The 2009
book, How a Con Man and a Forger Rewrote
the History of Modern Art, unravels how British conman John
Drewe and artist John
Myatt committed what Scotland Yard called the biggest art fraud of the
20th century. Between 1986 and
1995, the two men managed to place on the art market more than 200 counterfeits
posing as original artworks by the likes of Alberto Giacometti, Georges Braque
and Nicolas de Stael, in great part thanks to Drewe’s ability to fake the
paintings' provenance. From creating catalogues for exhibitions that had never
taken place to fabricating records for restoration work and other phony
documents, the con artists
managed to fool art galleries, museums and auction houses.
Authentication
and provenance are key to establishing the value of an art work, but with no
singular registry or database for artworks, the chain of custody can sometime
be difficult to establish. Would the latest blockchain digital platforms have existed,
such fabricated chains of custody might have been impossible to fabricate.
A
blockchain is a decentralized, public digital ledger that is used to record
transactions across many computers using a peer-to-peer network. Once
authenticated by all sides, the record cannot not be altered ensuring the
document is tamper-proof. The backbone of
cryptocurrency transactions, blockchain technology could now be applied
to the art market.
“The
transparency and trust that blockchain provides to online transactions is a
tremendous leap forward in technology, ensuring security to those wishing to
make large online purchases,” explains Frederic de
Senarclens, founder of
ArtMarketGuru which recently released a report titled How to Make and Protect Investments in Art
through Blockchain Technology.
De
Senarclens argues that blockchain “may allow for the formation of more
transparent art exchange platforms, reducing the need for intermediaries and
high transaction costs.”
Lorenzo Ronchini, director of the Ronchini Gallery, also
believes blockchain could improve transparency in the art market and describes
it as “an innovation which could rewrite the functioning of the art market.” When
interviewed for this article, the gallery was planning to test collectors’
appetites for using cryptocurrencies during the Armory show (March 8‑11) by
only accepting Bitcoin in payment for an edition work by photographer Berndnaut
Smilde.
Ronchini
says blockchain technology offers the opportunity to address issues of
copyright and ownership in the industry. Currently, all transactions occurring
between a collector and a gallerist, or dealer, remain highly private — the
details being only available to those directly involved. With the expansion of
blockchain technology, this data can be collected and stored for others to
access (respecting of course the privacy), prohibiting individuals from trying
to manipulate or dictate prices. If this becomes the case universally, then a
previously clandestine world will become far more clear to all those involved,”
Ronchini explains.
“With
the growth of blockchain technology it is possible that we may envision a
future where the market for art forgeries is almost completely eradicated. If
the details as to provenance and re-sale are stored and shared, then no longer
can unwitting individuals be deceived by art market fakes,” Ronchini adds.
Another
area where blockchain technology could have a large impact — again primarily
related to creating greater transparency — is through what is often called
"droit de suite” rules; that is, the right granted to artists or their
heirs to receive a fee on the resale of works of art. Ronchini points out, “If
the information on the provenance and future resales of a work are known to
all, we can ensure that this right remains respected.”
According
to Art Market 2017, Art Basel’s annual
report, the global art market stood at $56.6 billion in 2016 but only nine per
cent of that trade was transacted online.
Blockchain
technology could have the potential to unlock the online market, and a few
players have already started to test that market.
Back in
2014, the artist-run online gallery Cointemporary was the first to use bitcoin
as a unit of account while also issuing certificates of authenticity over
the blockchain facilitated by Ascribe. Since it launched, it has sold “upwards
of 50 artworks,” says co-founder Andy Boot. This includes the sale of a
limited-edition screensaver by Dutch artist Harm van den Dorpel to the Austrian
Museum of Applied Arts/Contemporary Art (MAK), which became the first museum in
the world to purchase an artwork using Bitcoin in 2015. Over the last year, a
few art galleries, such as Dadiani Fine Art in London and Art Porter in
Singapore, have also started accepting cryptocurrencies, either at special
events such as during Art Stage 2018 or routinely.
“I’d always been curious — so when this collector whom I
could tell really appreciates Naufal Abshar’s work asked me if I would accept
payment in a cryptocurrency, I thought to myself, ‘hey contemporary art is also
about contemporary ways of doing things’," explains Art Porter’s gallery
director, Guillaume Levy-Lambert.
Boot
acknowledges there has been a lag in the broader adoption of cryptocurrencies,
“I think due to a surface-level focus on price volatility. Historically those
involved in the arts have had an avant-garde outlook – perhaps that’s why the
arts community has been more open to explore cryptocurrencies and blockchain
technology. When we started Cointemporary there was a lot of discussion with
artists and galleries. Not all were open to working with ‘internet money’,” he
said, adding he’s noticed a shift in attitudes towards Bitcoin.
“Blockchain
technology offers a lot of opportunities to the art market, beyond an
infrastructure for payments. Whether or not the art market wants to adopt all
aspects is another thing,” says Boots.
Some of
the blockchain initiatives in the fine art space have been non-financial. For
example, Ascribe focuses on providing a secure way to trace digital artworks
and control how they’re shared while Verisart offers free permanent
certificates of authenticity to contemporary artists, including Shepard Fairey,
enabling them to list their work using the Bitcoin blockchain. The Codex
Protocol is an open-sourced, blockchain-based decentralised title registry for
art and collectibles (fine wines, classic cars, jewellery, etc.) backed by
Lofty, Auction Mobility and Live Auctioneers. Codex will issue a non-tangible
ERC721 token which represents the item, to which important metadata can be
linked. The data itself will be stored off-chain, but there will be a link so
that any provenance information that is attached can be uploaded and linked to
the token that represents the item. Codex envisions the majority of tokens
being issued by auction house partners. Each time a sale is made and provenance
research is conducted, that documentation can be paired with a token on a
public, decentralised blockchain. This way the provenance travels with the
artwork, serving as a store of value for future owners of the work.
Later this year, Singapore-based Maecenas will be
launching an open blockchain platform that sets out to democratise access to
fine art by letting collectors buy shares in works of art, typically above $1
million, with cryptocurrencies. By selling shares in their artworks, art owners
can raise money far more cheaply than they could though a bank while retaining possession
of their art, meanwhile investors use cryptocurrencies to buy shares of an
asset that has the potential to increase.
And come
August 18, bitcoin’s 10th anniversary, Paddle8 will host “Bidcoin,”
an online auction dedicated to money-themed fine art and collectibles.
Successful bidders will be able to use bitcoin and other major cryptocurrencies
to pay for purchases.
As first published in Prestige Singapore April 2018 Edition
As first published in Prestige Singapore April 2018 Edition