In the summer, FT Alphaville attended a retreat organised by fin-tech investor Sean Park, who heads up the venture firm Anthemis. The event introduced us to a number of Anthemis" portfolio and partner companies, all of whom were somehow connected to disruptive trends in finance. Among them was a company called Trōv. At first sight Trōv wasn't an obvious disruptor. Its offering was subtle and seemingly niche. The company defined itself as a creator of applications that help people collect and benefit from information about everything they own. On closer inspection, however, Trōv appeared to have the potential to do something much more important than that. In some sense, it presented the means to finally connect the abstracted financial system with the tangible world of real stuff. Outside of the commodities markets - and even then the physical connections are sometimes abstracted - this is simply not the norm in finance. Yet here we find a company attempting to build a platform on which existing stuff can be marked-to-market real-time, in a manner that evokes a global inventory check for high value items, as well as the itemisation of everything considered unique or rare. What's so disruptive about that and how does it differ to, say, the value discovery provided by Ebay? Well, arguably, the difference here is that these items are not technically available for sale or in an auction process. They're only being valued as if they were. The objects and their values are known only to specific or nominated parties; not the whole market. Those parties that are in the know, meanwhile, get a better picture of the inventory they're managing and the likely liquidity risk they might face if they were to sell. For now, in Trōv's case, customers are mainly "high net worth" types (a.k.a the rich). The reason they are inclined to engage is because the system provides them with access to the real-time understanding of the value of their stuff (liquidity risk aside), its location as well as its documentation. An added benefit is also the ability to prove ownership without paper receipt and consequently authenticity. Why would anyone want to digitise their belongings in a way that clearly jeopardises so much of their privacy? Well, for one thing, the benefits of digitisation may outweigh privacy concerns as the digital economy integrates around us. Insurance companies, for example, are already cooperating with Trōv to provide discounts to policyholders who manage their tangible wealth in this way. As a press release from the company stated this week, the most obvious benefit is the "just-right" insurance that can be provided by removing the risk of under or over-estimating inventory value: Trōv's technology and processes provide transparency into the value of insured items, enabling insurers to reduce risk and better protect clients" possessions through just-right insurance policies. "This is a turning point for insurance carriers, for whom active management of valuables and contents is now a reality," said Scott Walchek, founder and CEO of Trōv. "Trōv exposes changes to the values of insured items, and connects insurers to policyholders" acquisitive lives to ensure tangible assets are always accounted for and - with accurate insurance-to-value - always protected." Secondly, NSA concerns aside, the data remains heavily encrypted and reserved for client use only. Though, of course, clients may wish to share that data with third parties such as insurance companies if they so desire. But, given that the values provided are not liquidity-adjusted, one can imagine how one day it might be seen as beneficial to input this data into an integrated "system" - albeit in the most impersonal and private sense; inventory declaration for price discovery purposes, very much how the way that financial markets currently operate. For example, in today's financial markets ownership of securities or warrants is tracked and registered. But these details are only known to direct participants in deals and exchanges. They are never revealed to the public, or even to regulators (unless under some legal duress). At most, the public sees statistics classified by owner type, and/or sums of outright inventory held by the financial system by volume. These statistics allow for market transparency and better price discovery. Indeed, inventory is willingly disclosed in many markets precisely because if it is seen and warranted by a central exchange, its value can be better protected with derivatives that provide in some way a type of "value insurance" of their own. Obviously the insurance in this case doesn't represent replacement cost, but the value that could be destroyed between now and the point at which you sell the asset. What Trōv is offering therefore is much more akin to an inventory checklist, which has one day the means to influence real world prices - much the way that the disclosure of inventory and stocks in commodities becomes essential for determining the real value of commodities available for sale at any minute. It's a fascinating trend not least because it represents the opposite of what's happening in financialised commodity markets. As we've commented frequently here on FT Alphaville, since 2008 commodities have been leaking into "dark inventory" stores, out of sight of the market (which would otherwise take account of the stock in its valuations). This has been facilitated by financial players who are prepared to pay up for exposure to commodities, which they believe will be valued tomorrow even if they are not necessarily needed today. The situation helps producers tap tomorrow's demand today, in a way that supports production at higher levels than they perhaps should be. The surpluses are parked as financialised inventory. Yet, for prices to remain supported in a such a way that production doesn't have to be cut back despite surpluses, it's essential at some point for this inventory to disappear. This is where dark inventory comes into play, for if you don't know if something's out there you can keep being incentivised to produce. What's interesting with Trōv, though, is that this is a commercially motivated venture that believes it can bring value to the world by shining a light - albeit in a compartmentalised way for now - on markets that have traditionally always been "in the dark." And while Trōv's offer is currently focused on high value collectible assets it is easy to imagine how the concept could be rolled out to almost everything eventually. In some ways, we're already seeing this digitisation trend occurring the retail space. For example, proof of purchase is increasingly being logged at the sales point, meaning the days of keeping washed-out receipts just in case something is stolen or breaks are limited. Consider too what happens even now when you lose an iPad? The loss is partially mitigated by the fact that there is an official record of your ownership which prevents anyone else from claiming it as their own. Better still, the iPad's digital signature can give you a clue to where it is, improving the chances of retrieval. Once objects are routinely digitised at the point of purchase and logged in such a way that potential depreciation and uniqueness is tracked at ongoing market rates, we will be provided with a window into the real economy like never before. Objects used and depleted from the system, or simply reused by multiple owners, will be judged and valued by their real utility and usefulness to the system. Stuff not used but hoarded for extravagance's sake, meanwhile, can be judged to be leisure items and valued entirely differently. But even in the high net worth silo of Trōv, the concept - or concepts like it, especially if widely adopted - could represent a "King Solomon mines"-type treasure strike for the world. And the consequences for "value" in that circumstance could truly be fascinating. That's not to say there won't, as in the case of commodities, be an incentive for a Rembrandt to disappear back into the dark every now and then (especially if it transpires there are a lot more Rembrandts out there than we thought). But with technology out there that's capable of 3D-printing Rembrandts ever more seamlessly, the lack of an authenticated digital record for that object if and when it does resurface may now jeopardise its ability to be authenticated and valued as a unique object. As we've stressed before, in a world of perfect copies, peer-based verification protocols (similar to the system employed by Bitcoin) may be the only way to single out originals or "special" items and the particular narratives that are attached to them. If that really is the case, then platforms like Trōv could do very well indeed. All the more if they were to become fully integrated with central information hubs, competing valuation platforms, sales sites and/or exchanges. All that said, the most interesting aspect of all this for us is that the end-user side of the market is being incentivised to reveal "high value" stuff out there at the same time that commodity inventory is being pushed increasingly into the dark. Does this mean that attempts to artificially tighten commodity markets only encourage the world to dig up and reveal existing inventory ever more efficiently? Or does it portend that if and when transparency is achieved in tangible good markets, these too will be incentivised to rebury things back in the dark if and when the markets are discovered to be too plentiful? In which case, the following quote from HG Wells on the "organization of plenty" in the abundant hypothetical future does seem apt: It is only in the past century that man has learnt the real lesson of plenty, that far more important than getting things is getting rid of things. Related links: The rise of the real collateral "mining" business - FT Alphaville What is the value of unique? - FT Alphaville In scarcity we trust series - FT Alphaville