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Provenance Using Multiple Blockchains: A ...

Provenance Using Multiple Blockchains: An inexpensive proof of concept.

May 09, 2022

I have tackled the idea of provenance in some detail in my journal. While my scribbles would not do the concept any justice, and not all the details have been ironed out, a roadmap for my own work has been charted to varying degrees. So I thought I'd share my thoughts on creating provenance for a physical piece of art across multiple blockchains for the artist and collectors. Let's start with a mindmap I made today:

I am going to get into each step without boring you too much, I hope. We'll create a bunch of interesting characters and follow the journey of the work together. The main point is that as a creator, I want to make sure my physical piece and its digital one-of-one print stay together to prove I am the creator. It's easy enough, right (sarcasm)? But what happens if the collector decides to flip the digital and stays with the physical for a while? Or what if a museum acquires the physical but wants digital provenance? What happens to the existing chain of ownership? Is it now broken? Maybe, and maybe it isn't. Let's follow the steps and talk about them.

1/1 Digital on Eth / Tezos is the first Certificate, connecting the physical to its digital counterpart.

So step one is rather simple. The artist will mint a 1/1 (one digital print) of the physical work. This can be done on Ethereum or Solana, to provide the collector of the piece the ability to determine whether both will stay together, or break up. Regardless of the collector's future decision, some KYC has to happen because the artist will need to ship the physical piece to the collector. In this case, we can surmise that the collector who has opted to receive the physical piece along with his 1/1 digital chooses to KYC (although this data does not need to be added to the 2ndary certificate of provenance as you will come to understand later).

The first important data point of the physical/digital artwork: The Provenance Certificate on Bitcoin

Once the artist has shipped the piece, a conversation about provenance can be had with the new owner of the work. Does the owner want the world to know they own the physical? Or would they like only the wallet information on the permanent record? For the purpose of my example, let's say the collector wants their family name as part of the certificate. Obviously, the 1/1 is immutable, so we cannot update it, but we can create a third, inexpensive certificate on the Bitcoin blockchain that does two pretty amazing things:

A) It connects the 1/1 information of the Digital AND Physical to the new owner (Wallet, Name, Date, etc) and stores it on the Bitcoin blockchain.
B) This Bitcoin certificate follows the artists' creation of the work to its first owner on the blockchain and re-certifies the transaction that took place.

Let's say a certain Quentin Collins buys my physical piece via an auction from Foundation. He will have to KYC somewhat for me to ship it to him. In the example, Quentin decides he wants the entire world to know he is the first owner of the physical and the 1/1 digital (beyond the wallet and transaction ID). He KYCs and I as the artist enter this information as well as an image of the work into the Bitcoin blockchain (or any blockchain of choice, such as WAX, Tezos, etc). It might look like this:

Title: Birdsongs 36"x36" (Pastels and Acylics on Canvas) + 1/1 Foundation Digital Print
Artist Site: URL of Artist on Blockchain
Provenance: Created 5/4/2022 by endpop | Acquired by Quentin Collins on 5/9/2022 via Foundation App | Transaction ID: 369BLAH0a60285C7f76Ef1652dc97727435612561256
Physical Link: URL of a post where I was making the piece or video on IPFS
Digital Link: Original 1/1 URL of the work on Foundation App
Statement: I, endpop, certify that the physical and digital 1/1 was transferred to the Collins Family to wallet address: 0x369BLAH0a60285C7f76Ef1652dc977b2cb723C9 and Quentin Collins is the first owner of this work.

I would mint this 1/1 into the blockchain with these details. For this, I would use Bitcoin, but you can use any number of chains to inexpensively mint the certificate. I quite like the idea of Bitcoin because the certificate remains on-chain. However, this can also be done using WAX where one can add as many details as possible to cement the sale that took place. The more information here, the better.

