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What makes unique assets valuable?

Art and collectables is a $2 trillion dollar asset class. It includes wine, watches, jewellery, classic cars and arts. Its been used by sophisticated investors for years as an uncorrelated store of value - and hence, acts as a wonderful asset class when diversifying your investment portfolio.

However, what defines and preserves the value of such an asset? The key word here is "provenance". Provenance is the single most important thing to the collector when assessing such unique assets. If deemed questionable, then this would naturally have a detrimental effect on the price. Value is determined by information such as the history, previous ownership, exhibitions, featured galleries, literary features, etc. However, the reliability of said information is invaluable and thus, the reliability needs to be preserved.

The problem

In light of the above, there are numerous areas for concern when purchasing a unique piece of art or fine wine. So imagine the steps required when trying purchasing art for example:

You must first find the piece of artwork;
Thereafter, the value must be determined;
The authenticity must then be assessed;
An auction is then required to bid on and purchase the item; and
Finally, ownership of the item needs to be both transferred and verifiable.

The resale value throughout the above process and subsequently also needs preserving. This would all be simple to do if there was a centralised title registry. However, this solution is unworkable because investor privacy demands make them unwilling to work with centralised institutions.

Who is Codex Protocol?

Blockchain technology is revolutionary because it acts as a decentralised ledger. All transactional information can be stored and maintained within the Global State, having been simultaneously validified across a distributed set of nodes. All transactional information is therefore immutable. Additionally, Blockchain technology allows users to maintain a bespoke level of privacy.

Codex Protocol can make use of said technology to create a decentralised title registry for art and collectables. They can store provenance information whilst maintaining privacy for investors. It is designed for the whole industry, supporting third-party applications for insurers, asset-backed lenders, galleries, artists and online marketplaces.

The token will be required to access the registry and modify titles, with the cost being inversely proportional to the tokens staked within each application by its users.

How will everything work and progress forward?

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Adoption and Partnerships

Additionally, they will be building the first application on this protocol - Biddable - to encourage mass adoption of the protocol. Biddable is designed to allow the user to spend Cryptocurrency at auctions - whilst making it possible to maintain anonymity.

Biddable was not created in isolation - but in partnership with a "consortium of industry leaders". This means that from launch, biddable will be a widely-adopted market solution. From inception, an investor can pay with Crypto at 5,000 auction houses, on over 10 million items per year, worth over $6 billion dollars.

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Roadmap

The roadmap above is a picture that was taken directly from the Codex Protocol website. The first interesting feature is that the Mainnet launch is set to precede the Token Generation Event. This means that ICO investors can expect a fully operational product before the token generation.

Additionally, it is good to note that everything in the current roadmap is due to take place by the end of July. This means that investors will not have to wait long periods of time before seeing progress in the product. The product will ultimately be ready in the short term, available for mass adoption.

Conclusion

The Codex Protocol addresses a real issue in a widely untapped market. It provides a solution that seems to tick all the boxes required in order for it to function as the industry standard. With the partnerships already established, Codex seems like it will make a huge market impact going forward.

This is not financial advice and therefore, all investment decisions should only be taken upon personal study and consultation with a financial advisor. That said, I believe Codex Protocol is one worth watching out for.

By CryptoCrayze