It caught your eye in an instant. Maybe it was the flash of color from a painting, the glint of a vintage watch, or a famous vineyard name on a wine bottle label. Either way you have to have it, but how do you know if the price is right?
One of the biggest drivers of an item’s value is its provenance. Provenance is the history of ownership and identity of an object. It can include auction houses, dealers, or galleries that have sold an item, the private or institutional collections in which the item has been held, and exhibitions where the item has been displayed. It can also include academic research and catalogue raisonné inclusion.
Why does provenance matter?
Provenance matters because it can directly affect the three main kinds of disputes that occur when buying and selling valuable collectibles:
- Disputes about ownership
If an item has been stolen from its rightful owner, as in the case of pieces looted in Europe by the Nazis, then it becomes difficult to sell. This is because it’s possible that at some later point it could be confiscated and returned to its rightful owner.
- Disputes about authenticity
Items that have a documented chain of ownership from the moment of creation to the current owner are more likely to be authentic. However, expertly falsified provenance has also been used to sell forgeries for millions of dollars.
- Disputes about value
If an item has passed though the hands of a celebrity, historical figure, prestigious collector, or famous gallery, then its value will increase. Additionally, just as flawed forgeries can sell for millions due to well-faked supporting documents, the value of authentic pieces can be undermined by careless documentation.
A great example of the impact of provenance can be found in a set of cookie jars owner by Andy Warhol. They sold for nearly a quarter of a million dollars. If they hadn’t sat in Warhol’s kitchen, it’s unlikely they would have sold for even $40.
What does good provenance look like and what information matters?
The word provenance has its origins in the French word provenir, meaning “to come from”. An ideal provenance captures the ownership history of a piece all the way back to its initial creation. When looking at a piece of provenance documentation make sure that:
- It specifically describes the piece
Documents that do not specifically describe the object in question (eg. dimensions, medium, year) do not constitute valid provenance.
- It’s an original document
Photocopies of letters, certificates, and other documents are not valid forms of provenance (unless the originals are at a known location, and can be accessed and inspected firsthand).
- All owners and signatures are verifiable
Contact information for all signers must be included somewhere in the provenance — and be verifiable.
- It’s based on fact, not opinion, unless from a respected source
Statements that a piece looks similar to other, authentic pieces can’t be considered provenance unless they come from a person or organization with specific expertise.
What kinds of provenance documentation are there?
- Receipt, Invoice, or Bill of Sale
Vital for any item, a proof of purchase shows that the seller is the legal owner of the item being sold. This matters because it is necessary in order for the seller to legally pass their title on to the next buyer. It can also confirm when an item changed owners, and the identity of the parties involved, such as a private owner, gallery, or auction house.
- Catalogue Raisonnés
For artworks, this is a key piece of documentation. Translating into English as ‘the list’, this is a comprehensive listing of all the known artworks by an artist, described so that they can be reliably identified by a third party. Compiled by experts, they contain comprehensive information, including provenance, for each artwork or item officially recognized as having been created by the artist or maker at the time of publication.
An object may have been previously appraised for insurance reasons, as part of an estate, or if the owner wanted to discover the item’s value at that time. An appraisal is a good piece of provenance to document the age and ownership of an object, but any value given on the appraisal should not be considered as the current value.
Most fine watch, jewelry, and fashion brands have a detailed archive of their inventory. Most brands can trace the existence of one of their products from the maker’s marks, model reference or just visual inspection. Using this documentation, a potential buyer can confirm when and where an item was produced and confirm its authenticity.
- Proof of sale at auction
If an item has been previously included in an auction, the sale result is usually available online, or from the auction house if you contact them directly. Most major auction houses publish catalogs, which contain photography of every item in a particular sale
- Inventory number from a museum or corporate collection
Items that are held by museums or corporate collections are given inventory numbers. These numbers accompany the item when it leaves the collection. They can verify that the object was part of this collection during a specific time period.
Now you can feel confident next time you stumble across a great piece you will be able to decide more easily if you believe its provenance. When you buy an item, creating a Codex Record for you item will help you to track it’s provenance moving forward, simplify the sharing of documentation, and even increase the resale value of the piece.
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.
For more information on Codex Protocol, visit https://www.codexprotocol.com