As a distributed ledger, blockchain technology is well-suited to providing an immutable, transparent, censorship-free database of record, thus reducing fraud in a wide range of industries and practices.
And that is particularly true in the art world, where the blockchain is already being used, primarily to authenticate high-value works. But that’s not the only way blockchain can affect the world of art, collectibles, and luxury goods.
A transparent platform for creators and collectors, Portion today announced its blockchain-based global auction house. Backed with $5.5 million in funding from institutional investors, Portion aims to provide creators, collectors, and bidders with a certifiably authentic means of exchanging high-value goods in return for cryptocurrency.
Be aware though — this is not an attempt to create a blockchain-powered eBay.
“Portion is very much focused on the higher end of the market,” Portion cofounder Peter Engleman told me. “The first platform to launch in a few months will cater directly to notable artists. The future state of Portion will expand to include physical goods as we continue to develop mechanisms that provably link a physical good with its Blockchain Certificate. The Blockchain Certificate is a unique token standard that verifies authenticity and initiates the record of provenance for future transferences.”
More than 80,000 people fall victim to non-payment or non-delivery in online auctions each year, costing those affected over $138 million. And that is just one type of online auction fraud, which has remained in the top five types of internet crime the FBI has dealt with every year for the last nine years.
Using the blockchain, it is possible to ensure goods are ratified and certified and that payments are made. Every transaction registered with Portion is facilitated by this technology, creating transparency of ownership and the final prices paid for all goods.
And by exclusively accepting cryptocurrency, Portion can validate proof of funds in real time, only allowing users to bid on items when they have sufficient funds in place. Once the auction is complete, funds are held in a smart contract and released upon the winner receiving possession of the goods.
So what goods will be available on Portion?
“Portion is launching a platform for artists to create crypto art and crypto collectibles,” Engleman said. “Focusing on respected artists in the community, Portion will cater to its community of users by offering high-quality work from these renowned creatives and creators. In the future, Portion will work with these same artists and creators to offer physical goods from creator to consumer.”
Portion has created a three-step process to ensure goods are authentic and appropriately represented. Authentication is initially granted through its partners, and all users are interviewed and asked to provide references and demonstrate their credibility before they are given the ability to create Portion’s Blockchain Certificates.
Will having such a stringent policy to authenticate everything on the platform, along with the creators producing the available goods, hurt the platform’s scalability?
“After crypto art and crypto collectibles, Portion will scale outward to include other arts and collectible verticals,” Engleman said. “By working with brands directly, who initiate the provenance of luxury goods, Portion limits the future need for re-authentication. Goods outside Portion’s registry will utilize the network of authenticators worldwide. By initially focusing on creator-to-consumer, it is simple to scale on Portion’s platform. However, ensuring quality is more important than purely the volume of transactions.”
So what’s next for Portion?”
“Portion will launch [its] first platform within the next few months,” Engleman said. “Imagine a marketplace specifically for digital impressions of art that fluctuate in real time as users buy and sell. As cryptocurrency enthusiasts continue to find new means of diversifying into new and exciting assets, crypto art has become a top contender. Portion will then strategically enter the physical goods space connecting creators to collectors.”