If you didn’t know better, you could say that blockchain was built for Fine Art.
Although a bold statement, the hyperbole is forgivable. And it comes down to one concept: provenance.
Defined as “…[a] record of ownership of a work of art or an antique, used as a guide to authenticity or quality…” (Oxford), provenance underscores the need for the ‘original artifact’ or ‘authentic original’ that drives the Fine Art Markets.
Without uniqueness or scarcity, fine art and certainly, its secondary markets, would not exist. The value and interest is in the appropriation of the human endeavor, captured in the one-of-a-kind or the few-of-a-kind.
Leonardo da Vinci’s Salvator Mundi would be given the $60 decorative value originally assigned to it, and no one would pay $115,000,000 for Pablo Picasso’s Fillette à la corbeille fleurie, 1905, let alone many millions for a Basquiat, or a Gursky limited edition photograph.
Blockchain is premised on that scarcity, that original artifact.
Bitcoin would not exist if blockchain had not solved the Double Spend problem. Each Bitcoin, as with any other digital asset, depends on the uniqueness and ownership of that uniqueness to have value.
Immutability, just as with fine art, is fundamental to blockchain. Authenticity is dependent on blocks of transactions, verifiable and not within anyone’s sole control or manipulation.
It is that transaction record which underscores the value of fine art. Traceability of transactions is the very essence of fine art. As with transaction blocks in the blockchain, secondary market transactions in fine art are dependent on there being a verifiable history of ownership tracking and recording the value of the work of fine art as the ‘authentic original’.
This is ever so important in dealing in prints and multiples. Take for example a limited edition photograph. Bought in the secondary market, on auction or otherwise, a buyer wants to know that the work came from the original source, is a part of the original edition authorized by the artist, and hasn’t been replicated, whether in another edition or series.
Too often, a ‘limited’ image is purchased, only to be found to be replicated in another edition or series, or distributed by another gallery. Anything that ties the work to its original source, be it the primary gallery, an auction sale, the time and circumstance of the production of the work, or the chain of title is key to fine art authenticity and value. Like blocks in a chain; tying fine art to its origin in a succession of immutable transactions.
But unlike blockchain digital currency transactions, where the identity of who held the digital asset at a given time has no bearing on its value, who is in the chain of title can add immense value to a work of fine art.
Christies demonstrated this, this month when it auctioned the George Michael Collection as both an Evening and on-line auction, on March 14th and, ending March 15th, respectively. A number of the works far exceeded their high estimates and the sale attracted a crowd of Michael fans, with the Evening sale bringing in nine and a quarter million pounds (including buyer’s premium).
Tracy Emins’ ‘George Loves Kenny’, a unique soft pink and pale blue neon sign, bought by Michael at the Lighthouse Gala Auction, at Christie’s London in 2007, went way above its GBP 60,000 high estimate, for GBP 347,250. Harland Miller’s 2007 oil on canvas, ‘Incurable Romantic Seeks Dirty Filthy Whore’, hit GBP237,500 off its high estimate of $60,000. These at the Evening sale.
The online auction put on similar flair, bringing in just over two million pounds sterling. Sam Taylor-Johnson’s ‘Bram Stoker’s Chair V’, a six in six edition from 2006 (bought by Michael from White Cube, again in 2007)was bid up to GBP 32,500 from a high estimate of GBP 12,000, and ‘Safe Sex Inspires Me’, a 2003 Rankin (John Rankin Waddell) c-print went for ten times its high estimate, at GBP 6,875.
Each of the pieces sold from George Michael’s collection will, immutably, have George’s ownership in it, from now and for ever more. That the works hung on his walls adds considerable value in the chain, and leaves an indelible impression on the works as a part of George’s legacy.
So fine art is a value chain. Its owners linked and connected in time, immutably. Just like the blockchain. But beyond this, blockchain will be an essential tool in keeping that fine art chain of title honest. A work disappears in time, only to resurface years later. The original artifact or a fake? A reproduction or a true edition?
Today we rely on experts. They too get things wrong, as we saw with Salvator Mundi, and countless others. And these are the high profile works. What about the editions or originals bought on a daily basis, from galleries, dealers and on auction?
Combining title, traditional certificates of authenticity and immutably and hashing them into the blockchain will, in time, provide a reliable, transparent and trustworthy source of provenance.
A chain of title made for fine art provenance, now securely titled and authenticated beyond the paper document given to you when you add your name to the list of owners.
Enriched by the hands which held it, fine art has a life and value beyond its mere materiality. It absorbs the lives, legacies and creativity of those who held and admired its beauty. George Michael is testament to that. Blockchain will perfect that connection.