Company updates

Blockchain Art Chipping – Still a Work In Progress


Written by
Bálint Ferenczy

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23 November 2018

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Buying and selling artworks online has revolutionised the way the art market works. However, when deciding to buy an artwork, whether in the form of tokenized shares, or in the traditional way of collecting the physical artwork, trust remains a vital component. The 2018 annual Hiscox report found more than 50% of collectors were held back from buying works of art online due to the fear of buying a fake.

Old-school authentication has relied on expert opinions; in other words, connoisseurship. For centuries, seasoned art-historians and specialists gathered to decide whether a painting was authentic or not. But, multiple cases have proven that not only can the human eye be easily tricked, but scientific methods can also be manipulated.

Stepping into the 21st century, new art business organisations such as Maecenas are focused on offering authentic artworks with impeccable provenance and condition reports.

Our rigorous and thorough due diligence procedure is still based on our experts’ vetting process. But it is now more important than ever to explore new, decentralised tools when determining the authenticity of an artwork.

Electronic or online tagging has been touted as the ideal solution to allay buyers’ worries. Registering crucial data-points in the blockchain, such as ownership history, important exhibitions, shipping documentation and so on, allows owners to track an artwork’s complete history and physical movements. In this way, blockchain technology, perhaps best known for originally serving as the public ledger for bitcoin, has created an opportunity to build a secure database for artworks too. Just as any mined bitcoin can be verified and tracked, tagged artworks can be as well through a similar database.


Verified Art Work

Companies, like Verisart or Monegraph, are already providing token verification, which serves as a certification of authenticity. When an artwork is sold, the new owner receives a digital token that serves to registers his/her new acquisition online, and adding a new block in the time stamp of the blockchain. Consequently, if all information is properly uploaded to a trusted and secure provider, forgeries can be readily identified. For the system to fulfil its promise, it is necessary to have a secure and accessible database in place. Ultimately though, the onus falls on all art buyers, sellers and artists to submit the necessary information accurately to the database.

At the same time, some sceptics of online tagging have argued for a more conventional method of physically (i.e. “offline”) tagging/chipping artworks. Conventional in its form, but cutting-edge in its execution, the tag functions as the artwork’s synthetic DNA. Don’t be afraid of the scientific description. In layman’s terms, it simply refers to a unique signature or stamp, which is – preferably – immediately attached to the artwork after its completion, the size of a small coin or stamp. This supposedly tamper-proof synthetic DNA label is applied by the artists themselves or by a company specialised in the technology, such as Tagsmart. After the work is tagged, its unique serial number is registered in the Tagsmart online database and can be checked and confirmed at any point of time. However, while the tag could confirm the work’s authenticity, it wouldn’t provide comprehensive information on its provenance.

A third method, by the New York-based technology company, Blockchain Art Collective, is designed to create a blockchain-based registry, with the addition of physical NFC tags, attached to the works themselves. The artwork can then be scanned by a mobile application and new information added to the company’s database.


Who Tags the Art?

Whether it is online or offline chipping, each artwork has to be modified with the addition of a tag and to-date there is little evidence that these different tagging methods are actually tamper-proof.

This solution might work for living artists, assuming that the artists themselves apply the chip at the time of creation, but it is less helpful with authenticity issues of Old Masters or any works where the artists are no longer living.

In those cases, the questions remain – who is responsible for applying the tag; are they liable; and most importantly, will this actually resolve any trust issues?

At this point, it is difficult to say whether the online, offline or their combined methods will bring us closer to a 100% forgery-free art world. Perhaps a combination of them could. But it is safe to state that keeping our eyes open for the latest technological innovations will hopefully help us access a more democratized and transparent art world.

Topics: Company updates

Bálint Ferenczy

Written by Bálint Ferenczy

Bálint has an MA degree in History of Photography from Sotheby’s Institute of Art, London, as well as a degree in Art History and Arts & Cultural Management studied in both Hungary and the USA. The primary and secondary market experience he gained working at Sotheby’s Auction House, several galleries and while on the curatorial board of the József Pécsi Photography Grant, fills him with confidence to advise collectors about what their collections strategically need. Bálint is a guest lecturer at the Moholy-Nagy University of Art and Design (Budapest) and a regular consultant and researcher at Műértő – The Hungarian Art Newspaper focusing on the Central and Eastern European region. From 2017 he sits on the board of the Studio of Young Photographers, Hungary and was a jury member of Capa Center’s 2018 Portfolio Review. Bálint is currently completing a Ph.D. programme in Business Administration at the István Széchenyi University, researching public art funding models.

Please read the following disclaimer >

This blog post is illustrative and for informative and general education and discussion purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation. This information is provided with the understanding that with respect to the material provided herein (i) MAECENAS is not acting in a fiduciary or advisory capacity under any contract with you, or any applicable law or regulation, (ii) that you will make your own independent decision with respect to any course of action in connection herewith, as to whether such course of action is appropriate or proper based on your own judgment and your specific circumstances and objectives, (iii) that you are capable of understanding and assessing the merits of a course of action and evaluating investment risks independently.. MAECENAS does not purport to and does not, in any fashion, provide tax, accounting, actuarial, recordkeeping, legal, broker/dealer or any related services. You should consult your advisors with respect to these areas and any material with regards to investment decisions. You may not rely on the material contained herein. MAECENAS shall not have any liability for any damages of any kind whatsoever relating to this material. No part of this document may be reproduced in any manner, in whole or in part, without the written permission of MAECENAS except for your internal and/or personal use. This material is being provided to you at no cost and any fees paid by you to MAECENAS are solely general educational purposes. All of the foregoing statements apply regardless of (i) whether you now currently or may in the future become a user of MAECENAS’s platform or products and (ii) the terms contained in any applicable contract between you and MAECENAS.

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