Verisart caught a lot of attention two weeks ago when it first appeared on TechCrunch wanting to update art authentication by using the blockchain technology pioneered by Bitcoin:
“We believe technology can aid trust and liquidity especially as more of the $67 billion annual art market shifts to private sales (peer-to-peer) and online transactions,” founder Robert Norton tells me. “We believe the cryptographic token used in the block chain addresses the privacy and security concerns in the art world by ensuring the anonymity of buyer and seller and other sensitive information.”
He goes on: “The art word is not broken. It just relies too much on middlemen to ensure trust and liquidity. We believe the advent of a decentralized world-wide ledger coupled with powerful encryption to mask the identities of buyer and seller will be attractive to the art world. As more art sales move online, there will be increasing demand for certificates of authenticity as well as the need to perform real-time verification of provenance. The blockchain allows potential buyers to verify the chain of title in a work without relying on any single node of verification.”
Today, James Tarmy looks at the hurdles standing in the company’s way:
The first and potentially most damaging roadblock is simple adherence. What makes Verisart a useful (and profitable) tool is the voluntary participation of an artwork’s present owners. Many collectors might choose not to voluntarily add their contact information—and the price they paid for a painting—to a publicly available database for the same reason that you wouldn’t add your name to a list of people who own diamond earrings, bedroom safes, or second homes on Nantucket. It’s a question of discretion and security.
Norton counters that his program will protect participants’ privacy. “There are sensitivity options that owners of these works will be able to choose,” he says. “The core function of what we’re doing is a decentralized service, but in order to make something useful to the art world, we don’t think it can be entirely so.”
A further potential problem: Verisart presupposes that a broad audience is champing at the bit to buy art online, thereby bypassing traditional such art market business models as galleries and auction houses. That’s not necessarily true. […]
It’s not just collectors. Artists, who depend upon galleries and dealers to promote their work, fund their production, and develop a collector base, are arguably even more reliant on traditional business models than collectors are. Without established artists’ support of—and participation in—the Verisart platform, the site has the danger of becoming a repository for aspirational artists who have yet to (or will never) receive art market attention.
A Tech Startup Is Trying to Catalogue Every Piece of Art on the Market (Bloomberg Business)