verify transactions. All involved parties can see the blockchain’s ‘contracts’ and, crucially, once data is written on them, they cannot be erased or edited – only added to. That means the history of all transactions is permanent, or ‘immutable’ as the blockchain community likes to say.
To use blockchain, you need an add-on like the popular (and free) Metamask which acts as both a wallet for your digital currency and a bridge that allows you to interact with Dapps (decentralized applications) from the Ethereum blockchain, directly from your computer. To do this, first, install the Metamask browser add-on to your Chrome, Opera, Firefox or Brave browser. Then sign up for a Metamask account and head to the Dapp you want to engage with.
Blockchain for art
The two biggest auction houses in the world, Christie’s and Sotheby’s, are also the art world’s heaviest users of blockchain. The decentralized technology is in its infancy, but there is a growing list of Dapps available to artists, buyers and sellers. Already you are able to sell your items through a decentralized auction house, buy shares in major pieces of art, buy insurance for your art, take out loans against your assets and perhaps, most importantly (since it makes some of the other options possible), you can register your art on the blockchain to record provenance.
Registering art on the blockchain
Provenance is essential for art and collectables. Being able to verify an item is what it is claimed to be is what gives the object value. This is true whether you are purchasing an artwork by an emerging artist that may appreciate over their lifetime (and beyond), or a piece already worth millions by a long-since-dead master. Recording provenance is one of blockchain’s most powerful attributes, and companies like Codex Protocol have sprung up to harness it for the art and collectables market.
Codex is an online registration service where artists, galleries or collectors can register their items to give them a digital identity. It allows data like artwork details, records of past sales, repairs, transport, exhibition history, appraisals and image hashes to be preserved on a single ‘block’ that is secure and sharable. According to Codex CEO Jessica Houlgrave (below), “Most of the fakes and forgeries that happen in the art and collectables ecosystem aren’t necessarily works of art being forged, but often the documentation. And by using this technology, you can eliminate that.”
Buying or selling shares in an artwork
For artists, museums and collectors looking to raise funds without selling items from their collection, blockchain start-up Maecenas offers a novel approach; selling shares of the artwork. Just like on the stock market, if the value of an artwork goes up, shares would be worth more, but if the value of the item goes down, so does the value of each share. So, if you’ve always dreamed of owning a Van Gogh or Picasso, but just don’t have the bucks, you may consider buying shares if a museum has one on offer. This is more of an investment approach of course, since you won’t actually get to hang the artwork in your living room. Still, you may feel satisfied just knowing a few of those famous brush strokes are yours.
Sell your work and cut out the middle man
If buying or selling artworks outright is more your thing, the decentralized gallery Portion may be a better fit for you. Portion is similar to an online auction house or digital gallery, but it is built using blockchain technology. Portion cuts out the middle man in art sales, not to mention their hefty fee, and is billed a ‘creator community’ where artists sell works directly to collectors. Portion is a nice fit for those with a little extra cryptocurrency in their digital wallet and could be your introduction to blockchain and to collecting.
The bottom line
There are heaps of ways for art lovers to benefit from blockchain technology and no doubt, there will be many more to come. Though it’s difficult for some to understand the inner-workings of blockchain, Houlgrave is quick to point out you don’t really have to. “I’m a big believer that eventually we will be using this technology and not need to know that it’s blockchain – in the way that when we use the internet we’re not thinking about how the internet works.” Houlgrave also cautions that, although blockchain technology is secure and transparent, you still need to do your due diligence on purchases. Blockchain isn’t infallible and it isn’t going to solve all of the world’s problems, but just maybe, just maybe, it will solve a couple of the pressing ones facing the art and collectables community.
Images courtesy of Getty Images and Codex Protocol
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