Startbahn, Japan’s Leading Art Blockchain Company, Builds a New Art Infrastructure for the Digital Age
Interview by Sophie Arni
Transcription by Sherry Wu
Published on May 26, 2021
“Imagine a future where art affects every aspect of society, and various parts of the society go back to art,” opens the mission statement of Startbahn, a Tokyo-based art blockchain start-up. With 2020 behind us, we have entered full-speed ahead towards the art world’s digital acceleration. Many curators and artists have been reticent of this digital turn: how will artists get paid for their virtual labor? How will we protect artists from copyright infringements when access to art is completely democratized? To recall Walter Benjamin, can the aura of the artwork be preserved in an age of digital reproduction? With the current craze about NFTs aside, I got more and more interested in the opportunities offered by blockchain technology for the betterment of the art market, an essential component of the well-being of artistic practices in our contemporary era. After hearing about Startbahn Cert. blockchain certificate with an IC tag used to secure authenticity at this year’s Art Fair Tokyo and hearing the news about their successful USD $10 million Series B funding, I knew I had to interview Taihei Shii, Founder and CEO of Startbahn.
Shii is not your usual tech entrepreneur. An artist himself, he created Startbahn as a solution to his own difficulties creating and selling artworks in an unreliable, inefficient, marketplace for contemporary art. Only after meeting him did I realize the extent to which blockchain technology could finally be the key to the never-ending question: how to make the art market more reliable?
While the traditional players of the global art industry might hesitate to take the digital plunge, I got convinced, as I am certain you will too, that blockchain – in particular – acts as the perfect accelerator of the existing art infrastructure. With the normalization of royalty fees and sharp detection of copyright infringement. it offers the possibility for visual artists to be on equal footing with their musical counterparts. As you will read in this interview, blockchain also offers a rare opportunity for collectors and the future generation of art historians to normalize provenance research. Previously only conducted by large museum institutions and auction houses, the practice of archiving every artwork with its exhibition and ownership histories will soon become a democratized, automatic, and seamless affair.
With a German name evoking an airport’s departure runway, Startbahn has all the tools at its disposal to make us fly towards an optimistic vision of digitized art, permeating all our human activities. It is no coincidence that the start-up originated in Japan – after all, it is rumored that the first bitcoin was invented by the now-infamous Satoshi Nakamoto, supposedly of Japanese nationality. I got the rare chance to interview Shii at Startbahn’s pristine headquarters located inside The University of Tokyo’s campus. The following conversation followed.
Sophie Arni: You are the Founder and CEO of Startbahn, one of Japan’s leading blockchain art companies, whose mission it is to ‘build an infrastructure for art distribution and evaluation for the digital era.’ I’m also interested in your background as an artist. For our readers, could you describe how you got involved in blockchain, and introduce the opportunities blockchain technology provides for the art world?
Taihei Shii: This whole process started in 2006. I graduated from Tama Art University in 2001, and the project leading to Startbahn started in 2006. At the time, I was beginning my career as an artist and the main question driving me was how I could become a memorable artist of our contemporary era. I found out that every memorable artist was synonymous with a symbol. When you look at the artists who hold their place in the art-historical timeline, whether it’s Da Vinci, Andy Warhol, or Picasso – they were all products of their time. They all had profound, and uniquely different revelations in their respective society. So when I thought about myself as an artist, I looked at how I could make an impact on my current environment. I thought I should be an artist who can face these revelations, and make art that would become symbolic. It was a long period of thinking.
When I thought about myself as an artist, I looked at how I could make an impact on my current environment.
Before 2006, my artistic practice focused on projects related to the internet. I made many artworks and exhibitions using digital tools and computerized systems. I made a haiku online, and I showed art projects based on a web application in an exhibition at the Hiroshima City Museum of Contemporary Art and Mori Arts Center Gallery. The works were shown on computers but visitors did not really interact directly with the devices. There was a computer exhibited in the museum space but no visitors interacted with it the way I had expected them to. This made me stop and think. What is the influence and what is the impact of this kind of art project? Memorable, symbolic artists do not create these kinds of artworks. So I thought of two ways I would express and distribute my artistic practice. The first was to show artworks in a gallery or museum setting that convey the concept of technology but would not directly use technology. This bookshelf, for example, which I made in 2006, called IT, was exhibited in Takashi Murakami’s curated event "GEISAI". The second was to build a symbolic infrastructure for art in this digital age. This is when the idea for Startbahn was born.
