Given this series has amassed quite a following, I thought I’ll write one more, before I take a small 2-week break from writing. Following on from my previous post on Online Ticketing Systems & the GET Protocol, which you can find here, I will be discussing how the Arts & Collectibles (A&C) industry will be disrupted by the emergence of the blockchain and cryptocurrencies.Unique Asset Registry — Codex Protocol Overview
A&C is comprised of objects such as art, fine wine, collectible cars, music instruments, jewellery and much more. Over the past few years A&C has become so big, that Deloitte is considering it as an asset class — “a group of securities that exhibits similar characteristics, behaves similarly in the marketplace and is subject to the same laws and regulations”.
It’s an asset class in which high-net-worth individuals (HNWI) currently allocate an average of 6% of their portfolios to. Additionally, according to Deloitte’s 2017 Art & Finance Report, this asset class is estimated to be worth $2 trillion projecting a growth of $0.7 trillion by 2026 with an estimated $620 billion of annual transactions.The Problem
Despite the size and growth of the market there is one massive issue; the lack of a title registry. This comes down to lacking two things:Provenance — This is the history of ownership and associated documentation of a particular object. It’s what drives the monetary value of an object as it indicates whether it’s authentic or not. Proving an object’s authenticity, is a long, often manual and hard process which requires analyzing a lot of paperwork and is often inconclusive. Without proper provenance, fraud, fakes and forgeries become very prevalent. It is estimated over $6 billion are lost annually due to this. There are numerous recently examples of fraud, including, John Re scamming art buyers out of $2.5 ...