The blockchain and the art market: evolution or revolution?

in blockchain •  last year


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Digitization wins the art market. If many problems are solved, others do not fail to appear.

The art market - one of the oldest markets in the world and also one of the most deregulated (just after the weapons) - has for five years undergone an extraordinary evolution: digitization.

Now that you are a collector, merchant, gallery owner or cultural institution, you no longer need to physically see a work, touch it or scrutinize it to its smallest details, 3D imagery and augmented reality are there to be your eyes and your hands. No need to browse galleries, merchants or auction rooms looking for rare pearls, post a few alerts (on Artsy or Lotprivé) and your favorite lots will be waiting for you in your e-mail box.

Finally, no more need to encumber heavy catalogs of auctions, catalogs or artist monographs, a simple search on databases (Artprice, Artnet, or Auction) makes it possible to find all the history Of the price of a work.
A beneficial evolution, but ...

This evolution has greatly benefited artists as more and more sites propose to put their works online and allow artists to be in contact with end customers and to bypass the expensive system of galleries.

Thus, digitization has allowed us to introduce a little transparency into an opaque market, to restore some confidence in a market of dupe and more generally to free the actors from the neurasthenia of intermediaries. In short, go towards more regulation.

But the digitization of the art market still poses a number of questions, the most important of which is the difficulty of confirming the authenticity of a work, the cornerstone on which the entire art market rests. This is where the blockchain comes in and could represent a real revolution.


The advantages of the blockchain

Everyone has heard of the blockchain. In a few words (non-technical), blockchain is a revolutionary information storage technology (such as the punch card, floppy disk or CD-ROM) and the transmission of this information via the Internet. Why revolutionary?

It is transparent (everyone can consult all the exchanges or transactions that have occurred in the blockchain since its creation), ultra-secure (as the name suggests, the blockchain works thanks to separate encrypted blocks that are validated one by One by trusted third parties) and decentralized (blockchain technology is not supervised by any central body since it is based on peer relationships).

Starting today, thanks to the blockchain, start-ups (like the young French Seezart shoot) make it possible for any actor in the art market (artist, copyright holders, collector, Gallery, merchant, auction house and even cultural institutions) to record his works, locate them, trace their origin or even authenticate them.

For now, authentication is declarative according to experts more or less accredited. Starting tomorrow, the technology still in its early stages of image recognition will make it possible to identify certain works in a certain and unique way and to reinforce their authenticity, the main weakness of online commerce evoked by the market players (according to "Hiscox Online Art Trade Report 2017 ", 87% of the buyers surveyed declared that" a certificate of authenticity would help justify their purchase "of a work of art.


The market for certificates of authenticity

All this is very promising but is it finally well suited to the art market? Indeed, if we look more specifically at the market (it is a market) of certificates of authenticity, what are we observing?

In Europe, the market for certificates of authenticity is a heavenly manna for many artists (once they sell their work some do not hesitate to ask for large sums to issue paper certificates of authenticity), for rights holders of Artists (often dead before their own birth ...), for experts more or less self-proclaimed specialists of an artist (like the late Jacques Polieri for Jean-Michel Atlan), for important galleries (like the Gagosian gallery or the Perrotin gallery ), Or certain foundations (such as the Wildenstein foundation), which bought the archives of known artists at a gold price from beneficiaries entitled to earnings, and in turn issue certificates for finance.

These processes may sound shocking but they are not in the least. On the contrary. Who would want to possess a work without having the indisputable proof of its authenticity? This is well worth a few hundred euros. Nevertheless, questions remain.

Certainly the blockchain will make it possible to technically create a unique and unfalsifiable digital fingerprint for each work of art certified through it, but what about the role of current "certifiers" who are key stakeholders in the process? If they act as trusted third parties (which would be a true added value for an online marketplace), how can we compensate for the loss of this windfall in a model based on free information and block validation?

WHO governs the blockchain?



The delicate problem of governance

Beyond the central question of authenticity, a more general question about blockchain emanates. Indeed, by the very fact of its DNA, that is to say, the technological choices decided by its user community (thus generating conflicts) and its transmission channel (the Internet), all problems related to The governance of the Internet also arise for the blockchain.

The first response was the introduction of D.A.O. (Decentralized Autonomous Organizations) which are digital organizations that provide transparent and unchanging governance rules (since they are written in the blockchain) to a user community. But what is the real legality of these rules in an Internet world guided by "code is law"? What is the legitimacy of the small community at the head of the D.A.O. And enacting these rules?

The example of the Bitcoin is edifying but very instructive. The bitcoin is an encrypted electronic currency circulating on the Internet since 2008 as part of the first blockchain ever created. The very laudable objective of this currency was to avoid trade, based on the choice of a currency that could be manipulated (eg devaluation) by certain financial actors or governments.

The Conversation But as a payment instrument, the need for governance and regulation has emerged for the bitcoin and a small part of the community (the "capitalists") has begun to play this role and to decide for others. The result is that today there are 16 million bitcoins in circulation, of which about 3.5 million (or 20%) are held by this hundred "capitalists". In-depth reflection remains to be carried out so that what the digitization has made possible in terms of regulation of the art market, the blockchain can not undo!



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Thanks for reading!

Article translated and adapted from Jean-Max Koskievic

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I have followed and upvoted you plz follow and upvote me back

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I upvoted you, but my voting power is really weak. :)

Cool. Here's another blockchain art project https://cofound.it/en/projects/maecenas/

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Great. ;)

Evolution or revolution?
Both.
Have a like - nice post.

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You're right! Thanks

great really informative
ok i vote you my friend

I love the mage image 😍👍👍

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