How Codex makes Art & Collectibles Easier

Codex vs. The Status Quo for buying Art & Collectibles

Codex
CodexProtocol
5 min readJul 5, 2018

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It’s really difficult to purchase unique assets like art, wine, watches, jewelry, sports memorabilia or more. If you’ve purchased these kinds of items in the past, you likely already know this. How do you find what you want? How do you know you’re paying the right price? How do you know it’s authentic? These are difficult problems.

And it’s not just hard for buyers. It’s also hard for businesses. For example, auction houses need to research items before consigning them, lenders need to research items before quoting loans, insurance companies need appraiser reports. These problems make doing business slow and expensive.

In this post, I’ll walk through an example of the status quo and compare it to how it works with Codex, so the benefit that Codex provides is clear.

First, let’s look at how it works today. Imagine you are a collector, and you receive an email from someone you’ve never met, “Bob,” offering to sell you a Picasso. Today, the first thing you would do is ask Bob where he got the piece and for any documentation he has about it. If he purchased it from a well-known auction house like Christie’s, does he have the receipts? Have any appraisers written reports about the piece? If Bob has documentation, how do you know it’s not fake? You would need to call the last seller, call the appraisers, call previous owners, and anyone else who authored documents to confirm that the documentation is valid. Even then, how do you know Bob isn’t selling ten copies of the piece to ten different people using ten photocopies of the documentation? You probably need to hire an appraiser to do all of this research, which is costly and slow. Meanwhile, someone else might buy the Picasso instead. This is the status quo, and in spite of everything, hundreds of billions of collectibles trade every year.

Codex stores the provenance of unique assets on the blockchain in “Records”. By storing this information in an immutable database, buyers and businesses can easily verify the data.

Here’s how it works with Codex: Bob emails you and offers his Picasso. You ask him to share access to the Codex Record. Instantly, you can see that Christie’s auction house created the Codex Record, the artist’s foundation digitally signed it, and the Record hasn’t been copied (because it’s on the blockchain). You can confidently make an offer instantly. Business is also easier. Brokers can sell items more easily, the costs of each sale are lower, loans can be extended more quickly, and more.

This is what makes Codex so much better than the status quo. And this comparison is critical — we believe people adopt new technology when it is 10x better than before. We don’t claim that everything in the Codex is perfect, because that is neither necessary nor possible.

Of course, new technologies will make Codex even better. For example, Codex has partnered with Dust Identity. Dust offers an aerosol spray of inexpensive, industrial-grade diamond dust that creates a crystalline fingerprint on the Picasso. It’s invisible to the naked eye, but an iPhone can scan it. Dust plans to store the unique ID onto Codex Records, so that you could check with 100% confidence that the physical piece is the same one represented by the Codex Record.

But even without technologies like Dust, We believe that Codex is a massive improvement over the market today. If paper documentation is good enough for an asset class of $2 Trillion, just think how much the asset class could grow with the information security offered by the immutable blockchain.

If intermediaries didn’t have to spend so much time validating items, commissions would shrink and annual transaction volume would grow. If lenders could more easily quote and make loans, buyers could purchase with leverage. If investors could more easily diligence pieces, they might be more willing to buy fractional shares and we could more easily securitize the asset class. If owners could easily update valuations and appraisals, they could mark-to-market and make better asset management decisions. Easily accessible and verifiable information unlocks tremendous value.

Join the Codex Telegram Community: https://t.me/codexprotocol
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About Codex

Codex is the leading decentralized asset registry for the $2 trillion arts & collectibles (“A&C”) ecosystem, which includes art, fine wine, collectible cars, antiques, decorative arts, coins, watches, jewelry, and more. Powered by the CodexCoin native token, the Codex Protocol is open source, allowing third-party players in the A&C ecosystem to build applications and utilize the title system. Codex has launched two initial decentralized apps (beta), Biddable, providing access to unique assets for crypto-holders, and Codex Viewer, to create and manage blockchain identities for your unique assets. The Codex Protocol and CodexCoin will be adopted as the only cryptocurrency by The Codex Consortium, a group of major stakeholders in the A&C space who facilitate over $6 Billion in sales to millions of bidders across tens of thousands of auctions from 5,000 auction houses in over 50 countries. https://www.codexprotocol.com.

To learn more about Codex, read our white paper and join our community via Telegram and Twitter.

Nothing herein constitutes an offer to sell, or a solicitation of an offer to buy, in any jurisdiction in which it is unlawful to make such an offer or solicitation. Neither the U.S. Securities and Exchange Commission nor any other federal, state, or foreign regulatory authority has approved an investment in the matters contemplated herein.

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Codex
CodexProtocol

Codex is the leading decentralized registry for the $2 trillion arts & collectibles ("A&C") ecosystem. Our Publication: https://medium.com/codexprotocol/latest