CAMBRIDGE, MASS. — The adoption of blockchain technology has expanded to various business segments and gaining noticeable momentum in the art market.
Panelists participating in an Oct. 13 Massachusetts Institute of Technology event said blockchain is shaking up the art world as more people become educated about the benefits of digital registries and the authentication they enable.
The value of any piece of art is inextricably linked to its authenticity. As such, the decentralized, digital filing system enabled by blockchain is proving useful for anyone determining the worth of artworks. The technology is also making it easier for digital artists to sell their works while also documenting provenance, an important factor in preventing fraud and ensuring value.
Additionally, blockchain is enabling fractional ownership of art that now enables art lovers to own pieces of well-known — and expensive— works. The shift is expected to upend the traditional roles of the art pundits, Hacking Arts Festival panelists said.
“People who authenticate artworks won’t be as important and the middlemen will be part of the disruption,” said Dan Piech, founder and CEO of VAST Art Group LLC, a New York-based dealer of ultra high-definition photographs.
To limit the number of such works that are in print, VAST photographs are entered into a blockchain-based database and each digital image comes with a license and a security hologram. Such measures preserve the value of its pieces of art.
Blockchain technology, which is basically at the heart of bitcoin and other virtual currencies, is an ever-expanding list of records that can be continually updated by an unlimited number of users. The platform enables owners of digital assets, whether it’s a currency or a work of art, to transfer and record that transaction permanently and transparently.
Piech was part of a four-person panel at the two-day festival that examines the multiple places technology intersects with art. The festival, which completed its sixth year, included a hackathon in which teams of students collaborated to develop new approaches to art and technology.
The panel included Judy Mam, co-founder of DADA.nyc that Mam described as a “visual conversation platform” enabling digital artists to monetize their work using blockchain technology. DADA, which is operated by ShowOpp Inc., is providing artists with a platform to not only showcase their art, but monetize it also.
“Now they know (their work) have value … and you can transact them,” Mam said. “And that is a game changer.”
Art blogger Jason Bailey, the founder of the Boston-based Artnome website, said London-based Codex Labs Inc., California-based Verisart Inc. and New York-based Artory Inc. are the main operators of provenance-based blockchain art registries.
Ascribe, operated by Germany-based BigchainDB GmbH, and the Switzerland-based Ethereum Foundation are also operating blockchain-based registries.
Earlier this year, Codex CEO Mark Lurie cited the keys to blockchain’s value to the art world. “The amazing thing about blockchain technology is that it does not require any of the owners to disclose their identity,” he told the Art Newspaper. “That is the key to making a title registry palatable.”
However, blockchain technology is not without its challenges. Two of the most-often cited are interoperability and the low throughput. Blockchain-based systems need to work with each other and the number of transactions it processes needs to be highly scalable for it to be practical, the Alan Turing Institute reported in The Art Market 2.0 in May.
On Oct. 11, London-based auction house Christie’s Inc. announced that it was partnering with Artory to list the sales of artworks with its blockchain-based registry. Artwork from An American Place: The Barney A. Ebsworth Collection to be sold at Christie’s in November will include an encrypted certification of the sale for extra security. The measure is designed to provide the buyer with a permanent digital record about the artwork, according to a Christie’s news release.
“Blockchain technology works by registering significant events that take place in the lifecycle of an artwork, such as a public exhibition or sale at auction,” Christie’s officials said of the deal. “… Each buyer retains individual control of their personal information throughout the transaction process; Artory does not collect any personal information about buyers, and no personal information is recorded in their registry or on the blockchain.”
Christie’s characterized the arrangement with Artory as “an industry first.” Regardless, the alliance does provide quite a study in contrasts. The highly traditional and staid Christie’s was founded in 1766. Artory was launched in 2016 by Nanne Dekking, the former vice chairman and head of sales for the New York-based Sotheby’s auction house.