In 2006, I started to use technology to facilitate art infrastructure. When I talk about art infrastructure, I’m talking about distributing, managing secondary distribution, managing archives – the entire system built for artists, art professionals, and art enthusiasts to access information about artworks and the artworks themselves. I had many ideas at first. One of my first inventions was to create a royalty fee system for young artists’ secondary market because young artists suffer in the art market. There is a lot of pressure for emerging artists to create their career paths and multiply activities to reach the status of a ‘good artist.’ The biggest gap in the contemporary art market was how to evaluate and fairly sell the newly-made artwork or the emerging artist. So I thought about a system to give a royalty fee to the artist for the secondary distribution of his/her artwork by tracing it on a computerized network.
The biggest gap in the contemporary art market was how to evaluate and fairly sell the newly-made artwork or the emerging artist.
That was our patent in 2006, which we registered in Japan and the U.S. I lacked funding in those days, and I spent three years of profit to obtain the patent. I felt propelled to do so because of several Japanese artists I admired: Daido Moriyama, Yasumasa Morimura, and Yutaka Matsuzawa. The challenge is that what they have done ahead of the world in their respective fields has not been widely known. There are a lot of similar episodes in the Japanese art industry and one thing I did not want to do is to become another artist who claims he was ahead of his peers.
In 2014, I finally established Startbahn, Inc. In 2015, with a team of engineers, I finally launched the service called Startbahn, a platform for collectors and artists to sell and resell artworks, with royalty fees. Even the art writer, the art critic, could get a fee out of this transaction if they wrote a critique of the artist.
It worked well but when the collector would buy an artwork through Startbahn and resell it at another auction, it would go out of trace. So we started launching our own tracking system at the beginning of 2016 and fundraised with the start-up incubator at The University of Tokyo. This was the very beginning of Startbahn as it exists today.
Looking back, I was lucky enough that a lot of people in the art and technology industry talked about reselling artworks online. It’s still very much a current topic. We were lucky that we had the right team at the right time to face a big challenge. It was very hard to develop our technology, and it was very hard to convince the traditional art market to adopt digital tools: artworks have traditionally been sold by individuals and auction houses. There are many existing spaces for art distribution and for art exhibitions, but one missing link was a reliable, secure space for art tracking. It is not easy to track an artwork after it has been sold, to trace ownership, and to send royalty fees to artists from secondary distribution after their artwork has been resold. It was a challenge but we were lucky enough to have a great team to bring this vision to life.
There are many existing spaces for art distribution and for art exhibitions, but one missing link was a reliable, secure space for art tracking.
S.A.: Could you give us more information about the Startrail system? It seems like a foolproof way to authenticate artworks and view the provenance of an artwork.
T.S.: Startrail is a blockchain system built for the public benefit. It is designed to last forever, with an organization structure of decentralized governance. This means Startrail will continue to exist in the event Startbahn goes bankrupt.
We believe the Startrail network will expand like an open-source. In the future, we are thinking to keep innovating our governance. If art galleries, artist estates, auction houses, and art collectors use the network, they could vote for the future of the network. [Startrail] is really designed for decentralized governance – this is something we stressed in our white paper, because people may misconstrue that we are trying to monopolize the art blockchain network and become a tech giant. We had to clearly announce that this network works not only for our benefit but for the public’s benefit. We know that Christie’s and Sotheby’s want to protect their client and sales information. The whole industry is thinking of new ways to incorporate blockchain technology to make a better, more efficient, and more productive art market.
Startrail is a blockchain system built for the public benefit.
S.A.: Who can input information on Startrail?
T.S.: Startbahn Cert. is our new app to easily visualize data on Startrail. It connects blockchain information to artwork thumbnails. You can input information through Startbahn Cert. If you are representing MoMA for example, you have access to MoMA’s secret key to be able to write down that the work in question was actually exhibited at MoMA. This makes the data very secure.
6. Startbahn Cert., 2021. Courtesy of Startbahn.
In terms of individual collectors, the names and locations are hidden but they can be made public if the issuer wishes to disclose it. Basic information about the work’s title, artist's name, size, medium, and date is disclosed, and for the more complex information – including the history of conservation and repair work – this access to information is highly customizable. You can tell on which platform the work was bought. For example, if an artwork was sold at Sotheby’s, it would be considered a more reliable transaction than if it was a private sale by an individual seller with no track record.