So what happens next? The owner, Quentin Collins, gets his physical and digital, and I have three important records of the transaction as does Quentin (I can choose to transfer the certificate or keep it for my own record). This certificate I make will become important down the line as you will see. Why? Because Quentin is a shrewd man, and months later decides to flip his digital print for 15 ETh that he knows he will get because he can prove HE is the real owner of it. And, he is not willing to part with his physical ownership just yet. He wants the physical piece to stay in his family (or so he says). Without the third certificate, Quentin would break the provenance. Because of the third, he benefits, as does the artist as you will see. Along comes Trudy and a museum...

Quentin sells his 1/1 on OpenSea for 15 ETH, while the physical goes into a museum.

So Quentin Collins sold his 1/1 digital print on the open market and got 15ETh for it. Awesome. A 10% royalty automatically goes to the artist, and the new owner of the 1/1 decides she is going to keep it. Let's call her Trudy. Trudy can verify that Quentin is the true owner because Quentin has provided her with the provenance certificate that proves Quentin's wallet was the first owner of the piece, and the link to the original, its transaction path, etc... All match with the artists'. It's the real deal. So she's happy to grab that 1/1 (she's rich but not stupid). And provenance wasn't broken.
By now you might be doubting it, and that's OK. Nothing is perfect. But this is pretty close. But before I get into that, let's complicate things a bit.

A museum has decided to offer Quentin Collins 4.5 million Yuan (to be funny) for the Physical piece itself but wants reassurance that provenance can be added to the record in some physical manner. For this, they would need the artist (me) to sign off. Normally, physical pieces being resold would not fetch a royalty unless Quentin and I had some formal agreement. Let's say we didn't. But in this case, Quentin wants the $$$ and the museum wants proof positive by having me at some opening gala. So I am contacted and I decide 133ETH is enough for me to provide more provenance for Quentin and the museum. Hey, it's my example, let me be a little greedy here, won't you?

Quentin and the museum agree and send the 133ETH to my wallet. I then mint another certificate of authenticity for the museum, adding an NFC chip that I will ship to them to add to the physical piece. This NFC will connect to the certificate I'm minting, and add the new owners to the list of owners. For gratis, I will even add Trudy's wallet to this new certificate (easy to obtain). After all, why should she not benefit from this too? Now that Quentin has his cabbage, he's happy. The museum can proudly display its acquired physical work, and the NFC chip tells people about the journey the piece took to get to their walls. Trudy finds out about the sale by reading Decrypt and...

Trudy gets into trading and flipping NFTS (becoming addicted to NFT gambling). Now what?

So Trudy now wants into the game! She's begun by flipping all her bored Apes and has gotten, well, bored. She is holding fast to the idea that this whole NFT thing is going to burst at some point, and having found out about Quentin's sudden wealth from the physical piece, Trudy is thinking now is a great time to flip that piece. Trudy is also super grateful that her wallet address is on that certificate over at the museum too. Because she knows exactly what she wants to do. She's going to sell the 1/1 she has to the museum itself. Why not? This way they can own both. So she contacts them. They tell her that they are not that interested.

Now what? No worries, the museum has no idea that Celebrity X has been tracking that painting himself, and offers Trudy a whopping 100ETH for her 1/1 ... And she gladly transfers it to him. Is provenance broken yet? Nope. We still have a record that proves Trudy was the 2nd owner of the piece when the museum purchased the physical from Quentin (her wallet is also on the museum's certificate, remember), and there is also a transaction record of when Trudy acquired it from Quentin on OpenSea. Celebrity X can trace it all, every transaction, every owner... Thanks to me. And I am earning a little more royalty from Trudy's sale.

Where does the story for the painting end? This depends on my laziness. Am I willing to keep minting a certificate to keep that physical and digital connection in this way? Well, it does pay off in the long run. So my suggestion, if you find my approach too daunting (although it is not), is to think of another way you would do it. Because it does matter. You owe it to the collectors and the world. And again I stress that these certificates need not be expensive to produce. The Tezos, WAX, and BSV chains are great for this. But I would choose and stay consistent. If the collector wants it on the same chain as their 1/1 ... They can pay the gas fee if need be. But take note, this certificate is not really for them, it is for YOU and the world.

Let me know what you think... Cheers.

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