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Securing the art trade with blockchain

It now has come to the point that art forgery has become so sophisticated that even the experts get fooled.

As reported, researchers from the Swinburne University of Technology have developed an electronic system that promises to make life more difficult for art forgers, using the same cyber security approach used by Bitcoin.

The Dean of the Digital Research Innovation Capability Platform and his colleagues in the Data Science Research Institute developed the system that will guarantee the provenance and authenticity of works of art.

Benefits of the system include improving the logistics for the art trade and providing additional benefits to artists, such as ongoing royalties.

ArtChain enters the market

Blockchain is best known in the context of Bitcoin and its competitor online virtual currencies. It creates the secure environment within which these ‘cryptocurrencies’ can be stored and traded.

The way blockchain works can be compared to a wedding ceremony. On the big day, friends and family serve as witnesses to the event, with each of them able to verify that the ceremony took place.

Similarly, in a cryptocurrency transaction, a distributed network of invited computers acts as the witnesses with each recording that an exchange of funds took place.

Just as everyone invited to the wedding remembers the event, the computers all hold an identical copy of the transaction record.

If anybody tried to fraudulently manipulate a cryptocurrency record, the doctored copy would no longer match all the other computers’ version and the change would be rejected.

Although there are so many high-value transactions in the art trade, one of the key problems in this industry is the authenticity of the artworks and collectables.

Developing an art-trading platform based on blockchain would eliminate that concern as there would be multiple witnesses on hand to observe the artist selling a piece to a dealer or collector, and then witnessing each onward sale of the piece.

The first level of security comes from attaching to the object a smart, internet-enabled electronic tag, connecting the artwork to the Internet- of-Things (IoT).

These tags, which give the artwork a unique online identity, can also be integrated with GPS tracking modules, so its physical location is always known.

As a further security measure, the team has developed an artificial intelligence (AI) program that analyses high-resolution camera images of the real artwork.

AI, which is based on deep learning algorithms, was trained to spot fakes by allowing it to analyse a huge library of images.

Attributes such as colour saturation, brightness and depth are all analysed to detect minor differences between the real version and the copy.

The system is already working quite well in the lab while real-world testing began in 2018.

The art-trading platform will integrate all these new technologies into a single interface. A combined system that utilises AI and IoT, plus the blockchain, has been developed.

The whole system involves multiple new technologies that are all done at the University.

Ongoing royalties

Registering a work on ArtChain would be a safeguard because it would provide a timeline and prove who the creator of the artwork is.

Aside from its security credentials, the other key feature is the way the blockchain record grows over time.

Each time an object is traded, a new line item, or ‘block’, is added to the end of the existing record file. The record, therefore, serves as a chronological history of the object’s ownership and its provenance.

For the art market, provenance is very important. A work held in a collection for 50 years is sometimes seen as more valuable than a piece that has been continually traded on the secondary market.

The growing blockchain record has other potential advantages for the art trade. It allows for royalty payments for the artist for each onward sale of their work.

Items sold by artists early in their career can significantly increase in value over time as the artist makes a name.

Traditionally, the artist cannot get any benefit from that. However, a new royalty system was embedded in the blockchain platform.

Because blockchain cannot be manipulated or changed by third parties, the artist can collect the royalties many years later.

Artists will need to be educated about blockchain-based art transactions before they are likely to accept it. They need some convincing in terms of trust.


The system that combines AI, IoT and blockchain could be readily adapted for the trade of other collectable items, such as jewellery.

The technology could also become an indispensable tool in stemming the expanding trade in counterfeit medicines.

The same blockchain-IoT technology to record the authenticity and provenance of artworks could be used to secure the pharmaceutical supply chain.

It can provide traceability of each drug carton back to the original manufacturer.

A blockchain-based platform like this could augment efforts to control the problem by regulators and pharmaceutical companies, which already includes making packaging harder to fake.

In the next few months, connections with other industries, particularly in the area of healthcare, education, transportation and logistics can be made.

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