S.A.: From your experience, are collectors enthusiastic about digitizing their collections? How do you deal with collectors who wish to remain anonymous and are reticent about putting their collections on a database?
T.S.: We are very careful about hiding private information. Nobody likes to disclose when, to whom, and at what price an artwork was sold. Startrail does not store this information, but supports the reliability of transactions at the same time. The name of the party issuing information and the date of issuances are automatically recorded and can become proof in court.
S.A.: Do you foresee that the current generation of artists will be empowered by this platform, that they will take responsibility to archive exhibition history and provenance of their past works?
T.S.: For the artist, Startbahn Cert. will be providing an easy tool to make a resume. At the MoMA and the Met, every artwork has its history clearly labeled and publicly available, including provenance and exhibition history. You have to be a top-tier artist in the current art industry to maintain this kind of archive, but using Startbahn Cert., this information is automatically recorded. This makes it very easy to archive an artwork’s history and share it in all reliability.
S.A.: What do you think of the future of the traditional auction art market, especially in the contemporary art sector and the boom of the NFT market? Do you think Christie’s, Sotheby’s, Poly Auction, and Phillips will still dominate the market in the decades to come, or NFT marketplaces will attract the younger generations of collectors?
T.S.: That’s a big question, and there are several aspects to the market boom of NFTs (Non-Fungible Tokens). Startbahn Cert. is blockchain connected to “real,” physical art. The current bubble is happening between digital art and blockchain technology. The technology is the same in both cases: we do not store digital artworks on Startrail, only the connections of ownership. As with any marketplace, the data is stored in distributed storage or cloud servers such as IPFS. We already connected thumbnails to the Startbahn Cert. The thumbnail itself is an example of an NFT. “Digital art” or “crypto art” are just different terms to explain the same concept, and we are already planning some projects to connect more digital art to the network.
Startbahn Cert. is blockchain connected to physical art. The current bubble is happening between digital art and blockchain technology.
In terms of Beeple’s auction record, I think his work sold well over its highest estimate because it had an element of traceability and reliability. This means what adds monetary value to the work, what makes it expensive, is the infrastructure itself surrounding the NFT. In the physical art market, industry experts have claimed that 50% of all art sold is fake. If you want to buy an artwork, there is a 50% chance that it is fake, it doesn’t matter if it’s a $500 million Da Vinci or a $10,000 painting for a young artist: you have a 50% chance of buying a fake work. These types of transactions are unreliable, untraceable, and ultimately unsafe.
Blockchain is a tool to easily manage inventory and fluidize existing artworks. As the creator or sole collector of the work, you can claim copyright and automatically receive income every time somebody prints your artwork on a t-shirt. We can do almost anything through smart contracts, and they are automatically executed. Sometimes copyright is claimed after an artist’s death, other times there is an estate taking charge of the artist’s career and royalty fees after the death of the artist. If an artist dies, the artwork will remain forever – that is the concept behind Startrail.
We can do almost anything through smart contracts, and they are automatically executed.
In terms of when and how NFT marketplaces will take over traditional auction houses as the leading art-selling platforms, I have mixed thoughts about it. On the one hand, NFTs marketplaces are saying that they want to grow and overtake the whole art market. But there is no compatibility between each platform. If you issue an NFT on a platform like Rarible, you can set a royalty fee on secondary distribution. But this only works if you sell the NFT on the same Rarible platform. This lack of compatibility between different platforms is a problem we faced 5 years ago when starting Startbahn. We are trying to build a universal, standardized platform for NFT marketplaces but also tools for art investors and auction houses. That’s our next step in the NFT movement. We are focusing on the secondary market: the secondary use as well as secondary distribution. Startbahn Cert. is not only issuing NFTs or certificates but also protecting the secondary market as a whole. We are protecting the artwork.
We are trying to build a universal, standardized platform for NFT marketplaces but also tools for art investors and auction houses. That’s our next step in the NFT movement.
