After six years working in finance in investment banking and later as a fund manager, I spent the last year doing an M.A. in Art Business at Sotheby’s Institute of Art where I researched and wrote about the uses of blockchain technology within the art ecosystem. I worked with many amazing people, many of whom believed that blockchain could make the art world a better place and were keen to contribute to a piece of research which could help effect change.
Rather than leaving my work gathering dust on a shelf I have decided to share it openly in a series of posts to be published over the next few months. My aim is to encourage interest, discussion and involvement in using the blockchain in the art ecosystem. I would encourage any readers to comment, ask questions and challenge my thoughts.
Please do share my writing or feel free to use parts of it for your own work — please cite me. Only by fostering dialogue among all stakeholders in the art community can we begin the process of co-operation that will be needed to get the maximum benefit out of a new technology with such enormous potential.
Follow me on twitter: @JessyBlock to stay up-to-date with the latest developments on blockchain in the art ecosystem and please get in touch!!
Blockchain within the art ecosystem
The TEFAF Art Market Report, Online Focus 2017 highlighted the importance of decentralised technology within the art market. Pownall’s report includes survey responses from 673 dealers regarding their views on the use of blockchain. She finds that three quarters of auction houses, one third of intermediaries and one fifth of galleries intend to ‘offer blockchain technology within the next five years’. She also finds that almost 20% of galleries, auction houses and intermediaries intend to accept payment in digital currencies in the future. Despite these ambitions, there is an absence of shared research and knowledge and a severe lack of co-ordination about blockchain solutions that would be suitable for the art ecosystem.
My research set out to discover how blockchain technology was being used in the art ecosystem and the challenges and benefits of adopting the technology. I identified over 40 business currently using blockchain technology and lots more thinking about it. The uses and many of the businesses are included below. If any are missing, please get in contact.
There are also some uses such as issuing import and export licences, recording professional accreditation, accounting and fulfilling KYC/AML requirements for which the blockchain may be a suitable tool. There are several companies using the blockchain to solve these issues which I am sure will eventually be useful to the art ecosystem. There are however currently no art-specific providers of which I am aware.
In the coming weeks I’ll discuss each of these uses and some of the businesses who are involved, as well as some of the opportunities and challenges associated with using the blockchain. In my next post I will look at artists who are using the blockchain as a medium and as their subject matter. In the meantime if anyone wants to learn more about what blockchain technology is, continue reading.
Introduction to blockchain
The diagram below is taken from Rachel Pownall’s TEFAF Art Market Report, Online Focus, 2017. It is helpful in providing a simple visual explanation as to how the Bitcoin blockchain protocol works.
The internet is full of excellent resources which provide an introduction to the blockchain which it would be futile for me to try to recreate or improve upon. Instead, for those of you not yet familiar with the topic or who want to increase your understanding these are some of my favourite resources which may help you understand what blockchain is and why it is so important.
A great starting point is Tess Rinearson’s blog post which uses emojis to visually explain Bitcoin and blockchain technology. This is an easy and comprehensive read which will give you all the information you need to be able to follow the rest of my writing. This is where I send everyone who asks me about blockchain!
For those of you who want some more:
- Twesige Richard also does a great job of distilling the facts for the newcomer.
- Even the original paper by Satoshi Nakamoto isn’t unmanageable.
- I love listening to podcasts and there are some regular ones I follow to keep up-to-date and learn more. Laura Shin’s UnChained and Adam B. Levine’s Lets talk Bitcoin are accessible and informative but also entertaining!
- Blockchain Revolution by Alex Tapscott and Don Tapscott is a great general text on the topic and Bitcoin and Cryptocurrency Technologies by Narayanan et. Al. provides a comprehensive study for the technically minded.
- And finally, if you want to dig deeper, there are some great papers herewhich cover some of the technical considerations.
My thanks go to Cryptograffiti for permission to use his art work. Follow me on twitter @JessyBlock for my thoughts on blockchain, ICOs and art. Next post: Artists using the blockchain as a medium and subject matter.