More and more people are starting to cite blockchains as the most disruptive technology since the introduction of the Internet.
In all honesty, they are probably not far from the truth.
Among all the industries lined up to feel the impact of decentralized and immutable digital records, the art market is arguably the most interesting one. Long dubbed as the least transparent billion dollar business, the art world may be in for the most revolutionary chapter in its recent history, one that will change the very core of the way it functions.
However, there are doubters out there who are still skeptical at what the art market stands to get out of blockchain.
Hoping to give an opportunity for art experts to weigh up pros and cons of the technology, Christie’s Art+Tech Summit tried to feel the art world's pulse and make a ruling on whether the industry is ready to turn its pages into the world of blockchain.
Following our recent study on the effects decentralized systems may have on the art market, WideWalls was quite intrigued to hear all the opinions being tossed around during the Christie's Exploring Blockchain — Is the Art World Ready For Consensus? event that took place on July 17, 2018.
What did the industry's experts have to say about the potential applications of blockchain within the art market?
At one point, the blockchain technology was best known as the basis of cryptocurrencies. However, it has since way surpassed the Bitcoins and Etheriums of the world, and its promise of transparency is poised to transform sectors like banking, insurance and, some say, art.
The most optimistic of us see an opportunity to iron out the archaic inefficiencies of the art world with the secure ledgers of blockchain, something that would result in essentially removing trust form the art purchasing equation.
Anne Bracegirdle, a specialist in the photographs department at Christie’s, agreed on this point of view during the first Art & Tech Summit:
More transparency equals more trust, more trust equals more transactions, more transactions equals stronger markets.
Bracegirdle also expressed her excitement about a potential industry-wide registry of all traded works of art, complete with cataloging details, certificates of authenticity, provenance records and sale prices.
Such a system would be possible if it relied on a blockchain-based infrastructure.
The spearheading idea Bracegirdle and her like-minded colleagues pitched during the Christie’s Art+Tech Summit was that a decentralized system could host verified information that would be accessible to all clients.
Such a system would handle and streamline information linked to insurance, transportation, appraisal requests and copyright issues.
Masha McConaghy, the co-founder of BigchainDB, also spoke about how the termination of a middleman would impact the market:
Galleries are not going to disappear, but their functions and value might change.
In the meantime, Niccolò Filippo Veneri Savoia, the founder of Look Lateral, a start-up aiming to develop fractional ownership of works of art, was more excited about the prospect of introducing tokenization to the increasingly financialised art market. The principle pitched by Look Lateral would greatly expand the market and give everyday people the opportunity to engage in fine art as an investment asset.
This would obviously bring huge liquidity to the market.
Finally, Christie's summit also saw a lot of experts debate about how blockchains could solve issues of counterfeiting and fraud, something that's been plaguing the art world for what seems like an eternity. By implementing a device for verifying the authenticity of an artwork, its chain of custody and sales history, the market would certainly be cleansed and revitalized - at least it seems that way in theory.
While many were quick to point out the benefits of blockchains as the Christie’s event progressed, some were eagerly awaiting an opportunity to explain why they do not see this new technology as something packing that strong of a revolutionary punch.
The main argument for those believing blockchains were not the best fit with the art world was that a decentralized database would still rely on the knowledge of "experts," or, as Nanne Dekking, the founder of Artory, called them, "key players doing their due diligence.” He also warned:
Blockchain is not a magical cure. We have to be careful we don’t corrupt systems with bad information.
Furthermore, John Zettler, the co-founder of the RARE Network, explained how blockchain could negatively affect the secondary market, cautioning that smart contracts, which execute and update themselves,
can do all the clearing of the secondary exchange.
It's hard to deny that blockchains could at least contribute to fabricating a more welcoming art ecosystem in which collectors routinely verify the authenticity, provenance and ownership of artworks.
There's still a lot of skepticism about implementing blockchains, as it was clearly evidenced by a lot of doubters present at the Christie’s First Art + Technology Summit. And a lot of their concerns were well-warranted. Throughout the duration of the summit, issues of data privacy, cybersecurity and competition laws were a hotly debated topic among the speakers.
Jonathan Kewley, a London-based technology lawyer, made a strong case by predicting a major stumbling block going forward:
A lot of nonsense is written about blockchain, that it frees us up from a digital oligarchy, which in theory is great. But, in reality, the majority of blockchain projects rely on cloud platforms, and who provides those platforms? A small number of big tech companies in the US that are pretty much unregulated.
There are a lot of obstacles currently standing in the way of blockchains making a change in the art world, sure. The market's unwillingness to embrace technology, limited collaboration, lack of trust and the fact only a limited few truly understand blockchains are just some of them.
But even all of these concerns combined are not a strong enough reason not to at least test the new technology out and see what blockchains can do within an art market context.
Featured image: The first Christie’s Art & Tech Summit focused on blockchain’s potential for the art business. Credit: Christie's Images. All images used for illustrative purposes only.