GUIDON Views :Blockchain in the Art World
Christie’s, the venerable 252-year-old auction house, may seem like one of the last institutions one might expect to embrace the potential of blockchain, a new disruptive technology. But recently it brought together technologists, art experts, entrepreneurs, financiers and lawyers at its London showrooms to discuss how blockchain could redefine processes and relationships in the art market. According to a specialist in Christie’s photographs department, blockchain had a “potentially revolutionary impact on our business” in its ability to host all data about an object or artwork, from catalogue details, sale prices and provenance, linked to invoices and certificates of authenticity.
Smart contracts – an innovation of the Ethereum blockchain on which nearly all artrelated blockchain activity is taking place – allow artists to make m ore m oney o ut of their work, even perhaps selling portions of their work on blockchain, bringing fractional ownership to the art market. One of the pioneers of blockchain- based digital art is Matt Hall, co- creator of “cryptopunks”, a series of 10,000 unique digital artworks in the shape of pixelated heads that he and his business partner released on Ethereum last year. They no longer control the art; it has taken on a life of its own, with rare cryptopunks changing hands for the equivalent of thousands of dollars. For art entrepreneurs wishing to launch services on Ethereum, the price of engaging with the network to set up or make changes to data – known as the “gas price” – is also painfully volatile. For some, the lack of a central authority overseeing the Ethereum blockchain is both its central appeal and its Achilles heel, since it leaves unanswered questions about what happens in the event of disputes. This is particularly acute where the blockchain is linked to artworks in the physical world. When that fire rips through the luxury apartment, who is in charge of telling the blockchain that the items in question are gone? If a trusted party is required to do that, then how decentralized is the system really, and how different is it from doing it the old-fashioned way? The need for expertise in navigating these dangerous shoals means, for the time being at least, that dealers and auction houses are likely to have a role to play. There are other reasons to keep a tight grip on the market. There are plenty of intermediaries who don’t have any interest in change. It’s a very small market, and very profitable for some. They may not be willing to let go of some of the margin for the market to grow.