Posted: August 29, 2018 -
ArtChain is a Melbourne based start-up putting artwork and collectibles on the blockchain, giving investors’ confidence and putting an end to art forgery. Founded by Kay Sprague and Cameron Macqueen earlier this year, the start-up has already garnered interest from artists, art galleries and investors. Sprague is the former Managing Director of Citigroup and a former Vice President of JP Morgan’s asset management division, whilst Macqueen has worked in management and marketing roles at a number of companies in Australia and China for the past 15 years. The platform aims to “clean up” parts of the art industry, recording provenance of art, enabling trading through smart contracts, whilst it also acts as a virtual gallery supporting the administration of artwork, where owners are able to keep their work private or make it visible. They are currently based in Australia but have reported having their sights set on the global market.
Hi Kay and Cameron, we have been looking forward to speaking with you.
You are a new start up launching just earlier this year, where did you see a gap in the market?
Our initial thoughts stemmed from a concern over the authenticity of artwork and avoiding forgeries, which led us to thinking about the ecosystem of art. When we compare art to other investments or valuable assets, it is noticeable that there isn’t a registration process available to record the authenticity of works, especially when compared to cars, property, shares or other securities. Without registration and proof of authenticity there is a large challenge to gain confidence of investors to purchase art particularly from emerging artists. In order to grow art as an investment, this gap needs to be resolved.
We also noted with concern how difficult it is for artists to be recognised and supported. If we are able to attract and increase the number of art collectors by enhancing the investment prospects and trading opportunities, then financial rewards for artists will follow.
How does ArtChain work?
ArtChain provides a database, supported by blockchain technology, to record the provenance of each artwork and enables the display and trading of artwork if desired. Artists will upload a photo of their work to the blockchain along with the detailed provenance of each piece. This detail could include a photo of themselves with the artwork, where it has been displayed, when they painted it, ownership history, display history, the medium etc. The more detail the better, as users of the system will be rewarded with ACG coin according to how much they interact with the system. Within the system a variety of settings will be available for users to allocate their artwork as private, public view only or public display with options to offer the work for sale. There will also be an auction capability so works can be auctioned at the discretion of the artist along with notification processes to the database of potential purchasers.
Also, to support artists, the system will be able to be used as an administration tool to catalogue works and keep track of each piece and the numerous editions. The system has an underlying crypto currency (ACG coin) that can be used to buy and sell artwork on the system, and the coin will be easily converted to cash.
Can you talk us through the virtual gallery aspect of ArtChain?
Once artists have registered their works, they will be able to elect to display each piece should they require. The system will enable each piece to be viewed along with its provenance displayed to help confirm its authenticity to potential investors. Artists displaying works on the platform will have works displayed globally, which in many cases will be providing greater exposure than previously and the system will facilitate the sale of works internationally.
What does the ArtChain IoT sensor device enable?
The IoT sensor device is an electronic method of tracking the location of artwork including measuring the environment, such as temperature and humidity to ensure it is maintained in optimal conditions. We will also offer recognition software to ensure the piece that was purchased is the same piece that arrives to the buyers end location. To do this, we will use microscopic pictures and data in numerous locations and record this detail as code, then we will send it to the purchaser to enable them to verify the arrival of the piece.
Who is your target audience for the platform?
Our research suggests the platform will be attractive to a wide range of contributors, including artists for displaying works and managing their catalogues, collectors for managing works and maintaining their provenance and documentation, and galleries as a method of displaying their client’s works, and managing their catalogues, along with support for an online auction process.
We are in the process of running a global campaign to attract our first 10,000 artists who will be the first wave of people uploading their art to the system and have garnered significant interest through our marketing process. We have also identified many thousands of artists in Asia willing to upload their works as soon as the system is launched.
You have had much interest from artists and galleries in ArtChain Global, why do you think this is? What are you offering that other companies aren’t?
ArtChain Global has a broad appeal because it aims to service the art world comprehensively, supporting emerging artists as well as highly established artists, along with collectors, galleries and auction houses using blockchain to secure the platform. Specifically, the platform will offer artists exposure into new markets and will facilitate the management of the business side of art. Further advanced technology (including Artificial Intelligence) will be utilised to ensure the product is leading edge and easy to use, becoming the “go to” for all art enthusiasts.
Talk us through your crowd funding. It was reported that you raised $4 million in 48 hours using crypto-fuelled initial coin offering?
ArtChain Global is fortunate to be supported by investors who have a strong belief in the product and its potential and have committed sizable funding in a short timeframe. The team opted to avoid an Initial Coin Offering, there was no need to raise extra, unnecessary funds.
There are those in the industry who still hold concerns about blockchain and whether it can “clean up” the art market. What would be your response?
The capabilities of blockchain are clear, especially from a security and record keeping perspective as the process provides a verified record through its process of transaction authentication. The test will be in the adoption of the system by the art world. If the art world confirms the importance of documenting provenance and recognises the benefits such as the potential to enhance tradability of art and adopts blockchain for the future then it will be an outstanding success for artists, collectors and all involved. There may however, be some that prefer to keep the mystery of ownership or cannot validate their works and are therefore more comfortable without the evidence of authenticity.
Currently you are based in Australia, do you hope to expand?
Yes, our market is global and we expect to quickly expand as soon as the platform is ready for use which is towards the end of current year. We already have thousands of artists across China coming on board, so this part of the world will be a significant portion of the ArtChain Global business to begin with.
What does the future hold for ArtChain Global?
The sky is the limit. We believe ArtChain Global will help transform art into a widely held asset with artwork trading on a more frequent basis at increased prices due to higher demand and interest across the world. Effectively we are adding trust to the industry which will assist in enhancing the value of art and the liquidity of the market. This will support growth in the market, better support artists financially and encourage artists to continue their passion.
Cover image: Kay Sprague and Cameron Macqueen – ArtChain