12 Dec How Smart Contracts Can Bring Trust and Provenance to the Artworld
How Smart Contracts Can Bring Trust and Provenance to the Artworld
The artworld currently lacks one central resource that looks after the provenance of artwork. When you purchase an expensive artwork, you usually want some evidence that you’ve purchased an original artwork.
The following documentation is normally required with the sale of an artwork:
- An invoice: this acts as evidence that an artwork was sold / bought.
- A certificate of authenticity: this is a document that verifies the artwork’s authenticity.
These two documents are commonly referred to as the provenance of an artwork. There are a lot of issues surrounding the provenance of artwork in the current art ecosystem, such as:
- Invoices and certificates of authenticity are lost or destroyed in fires.
- Invoices and certificates of authenticity are kept in separate online databases.
- Invoices and certificates of authenticity are fabricated.
- Fake paintings are sold as an original, with sometimes multiple ‘originals’ being in circulation.
These examples show that the artworld is in need of an efficient and foolproof system that everyone involved in the artworld has access to in real time. So what is the solution?
Australian based company ArtChain Global are delivering the holy grail, solving the above problem of provenance and other art problems via their online art registry and trading platform. Their platform is built with the latest IoT and blockchain technologies, enabling the creation of smart contracts which can be stored securely on the blockchain.
To help you understand how this works, let’s first explain what blockchain and smart contracts are and then we will explain how they specifically solve provenance issues in the artworld.
Blockchain and Smart Contracts Explained
Very simply said, blockchain is a digital, secure and immutable ledger. Data or information on the blockchain cannot be altered once it is uploaded and recorded and it is visible to all participants in either a private or decentralised network.
Consolidation of all transactions and certificates of authenticity can be recorded in real time by having all artists, collectors and investors upload their information to a shared blockchain. This removes the need to manually keep documents for years after an artwork was created or bought.
Smart contracts are digital agreements that will self-execute when predetermined conditions are met. An example of a smart contract in the artworld is that payment is released by the ArtChain Global platform to an artist once the art buyer has recorded on the blockchain platform that they have received the artwork in good order, which is especially useful in cross-border sales.
Smart contracts on the blockchain have the following distinct advantages:
- Autonomy: There are no intermediaries in the process as the contract is executed automatically by the network.
- Trust: The contract is placed on a shared ledger and as such cannot be altered or removed by one party.
- Savings: There are no intermediaries involved so you don’t have to pay 3rd party fees.
- Safety: All documents are kept in a safe/encrypted environment and cannot be altered by parties with ulterior motives.
- Efficiency: Software code executes the smart contracts and removes the need for manual consolidation of dispersed hardcopy and digital records.
IoT Device Adds More Provenance to the Smart Contract Function
ArtChain Global enables smart contracts to add even more provenance to artwork via their IoT devices that can monitor the shipment from the artist’s studio, gallery or auction house all the way through to the art buyer’s chosen location.
It all starts with an IoT device, which can be attached to an artwork like a painting. The IoT device can objectively monitor various shipping conditions in real time without the need for third parties to scan barcodes or document any handovers, such as:
- Location: Both the buyer and seller can see where the artwork is at any time.
- Temperature: The buyer and seller can agree beforehand what the acceptable temperature range is and once the IoT device records that the temperature is either too high or too low, the sale can automatically be nullified and an insurance clause invoked.
- Humidity: Similar to temperature, the buyer and seller can agree on the acceptable humidity range before the artwork is put into transit.
- Pressure: The pressure on the artwork can be measured, such as the pressure on the canvas of a painting, to ensure that the artwork isn’t damaged in transit. The IoT device can also send an alert when it has been removed from the artwork. This enables both the buyer and seller to see where the painting is at the time this occurs and can in effect reduce the risk of theft and counterfeit.
All this collected data is uploaded and synchronized to the ArtChain Global blockchain in real time and is available to both buyer and seller. As the IoT device has a commercial life of between 8 -10 years, the IoT device can be kept on the artwork so that the provenance for any further sale of the artwork is also guaranteed. After all, the ArtChain Global blockchain database can show whether the IoT device was ever removed from the artwork, and if it wasn’t, everyone can be assured the artwork is still the original.
Other Advantages of ArtChain Global
ArtChain Global has many more advantages for artists and art buyers, as well as enabling smart contracts on the blockchain:
- It’s a global art gallery and enables artists to showcase their art to anyone in the world, while art buyers can find art from artists all over the world.
- Artists get rewarded with ArtChain Global tokens, which can be traded online for real currency, for uploading information about their art.
- Resale royalty payments to the original artist can be paid automatically.
- It protects an artist’s legacy as the information about their art is stored indefinitely and not in someone art studio, where documentation can get lost or stolen.
If you’re interested in using smart contracts on the blockchain when selling or buying your art, go to www.artchainglobal.com and register your interest to get notified when the platform goes live in February 2019.