Are We Ready For Blockchain In The Art World

Are We Ready for Blockchain in Art?

Are we really ready for Blockchain in the art world?

Each week I write a brand new article to support members of our three wonderful groups on Facebook, The Artists Exchange, The Artists Directory, and The Artist Hangout. This week we take a look at the emergence of crypto-currencies and Blockchain which are starting to creep into the everyday norm of the art world.

A Brief History of Money…

Blockchain and cryptocurrency is something we have all heard about and many of you are probably still wondering exactly what these technologies are and worried that it all seems a little too complicated. That’s little wonder when we listen to some pundits on the subject who often suggest that we will have no choice other than to begin understanding it sooner rather than later as both Blockchain technologies and cryptocurrency takes on more of a role in the world of art.

I know I will take a lot more convincing before I believe that the majority of working artists of today will be converts to cryptocurrency anytime soon but I am minded to believe that many digital artists might make the jump to Blockchain technologies in the medium term. You can pay me for my art however you want with the exception of paying me in any currency like bitcoin. But then not too long ago I didn’t think I would ever manage to go out of the house without taking any hard physical cash with me either.  

I can’t even think back to the last time I used physical cash to pay for anything. I am so used to just tapping my card on a chip and pin device or holding my phone up against a small box that when I go a few pennies over the contactless payment limit I struggle to remember my pin code. Some days I struggle to remember why I walked into the bathroom.

I can’t say that I really miss physical cash at all. It’s inconvenient when you have to find a bank or an ATM whenever you do have to pay for something using hard currency, and that is if you can find an ATM at all. When many of the free to use ATMs are being stripped out of many high streets along with the banks, finding somewhere to get your hands on traditional currency is becoming more and more of a challenge and in some towns and cities it is becoming impossible.

Now if you asked me if I would ever trust financial systems enough to pay for literally everything using only a plastic card just a few years ago, I wouldn’t have been convinced that I would ever be ready any time soon to go cashless. Yet last week I walked into a coffee shop that no longer takes cash at all. They literally had no mechanisms in place to handle it, and because the owner felt that it was safer for his staff who had to take the money to the bank, and the bank had closed down anyway.

Not too long ago a software update to the banking system meant that my along with many others entire financial status went offline for a few hours. Thankfully I didn’t need to buy or pay for anything but there were many people who got caught out and restaurant bills went unpaid, groceries were put back on shelves in supermarkets while the fix was applied by the bank.

Glitches like this make the banking world vulnerable. It only takes one rogue nation with the desire and a skill-set that you can learn online to bring a country to its knees. There are lots of protections in place of course and issues like this are still thankfully relatively rare, but as the world heads towards using online services for everything there is always that chance that a bad player can break something or that the system gets a glitch. So it’s little wonder that there are still many people who need to be convinced that this pay for everything by plastic thing is the right way to go.

Social Media

That Facebook Thing…

On the 13^th March 2019, Facebook, What’s App, Instagram, and other sites went down for hours and it felt to some like years. It was something unprecedented since the last time Facebook went down for longer than a few hours. Facebook took to twitter to explain that things had gone a little bit belly up but they were working on a fix and no, it wasn’t a cyber-attack. No need to panic everyone, but of course a lot of people did.

Facebook was down for the longest period for a long time, some 14-hours and there was a definitive panic spreading across twitter which we all know really is the tech support platform where we go to find out if things have really gone down or to find out what time Donald woke up. The outage was the longest on record and it was global which gives you an idea of the scale. It looked like a hack, a well-constructed carefully planned cyber-attack and you could almost hear blame being cast on a couple of nations. Alas, the reason was more mundane.

The key flaw that caused this outage to be so severe was an unfortunate handling of an error condition. An automated system for verifying configuration values which ended up causing much more damage than it fixed.  I’m sure that there will be coverage of the outage in the media who will be saying that we are all doomed and that this was a hack, but no. It was a glitch. S.H. One. T, happens and in the world of tech, way more frequently than you would think.

