Mar 20, 2017

Blockchain: Could Bitcoin’s Technology Revolutionise the Art Market?

The technology behind Bitcoin is being widely adopted by a number of industries. Could it bring transparency to the art market?
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Blockchain technology rose to prominence as a key element to the success of Bitcoin. It’s essentially a public database of transactions, permanently recorded and highly secure.

Since its inception many industries have been looking to experiment and adopt the technology, with particular success in financial industries.

But what could its uses be in the art world?

Well, firstly there’s an opportunity for increased transparency. “The art market has flourished because of the lack of transactional standards and transparency,” says Judith Pearson, the co-founder of Aris, a leading art title insurer. But a public, secure, digital ledger like blockchain could track an artwork’s movements, giving confidence in provenance, a marked improvement on the current paper-based solution.

There are also huge potential benefits for artists to recognise value in their work. Masha McConaghy, the co-founder of Ascribe, which aims to increase the capability to own and control intellectual property in the digital age sees blockchain as a key factor in an artist’s ability to take back control of their digital copyright. ‘The value of a work is based on its provenance, but how do you track the provenance of a digital work that can be copied for free, millions of times, and spread throughout the world?’

Amy Whitaker, an assistant professor of visual arts management at NYU Steinhardt sees the potential for artists to retain an ‘equity share’ in their works, so that they can benefit from the increased value of their work, rather than only seeing the return on the initial sale.

In her vision, an artist could retain say a 10% stake in a work and generate income each time it is sold at auction. A work originally sold for $1,000 but resold at auction for $100,000 would see an artist receive an income of $10,500 from the combined sales value rather than the standard 50% ($500) they would see today from the original sale.

Not everyone is excited about the potential blockchain technology has for the industry however. Ben Vickers, the curator of digital at London’s Serpentine Galleries, organised a conference in March to discuss the potential impact. “We organised [the conference] because we’re quite worried about blockchain. Technologies have a tendency towards shaping reality in ways that people don’t perceive. Blockchain is particularly terrifying because it has such profound implications for governance, identity and global supply chains.”

While the benefits for introducing blockchain technologies for artists seem obvious, there may be reluctance within the wider industry structure of galleries and auction houses to adopt this technology, preferring instead to stick to the status quo. It remains to be seen whether technological innovation can drive the industry towards change or whether the existing industry structure will prevail.