How reliable is blockchain?
Furthering the cause of transparency and establishing trust are the ideals expounded by enthusiasts of blockchain technology. But the information stored in blockchain is only as good as it is true. So, what happens if people put false and inaccurate data into the blockchain? And if that happens, can the negative impact be limited?
“As the long history of forged paintings attests, any piece of information can be false; but since information on blockchain is never erased and only updated, they’re a poor place to store lies. Eventually, the truth will be found out,” says Kevin McCoy, co-founder and CEO of Monegraph, a creative blockchain studio and platform which is “by and for artists.”
Monegraph.com “is not about bringing new services to institutional art market players… It is an open platform that lets artists use and experiment with the capabilities of blockchain technology in their practice.”
The company hopes artists will change the way institutions and collectors operate.
“Blockchain is not going to solve the problem by itself, but it can make data immutable and thus more trustworthy,” says Lindsay Moroney a COO at Artory, a digital registry for the art world founded by Nanne Dekking, Artory’s CEO, the Chairman of TEFAF.
Some might argue that the art market has done quite well for decades, possibly due to the lack of transparency and lack of regulation. And yes, that has made it very much an insider’s market for a small elite group. Thus, is it possible that major art market players — leading galleries and auction houses — might resist the use of blockchain in art market transactions?
As McCoy points out, many markets, such as securities, currencies, property etc., originally started to primarily to benefit an opaque insider clique. With time, however, as the markets grew and new players entered, there was a powerful impetus to improve transparency in order to continue that growth.
“When there are more market participants, there is greater liquidity and more wealth is created. This is a good thing and I see no reason why that won’t happen with the art market,” says McCoy.