The intent of the automated system is to check for configuration values that are invalid in the cache and replace them with updated values from the persistent store. This works well for a transient problem with the cache, but it doesn’t work when the persistent store is invalid. Long story short and to put the geekiness to one side, this meant that every time a user tried to enter a query into Facebook, Facebook re-entered a feedback loop that wouldn’t allow the databases to recover. And yes I noticed that certain ads didn’t disappear as well.

I expect if everyone had just stopped using the service instead of refreshing the page or trying to post or log in and out, this could have been handled more efficiently and the outage would have been much shorter. Turning off the system which attempted to correct configuration values is the approach they have taken for now according to their tech pages, but at some point that system will need to be reintroduced and replaced with a system that handles this stuff more gracefully. This kind of error could happen again and at some point it probably will and it’s not only Facebook that needs to have this kind of system in place.

So not a hack, or an attack, the data was essentially sort of trying to delete itself after a misconfiguration. Something I have seen happen in my other life outside of art and that’s the thing, this kind of stuff does happen and usually if it can happen it will at some point.

Which kind of tells you that whatever the service is, it doesn’t have to be maliciously attacked to bring it down. The internet is both resilient and tragically fragile and it is also now 30-years old with some of it being still held together with similar technologies that were put in place all those years ago, but also fragile because of the way it is used or more specifically because of the way it is frequently misused.

As an aside and because ooh, shiny, do you want to see what every website looked like back in the day? Check out the Internet Archive’s Wayback Machine right here.  You can even look at older versions of this site. Back to it then.

With so many of us artists needing to be online and having very little if anything in the way of an offline strategy for running our businesses, we are just as vulnerable to these kinds of issues as the biggest internet players. Why? Because we are all intrinsically linked to them and we have an unhealthy reliance often on services which are provided for free, which is something we forget when we use services like Facebook. We don't pay, we just complain when it all goes wrong. So back to bitcoin and you will start to get the feeling why I become slightly nervous when it comes to mixing this kind of technology with art.

Cryptocurrencies which you probably know as something like Bitcoin aren’t new. Back in 2009, the first decentralized cryptocurrency, bitcoin, was created by a by pseudonymous developer by the name of Satoshi Nakamoto. In 2018 there were more than 1600 of these cryptocurrencies available and new ones can be created at any time, pretty much by anyone with the technical know-how. Even I created one where you can pay me in coffee and Pringles but it never really took off.

Happy Birthday Dear Internet...

Cryptocurrencies and Blockchain are the two things we will look at today and I will try my best to provide a simple explanation of what they are. To keep things really simple, they are both a bit different. Blockchain is the platform that drives currencies such as bitcoin and the other cryptocurrencies. Bitcoins and the like are the currencies themselves but both cryptocurrencies and Blockchain have a symbiotic relationship with each other.

Why does this have anything to do with art? Tech savvy collectors are now using cryptocurrencies to buy new works. For the art world which is already so often accused of being more opaque than transparent it was probably inevitable because unlike cash and credit cards and other forms of payment, cryptocurrency is private. Blockchain technologies on the other hand can also be used not to mask but to categorically prove who the transaction was made with.

A lot of people think of cryptocurrencies as being something dark and sinister and a way of masking the origin of money. In essence, they are the currencies of choice for those whose work involves kidnapping or anything of a criminal nature, or at least they are if the criminal is tech savvy enough to know how to use them. Also worth mentioning at this point that criminality and kidnapping are frowned upon to the point of being illegal in most countries, so neither are great career choices if you were thinking of making a career change.

Cryptocurrencies aren’t directly affected by laws, rules or regulations of any government or bank, but equally that means that there are also no credit card fees and surcharges. There’s always an upside to these things I guess.

The public’s trust of cryptocurrency is growing in some areas and whereas a traditional account can be frozen, it’s slightly more difficult to freeze a cryptocurrency account. But, it is still entirely possible and back in January this year users were unable to access cryptocurrency through Quadriga, a platform which allows trading through bitcoin and other currencies when the platform was frozen after the CEO had passed away. Sad and bad news on both counts because he was the only person with the password.

