Our friends at the Clarion list have recently posted an interesting article on some of the new technology currently being offered and used within and around the art market. many of you have probably heard of Bitcoin, but what about blcokchain databases?
The Clarion list does a nice job in explaining how these new technologies work and are being integrated into the art market. As appraisers we often consult with clients on non-value related topics, and with that we should also be aware of new technologies which might assist our clients.
I think the Clarion List has an interesting business model, where they are not only a listing service or database of fine art providers and allied professionals, but through their site and blog promote their members and some of the interesting cutting edge technology being offered.
The Clarion List reports
Source: The Clarion ListThe Art World Goes High-Tech: Bitcoins, Blockchain and Databases
The Cutting Edge Technology Companies Changing How We Search for and Authenticate Art
A handful of tech-savvy companies are shaking up old-school art world ideas about certification, provenance, and registry. Online databases are offering new, centralized platforms to track artwork. These services offer digital ledgers and certificates of authenticity and some--blockchain databases--provide the opportunity for users to carry out transactions in bitcoins (a type of digital currency). The databases, with varying degrees of privacy, can both facilitate purchasing and document each time a work changes owner.
As the world becomes increasingly cash-free, records of all kinds move from the physical to the virtual realm, and new technologies boost security in a variety of industries, a handful of enterprising brands are attempting to link these trends to art business. A few include Verisart (based in Los Angeles), Tagsmart (based in London), Blockai (based in San Francisco), and Ascribe (based in Berlin). “The art world is notorious for never being the first to adopt new technologies,” says Tagsmart CEO Lawrence Merritt.
We investigated what these new services offer to anyone buying or selling art. Are dealers, collectors, and artists finally ready for big changes? We hope so.
WHO IT’S FOR
Robert Norton, Founder and CEO of Verisart, describes how his goals for the company have shifted. When he launched in 2015, he was interested in how the blockchain database could serve as part of an online marketplace. Now, he says, “we’re really just focused on building a distributed registry for artworks.” He and his team are concerned with expanding their reach by expanding the amount of artwork on the site. Artists list their own pieces (with an image and all relevant information), ensuring authenticity. According to Norton, his team met their 2016 milestones, and 1,000 artworks are now listed on the platform. His most well-known artist is Shepard Fairey, popular recently for his evocative political images (he designed Barack Obama’s “HOPE” poster and the widespread graphic of a woman wearing an American flag head scarf). Fairey is also an investor in the business. Other notable contributors include British photographer Alison Jackson, American painter Dustin Pevey, and Russian art collective AES+F. At the moment, Verisart’s members (the service is invitation-only) are 90 percent artists and 10 percent collectors, though Norton hopes it will reverse in the future.
As the business expands, Norton envisions myriad opportunities for collectors. People will pay for works on the site with bitcoins and transfer certificates. Additional features will also be available: collectors will be able to look at the detailed provenance for an art work and get in touch with a work’s owner directly. Using bitcoins will ensure a clear record of payment.
In contrast, Tagsmart is operating without a blockchain. Their alternative database structure is similarly secure and encrypted, and Merritt asserts that their goal is “to make fakes and forgeries obsolete.” He and his team have built a system with tens of thousands of records, created by artists, estates, and galleries. Some prominent artists that they have worked with include Chris Levine, Marc Quinn and Mario Testino, with whom they co-developed the aluminium tag for his photographs.
HOW IT WORKS
No matter your level of technological sophistication, the mechanics of the blockchain database and bitcoins can be difficult to grasp. Luckily, these companies build user-friendly interfaces that are intuitive and clear. The Verisart certificate does indeed resemble a real certificate of authenticity. It depicts an image of the art work and lists its title, production date, medium, artist’s signature, and dimensions. The “current owner” category gives a code that consists of a jumble of numbers and letters, allowing the owner to maintain privacy. Click on the hash sign at the bottom right of the certificate, and you’ll reach a page that shows all the transactions (encoded, again, to protect privacy) that the work has undergone.
On his end, Merritt speaks about Tagsmart’s registration process. The company contacts everyone who registers before they create an online account--there’s no online, automated process. Through making calls, visiting, and requesting proof of identity, they verify the identities of all their users and ensure the security of their services.
WHAT THE FUTURE HOLDS
“Our vision here,” says Norton, “is to build a sense of distributed trust in the art world, which maintains the anonymity of users. Verisart will show “proof points of existence for works” and aid liquidity in the market. He points out that, so far, the online art market has been “relatively anemic” compared to other luxury markets and suggests that a lack of trust is one of the major hurdles. Verisart is helping establish new standards.
In April, Tagsmart will launch in the United States and introduce a “canvas tag,” a certification for works on canvas. At that point, the company will have the means to “tag” what Merritt calls the “holy trinity” of art forms--paper and aluminum (frequently used by photographers) are the other two.
As the platforms grow, collectors will be able to certify their own holdings and seek out images and works from particular artists. The databases may be able to foster communication in a private, reliable way that might cut out some middlemen (a gallery, an auction house, an independent dealer). Documents from the database can also be used in a court of law to defend authenticity. These complicated mechanisms might just make the nebulous world of art business much simpler.
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