Image shutterstock.com
We’ve all heard the words blockchain, cryptocurrencies, bitcoin and ethereum (ETH) thrown around in the news and on social platforms. However, if you are like me, largely you have let such words wash over you, resigned to the fact that they have little impact on ‘my world.’
That no longer seems a valid response. This week a leading Australian consortium of blockchain technologists and venture capital entrepreneurs, in partnerships with Melbourne’s Swinburne University of Technology, launched ArtChain Global (ACG).
In a nutshell, ArtChain Global is a digital platform that leverages secure blockchain technology to register, track, authenticate and trade art.
ArtsHub spoke with ArtChain Global’s Chief Operating Officer, Cameron Macqueen, who said, in his opinion, that the art industry is about to undergo a massive transformation – one that will make major headway into eradicating art forgery.
‘This is bringing the latest in trust and security technology to a traditionalist world for the benefit of the people,’ he said.
Simply, ACG will digitally store information on artworks, largely that of provenance (the history of ownership of an art work), which will allow quick verification of authenticity from anywhere in the world. It will also bring great transparency and regulation in a market that has historically been plagued by a lack of both.
Macqueen said the platform has the capacity to remove doubt and restore confidence in both buyers and sellers.
Great idea, but how does it work? ArtsHub spoke with blockchain expert, Greg Adamson, to run us through the basics, and shed light on how this new technology might impact what we do as artists, gallerists, collectors and arts professionals.
Image shutterstock.com
Getting your head around the 101 of ArtChain
Blockchain is essentially an information storage system, but unlike the mega centralised superdrives that take up an entire room and can be exposed by headquarter hacking, blockchain is a community that collectively stores data.
ArtChain breaks it down further for us in a White Paper: ‘Blockchain connects data (blocks) in chronological order to form a chronologically traceable and inalterable record of transactions by maintaining a shared ledger on multiple nodes in a network.’
Anyone anywhere in the world with a decent Internet connection and spare computing power, can help maintain this constantly expanding database of information.
What keeps the information secure is the unique cryptography of the blockchain – once it’s in the system it can never be fraudulently changed. This makes blockchain perfect for tracking the provenance of artworks.
Adamson explained: ‘When we look at art and the art industry, it is clear that there are many risk and challenges and a lot of those relate to trust. Did Brett Whiteley really paint this, or not? These challenges come down to accurate and centralised provenance.’
He continued: ‘It might be that you are an artist and you can’t afford to insure your work so you take a risk and don’t. But if you are able to register your work, then you are protected against theft. While you wouldn’t get a financial return (from ArtChain) if your registered works were stolen (like an insurance payout), by being globally registered makes it less attractive to steal.’
Adamson spoke of developments in the pharmaceutical industry, in particular in the US in relation to a new law that comes into effect in 2022 and states that all pharmaceutical companies need to be able to trace provenance from raw materials to the per dose delivery of a drug to eradicate the trade in fakes.
‘All these tablets are being numbered – encrypted – numbers are no problem. We can learn a lot from this,’ said Adamson.
Adamason said that ArtChain is not an honour system. ‘There will be some authorised or established process to provide that validation of artworks registered. There are thousands already existing in the world. We don’t want to replicate what everyone else does, rather we want to tie into those existing validation systems.’
ArtChain Global will also act as a discovery tool for users to buy and sell authentic art, opening up a global market for Australian artists who have registered their work by connecting them with buyers, auction houses, galleries, curators, and talent managers worldwide.
What this technology means to Australia
Following its Australian launch this week, ArtChain Global will launch in China next month – a strategic move to ensure it will become the preferred digital hub for authentic art from across the world.
ACG reports in its White paper: ‘It is estimated that the global art market is worth over USD $1 trillion. In 2016, total sales in the global art market reached approximately USD $60 billion as quoted by Art Economics.
‘Furthermore, with the development of the Internet, more than 90% of around 6,000 auction houses worldwide have offered their auctions online. The art auction market in China has become the largest globally, with an increasing number of top-level collectors (both individual and corporate collectors).
‘It is also worth mentioning that more than 30% of the artists on this year’s Top 500 Global Artists are from China (compared with 15% from the United States).’
Read: ArtChain Global White paper
Macaueen said that ArtChain Global is a great example of ‘Aussie initiative’, adding that there is not as much competition in that tech space here, than the US, and our geographic position in relation to Asia offers us a huge advantage.
The new platform will be built by Swinburne University of Technology who are the official research and development partner of ArtChain Global.
‘Swinburne and the Australian blockchain community are really at the forefront – really pushing how to showcase Australian business and University talent. We really only have about six months before someone else pops up and does something similar,’ said Macqueen.
He continued: ‘Blockchain needs to be developed quickly by its very nature. We have been working with Swinburne for months on this, and by September-October we anticipate a functional system with a solid Beta test system along the way. Just like software on your PC that you update, there is the capacity to grow the platform responsive to the sector’s needs.’
Adamson added of the Swinburne partnership: ‘Some people are doing very experimental things with blockchain, but the approach we are taking is to position ourselves as the leading edge – we are working from a very established position.’
The university’s position adds clout and respect, while the entrepreneurial edge places ACG well within the growing Asian market.
Adamson added: ‘There are many people around the world developing bitcoin, but there is an enormous advantage to having that technology side close to where the business is, to ensure that the functionality is developed and is responsive to artists and other people in the market.’
How can we be quick adopters of this new technology in our industry?
Anyone can use a website these day said Macqueen, and they are ensuring that the functionality of ArtChain Global will be as simple as using Google with a few extra fields.
Macqueen said: ‘We are not aspiring to turn artists into cybernetic creators. What we provide has to be simple and effective. It has to be intuitive and it has to not require be an expert in blockchain.’
‘Some people will just use it as the Wikipedia of art – a research tool with specific filters. Eventually, it will end up as a platform to buy and sell. We are not trying to take anything away from those traditional markets,’ he added.
Adamson told ArtsHub, ‘This is not about taking a percentage of a percentage say from an auction house or gallery. We are not about creating competition or duplication. It is about strengthening and protecting the art market for everyone.’
Macqueen said that ACG’s ideology is to increase traffic everywhere – not only transactions but to get eyeballs where they are not at the moment. That is great for a small art market like Australia, and to punch it into the hottest largest global art market – Asia – is an advantage for all Australian artists and dealers, not just a few.
Macqueen assured that the recent spike and fluctuations in the bitcoin market is not relevant to their model.
‘We would love that market to stay positive – it is part of the functionality of the crypto currency – but it is not directly related to what we are doing on our platform.’
ArtsHub is currently talking with gallerists and artists to gauge their view on this new technology and the ArtChain Global platform, and will report that opinion in the week to come.