Where does it all fit in with art?

Obviously these systems have some advantages and in the art world they become a more attractive proposition in an industry which back in 2017 was worth more than $63-billion. The technology and cryptography around Blockchain will speed up the movement of money, and it will also make it easier to prove ownership of an asset which in this case would be a work of art.

Anyone who has had to work on finding out provenance of an artwork and tracing back ownership will see this as a step forward that will reduce both the time and effort to accomplish tasks such as due diligence. Today proving provenance relies on handling massive amounts of paperwork and in some cases trusting someone who tells you that the uncle of a friend of a friend once owned the work. Due diligence work when you are looking at art and antiquities is specialised, laborious, and filled with caveat after caveat.

This is why art fraud and mis-attribution is so ripe within the industry, because it relies on trust and paper. People can lie and paper can be forged. In theory, the Blockchain technology could even open the art world up to more buyers if the task of due diligence made it easier to prove provenance and ownership.

Blockchain technology certainly has the potential to counter some of the issues that arise as a result of these kinds of nefarious practices. The technology is one that has the potential to guarantee the chain of ownership from creation to sale and every sale thereafter. With some of biggest names of the art world increasingly showing an interest, it is no longer a theoretical it might happen in the art world someday, because what was only theoretical eighteen months ago is already is happening.

Last year, Christie’s piloted a Blockchain encryption based registration service for the Barney A. Ebsworth collection in New York. Working with the art registry service Artory, they created a digital certificate for the collection including works from Edward Hopper and Georgia O’Keefe.

Whilst bitcoin is credited with blurring the lines of identity, Blockchain can actually make the transaction more transparent. In the case of these digital certificates everything from the price to the description of the artwork and provenance was available. In short, Blockchain can offer the kind of provenance security that has been forever missing forever in the art world. The criminal’s once best friend is turning and is being used for good.

There will still however need to be some kind of manual provenance that I would suggest needs to absolutely be categorically correct and which needs to take place prior to the work becoming linked to the Blockchain certificates. This will slow the initial process down to somewhere similar to the time it takes today, but in the future that same provenance won’t ever need to be carried out in the same level of detail again so long as the Blockchain technology remains uncompromised.

This also opens up another avenue for part owning artworks. In this instance the physical artwork becomes a currency which because of arts transient monetary nature, it likely has a close fit with. At this point and particularly where multiple people could buy into an artwork, because the investment could fluctuate in value in line with the market, art becomes more akin to a financial instrument. We might just start to see financial brokers and not just art brokers and the point where if one party wishes to liquidate a fraction of the artwork they currently hold they would be able to do it. It is at this point that art becomes more of an investment opportunity than some of it is today.

But how does it work?

It’s not that complicated. An artist creates a new work of art, a collector sells one of his paintings, or a gallery makes a sale, it doesn’t matter at all because the seller will certify everything that needs to be certified with digital credentials in the form of a token or Blockchain. 

That token or Blockchain is essentially a digital certificate of authenticity and one that is worth much more than the paper based certificates of authenticity that themselves are often worth little more than the paper they are written on. Like this certificate I downloaded from the internet.

Courtesy of Arty Boll#&ks 

Once the transaction has taken place the artwork along with the validated certificate is handed to the buyer, and this continues to happen each time the artwork is passed on. Because the transactions are stored on something called a distributed ledger which anyone can edit and access, buyers and sellers can see the exact journey of the artwork. If the certificate doesn’t start off with a link to the artists, galleries, or seller’s crypto-wallet the question of provenance determines that the work is fake or that there is something amiss.

So why is this useful?

The most obvious use of this technology is that it can at last add some transparency to art transactions and it can be used to quickly check the provenance and carry out much of the due diligence needed when buying a work of art.

But there are also practical uses for transitioning art through the system too. Digital art is notoriously difficult to prove to be an original. I know because I have battled with the concept for many years and in some case have even sent the original disc drives where the art has been stored to the buyer. The problem here is that discs can be copied and there is no easy way to guarantee that they haven’t.

