Are auction houses dead?

Going once, going twice, sold! 

When we think about buying and selling art pieces, we imagine ourselves in large auction halls, where bidders scream their prices out loud, bid catchers follow, repeating the prices at incredible speed, before the final "going once, going twice, and sold" ends the auction. Then, a process begins, that will inevitably be accompanied by uncertainty, yet mitigated through trusted auction houses. The seller will have nightmares about a fraudulent transaction, the buyer will ask, whether the painting is real. Although, the auction houses work with licensed art experts, verifying art pieces is still rather an art, than a science. Especially since Wolfgang Beltracchi shook the art world with his faked pieces, the concern is a necessary by-product of every deal.

The new era

What if there was a way, to secure transactions? To initiate payment through automated contracts? To verify art pieces for the eternity of time? And to collect them all in one decentralized place? Well, there is. As the name of this blog suggests, the technology behind these possible advancements is Blockchain.

The new era of auction houses might be just in the making. Companies like Portion or Maecenas attempt to build a blockchain based eBay for art pieces. Their aim is to build a marketplace, where buyers and sellers of art can meet, interact and transact. Bounded by the rules of blockchain, they offer a decentralized exchange, using a blockchain certificate, proven identities, while the ultimate identity is hidden to the other party, securing payments and providing proof of funds. This seems to meet the rising security concerns of demanding art customers.

Or maybe not?

At first sight, the technology seems to revolutionize the art industry. Yet, in our opinion, the new "trust" enabled through the technology is merely a shift, rather than a revolution. The trust associated with large auction houses, such as Sotheby's and Christie's, is created through the history and consistent performance of excellence and professionalism. In art transactions, multi-million dollars can change hands in a matter of seconds, intermediated by these institutions. While we are absolutely convinced, that blockchain can help the art industry in terms of security and transparency, would you rather trust an organization, that you have physical contact to and has a proven track record, or an hyper-complex blockchain, whose underlying technology is puzzling and does not offer customer service, when you have a question?