And when it comes to Christie's and Sotheby’s and their future in the NFT art market, I only have to point to the speed at which they pivoted and embraced digital art. These auction houses originated 250 years ago. I talked to people working there and the speed at which they reacted to this new movement was noteworthy. The fact that Beeple’s record was set at Christie’s also tells you about the power of the auction house’s brand. It made people realize that the auction houses and their specialists have the final say in determining an artwork's value. No matter where the art was born, no matter what shape it takes, they make the final price.
S.A.: Is Startbahn collaborating with museum institutions or mostly partnering with private collectors and galleries? Are museums in Japan interested in providing Startbahn Cert. for the works in their collection?
T.S.: We had a lot of layers when it comes to our customer base. We thought at first that our blockchain technology was going to support young artists, but it turned out to be highly effective and important for high-value artworks. We collaborated with e-commerce platforms, galleries, auction houses, and manga publishing houses. We are proud to have collaborated with Shueisha, one of Japan’s leading manga publishing houses [One Piece, Dragon Ball Z, and Naruto were all published by Shueisha]. We provided Startbahn Cert. to their rare manga prints archive, as part of Shueisha’s plan to bring more artistic value to manga. In Japanese society, manga is not considered a form of high art, so archiving is rarely taken seriously. But Masashi Okamoto from the Digital Business Division at Shueisha believed that Shueisha’s manga archive can become the Hokusai ukiyo-e print of the future. He wanted to bring the manga archive into a luxury version of art, with high-resolution printing and a blockchain certificate to authenticate provenance.
We also have other collaborating partners such as SBI Art Auctions, an important auction house for Japanese Modern & Contemporary Art. Most of our business is in Japan right now but we are entering an international expansion phase. We changed our internal company language to English and we are expanding overseas. The company is at a turning point right now.
The company is at a turning point right now.
S.A.: What do you think about Japan’s contemporary art market? What does blockchain technology solve in the current gallery system? And what do you think of Tokyo’s place in the growing NFT and blockchain art industry? It’s a global phenomenon but it seems that China, Singapore, Japan, and the U.S. are leading this movement.
T.S.: It’s important to think of Modern & Contemporary Art in the U.S. and how much they have expanded in market value. America had an inferiority complex towards European cultural tradition. They did not have a long art history, so they had the motivation to build it. It’s a similar phenomenon right now. Countries in the Arabian Gulf are interesting. We are looking forward to the future of blockchain infrastructure in countries like the UAE for example. They are building new museums without the heavy heritage of Western art history, or a longstanding art industry itself. There are so many opportunities to create a new infrastructure for better and more efficient art transactions. The same goes for China. They have built a lot of new museums but the art market is not mature enough so we see a lot of growth potential for blockchain x art there. In Japan, the government is finally opening up to the idea of growing the art industry and using technology to do so. I hope the art industry will expand in Japan in the coming years.
For blockchain, an important factor to consider is the specific laws in every jurisdiction. Legal issues differ from country to country. In this sense, Singapore and Switzerland stand out as leading the basic legal structures for blockchain technology to flourish. In terms of NFT, there is a big movement in the U.S.
S.A.: Lastly, I know that Startbahn sponsors physical exhibitions, including exhibitions at Tokyo University of the Arts curated by students of the Graduate School of Global Arts. As the CEO and a practicing artist yourself, do you feel Startbahn has a responsibility to sponsor young artists and exhibitions?
T.S.: We are still a start-up, but absolutely, we are looking to sponsor physical art exhibitions and artworks to the best of our capacity. We always try to make the art ecosystem and the art industry better.
Visit Startbahn’s website.
Visit Taihei Shii’s website.
Follow Startbahn on Instagram.
Sophie Arni is the Founder and Editor-in-Chief of Global Art Daily, an independent publication covering global contemporary art with editors based in the UAE, U.K, U.S., and Japan. Her experience in the arts includes interning at Sotheby's in London and Christie's in New York, assisting gallery booths at Abu Dhabi Art and The Armory Show, and curating in independent venues in the UAE and Japan. Her past curatorial projects and publications have been shown at the NYU Abu Dhabi Project Space, Sharjah Art Foundation, CHI-KA Space, MoMA PS1, Komagome Soko, and The Chinretsukan Gallery. She graduated from NYU Abu Dhabi with a B.A. in Art & Art History and from Tokyo University of the Arts with an MPhil in Arts Studies and Curatorial Practices.
Many thanks to Risa Mizuno.