How Blockchain is Changing the Auction Industry

Blockchain has been disrupting the tech and financial market since the past 5 years. Blockchain was originally created to support the Bitcoin but soon the tech community has started using this technology for other purposes.
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Blockchain is the brainchild of a person or a group of people known by the name of Satoshi Nakamoto. In 2017, the global Blockchain technology market is predicted to reach 339.5 million U.S. dollars in size and is forecast to grow to 2.3 billion U.S. dollars by 2021.
Reference Source: https://www.statista.com/statistics/647231/worldwide-Blockchain-technology-market-size/   

An article in Forbes states, “One of the most notable changes was the increase in vibrant conversation around Blockchain, which is being introduced to broaden the market’s transparency, track ownership and provenance, and provide an infrastructure for the tokenization of fractional artwork sales.” But the question is, why is the Blockchain technology being leveraged above all the other technological upsurge?
Reference Source: https://www.forbes.com/sites/zoharelhanani/2018/12/17/how-Blockchain-changed-the-art-world-in-2018/#480288a23074
 
Blockchain’s Key Feature: Secured Database

Blockchain has its database in more than one location, with hundreds, thousands, even potentially millions of duplicated records around the world, all updated every 15 minutes and unchangeable, immutable. 
Furthermore, this technology is considered to be a secure system because cryptology is used to ensure that nobody can intermingle with the timestamps or blocks. If somebody does so, there is digital evidence in the system. This makes it ideal for handling data structure and to keep track of records of anything that is valuable, such as financial transactions.
Hence, Blockchain technology is being widely adopted by sectors who need a secured database for financial transactions. Let’s take a look at how Blockchain is being used in the Auction Industry.

Blockchain: Auction Industry: Real Estate

As we know, that real estate forms a big part of the Auction Industry. It touches the lives of just about everyone, but we also know that real estate transactions can be complicated for the parties involved; buyer, seller and sometimes the agent.
An article in Biz Journals states:

“Blockchain is now being used to list and sell properties as I wrote about here at Business Journals for a recent “Packer’s House” in Greenbay, Wisconsin. Now it is being used for a first-ever real estate auction in Rome Italy for the renowned Palazzetto Hotel.
This is listed and being serviced by Propy, a real estate firm in the San Francisco Bay Area. In a recent interview I spoke with the CEO, Natalia Karayaneva, and CTO, Alex Voloshyn, about the ramifications of this for buyers, sellers, and for real estate professionals.”
Reference Source: https://www.bizjournals.com/bizjournals/how-to/technology/2018/07/how-Blockchain-can-change-real-estate-transactions.html

Real estate in the Auction Industry is one of the perfect examples that could benefit from adopting Blockchain. For the buyer, seller and the agent, it can:

• Save money (taxes, service fees, etc.)
• Increase security in transactions
• Make the processing time faster than ever

A significant benefit of Blockchain in real estate, out of the above, is an immediate reduction in service fees. You need to involve a professional (ideally, who would charge a good fee) for a real estate transaction. But what if we said that Blockchain can make a smart contract that would take care of the following:

• Prepare a detailed, thorough, extensive contract that would lay out what is needed to be done, and when
• List the nitty-gritty in important details and didn’t allow funds to transfer until specific requirements were met
• No interference in exchange of funds due a third-party or ‘a bad actor’ once they have been verified as completed

Great, right!? This technology is changing the workings of the real estate world, especially people who
have won the auction on a house.

Blockchain: Auction Industry: Art

Another sector that is popular in the Auction Industry is the art world. According to an article in Forbes:

“The art world witnessed an extraordinary auction on November 13th at the Christie’s Auction House in New York. Not only the collection of the late Barney A. Ebsworth raised over $300 million, setting the new world auction records for Edward Hopper and Willem de Kooning, but also for the first-time-ever, the results of the major auction sale were recorded using Blockchain technology. To do so, Christie’s has collaborated with Artory, the leading independent Blockchain-based registry for the art market built on Ethereum Blockchain.”

​Reference Source: https://www.forbes.com/sites/elenazavelev/2018/11/26/is-Blockchain-the-right-solution-for-the-auction-houses/#70b4d2a31bf8

Artory’s Registry, built on the public Blockchain, creates a system for vetting, memorializing and protecting transactional data, while simultaneously allowing the artwork’s owner to stay completely anonymous. One of the striking features of Artory’s Registry is that the company uses third-party vetted service providers, such as auction houses, to supply the data for their registry, creating a reputational guarantee that the information is correct.

Weeks before the auction Richard Entrup, CIO at Christie’s, commented in a press release: “Our pilot collaboration with Artory…reflects growing interest within our industry to explore the benefits of secure digital registry via Blockchain technology.”
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Reference Source: https://news.artnet.com/market/christies-artory-blockchain-pilot-1370788

The art world wasn’t very open to a decentralized database technology, but as we are approaching a new era of online transactions, Blockchain would benefit the younger collectors who want to partner with notable brands and establish relations with living artists.

Another reason of the art world excepting Blockchain is because of the success of Bitcoin cryptocurrency. Jason Bailey, the founder of Artnome and an advisor to Portion suggests that, “the lack of good data has led to a major problem with forgery and misattribution”, and the fact that Christie’s used “Blockchain for the Ebsworth collection is an early step towards data transparency and improved provenance.” Bailey also suggests that “the art market currently fails to support most working artists in any meaningful way.”

Reference Source: https://coinspectator.com/news/1084395/is-blockchain-the-right-solution-for-the-auction-houses

​Future of Blockchain in the Auction Industry

Now, that the world is opening up to a decentralized database for secured transactions, we are to see if all auction houses will now add Blockchain tools to record auction data routinely.
Real estate professionals at Propy state their opinions on how it will affect the industry in an interview recorded: https://steemit.com/blockchain/@terrybrock/blockchain-first-ever-auction-in-real-estate-what-it-means-to-you

The art industry’s growing interest in blockchain was made evident by its presence in the media. There was a noticeable increase in art and blockchain-related news, and a number of conferences were dedicated to the subject. 2018’s Ethereal Summit, a global conference about blockchain technology, placed emphasis on the art world, even concluding the event with a live auction.

Reference Source: https://www.etherealsummit.com/

A lot will depend on the extent to which the big art market players, will adopt this technology in their operations and we are yet to observe how long it will take. If you need more information on Blockchain, you can get in touch with the App Scoop mobile application development Vancouver team: https://app-scoop.com/contact-us.html