Whenever I have sold original digital art in the past it has always been a case of sending over the file and every file used throughout the creation on an encrypted USB device and physically signing the artist proof and any prints. But that system relies on trusting that the artist never sells that file somewhere else. You can trust that I won’t but then everyone could say that too.

With Blockchain it becomes impossible to pass off a second copy of the work as the original. Everything points back to the big bang, the moment of creation, and it is time stamped and where other parties in the chain continue to endorse the credentials of the work through constant re-verification.

It is entirely feasible that this would one day allow digital art to even be rented and ensure that the artist receives a due commission. Organisations such as Codex who you can find right here are already working to solve a multi-billion dollar problem of art and antiquities sales where due diligence is usually another level of friction and often pain. Been there, done that, never want to wear that particular T-Shirt again.

You can also see where this model could be used to prove the provenance of anything that carries a value. Car and yacht sales which would reduce criminality and ringing stolen cars and boats, digital credentials which we also spoke of recently and where training has to be certificated and validated, maybe Blockchain the credentials of a Doctor who will perform surgery, the practical uses for Blockchain are clear. For digital artist it is the only guaranteed way that currently exists to guarantee an original digital work of art is the original.

Is it any riskier in terms of glitches? Well it isn’t as risky as many of the current technologies that we rely on to provide certification, and where transactions need to be proven it is much better and more difficult to fool. Some would say impossible but I have been around the cyber-block for a long time and eventually things become easier to tamper with but this is about the best we have and will have for a while.  

Simple explanation of Blockchain technology

So back to the question…

The question isn’t are we ready for Blockchain technologies to creep into the art world because they are already here. The question is really, are we preparing for the time when Blockchain becomes as familiar as using a credit or debit card to purchase a piece of art?

It seems a long way off in the distant future but this technology has been growing since the beginning of this decade to the point that we are now seeing it happen and yet as working artists some of us will still only just be starting to get to grips with handling online payments. It seems a million miles away but so did television and mobile phones at one time.

What we are likely to see in the future and not even the long-term future is a time where the fractional ownership of art becomes more attainable and just as attainable as the ownership models some aircraft manufacturers have been encouraging for years with their own fractional ownership programs. Twenty people buy the use of an aircraft and the person who has the most invested gets the aircraft for the most time and each share a proportionate cost of keeping it in the air.

Art was tokenised for the first time in 2018 and no matter which tech-summit you attended last year, there was always at least one breakout session at every summit where the subject of Blockchain was being discussed. With art prices soaring through the roof in the auction rooms on a Tuesday evening, it makes sense that this is exactly the kind of technology that will start to become more and more disruptive and more and more common and along with it we will see new kinds of investors. The art market will change as a result or at least how art is purchased and owned will eventually change. We might not like it now but we might be forced down that route one day.

At the same time there is a sadness that art is being seen by some as nothing more than a monetary instrument, but the reality is that it has always been seen that way. I doubt that most working artists who are running even some of the most successful online and print on demand stores will need to worry too much immediately, but it certainly makes you think about where we will be in another decade. Of course, that’s so long as it doesn’t all come crashing down due to a technical glitch because you know, technology.

About Mark…

I am an artist and blogger and live in Staffordshire, England. You can purchase my art through my Fine Art America store or my Pixels site here: https://10-mark-taylor.pixels.com  

Any art sold through Fine Art America and Pixels contributes towards to the ongoing costs of running and developing this website. You can also view my portfolio website at https://beechhousemedia.com which you should totally check out because soon it will include free art downloadable's that you will be able to print at home!

You can also follow me on Facebook at: https://facebook.com/beechhousemedia where you will also find regular free reference photos of interesting subjects and places I visit. You can also follow me on Twitter @beechhouseart and on Pinterest at https://pinterest.com/beechhousemedia

If you would like to support the upkeep of this site or maybe just buy me a coffee, you can do so right here! If enough people spend a dollar I will finally be able to get rid of the ads!