is developing faster than we think
is developing faster than we think
Although there are many unanswered questions relating to legislation, standardization, and governance, various stakeholders and many start-ups are increasingly involved in implementing these emerging technologies.
This prompts a thorough review of their capacity for disruption of the market and of the inherent challenges.
I am very concretely without the presumption of completeness, giving you some of the recent cases of a blockchain application to the art business.
Buying art with cryptography is the straightforward application of blockchain and cryptocurrencies to art. Cryptocurrencies are well suited for these kinds of transactions, as they enable you to quickly and safely transfer large value stores to anyone in the world. There’s no need to wait until banks approve the transfer, and there’s no percentage of the transaction going to the processor.
Billions have been raised with this new sector over the last decade, and some of the early investors are looking for diversification why not give them art in addition to conventional investments?
Blockchain network Maecenas collaborated with London gallery Dadiani Fine Art in July 2018 to sell fractional stakes in 14 Small Electric Chairs (1980) by Andy Warhol. 31.5% of Warhol’s work went up for sale in cryptocurrencies, including Bitcoin and Ethereum. The total dollar value of the work’s crypto-currency share was $5.6 million. It was an artistic and technological landmark.
Moving forward, using blockchain and tokenization in this way could allow easier market access, investment diversification, lower transaction costs, and increased liquidity.
For one, it will make the securitization process much simpler and less costly than it is currently, requiring less and at times no intermediaries. That, in turn, makes fractional ownership of expensive pieces of art (or of any highly valuable item) much more viable than was the case before.
Since blockchain-based digital assets can be traded quickly and safely without the need to trust a centralized authority, markets in such tokens are inherently more open, requiring far less volatility than markets that use conventional intermediaries. That tends to make them more available and, therefore, more liquid.
Blockchain network Maecenas collaborated with London gallery Dadiani Fine Art in July 2018 to sell fractional stakes in 14 Small Electric Chairs (1980) by Andy Warhol. 31.5% of Warhol’s work went up for sale in cryptocurrencies, including Bitcoin and Ethereum. The total dollar value of the work’s crypto-currency share was $5.6 million. It was an artistic and technological landmark.
Moving forward, using blockchain and tokenization in this way could allow easier market access, investment diversification, lower transaction costs, and increased liquidity.
For one, it will make the securitization process much simpler and less costly than it is currently, requiring less and at times no intermediaries. That, in turn, makes fractional ownership of expensive pieces of art (or of any highly valuable item) much more viable than was the case before.
Since blockchain-based digital assets can be traded quickly and safely without the need to trust a centralized authority, markets in such tokens are inherently more open, requiring far less volatility than markets that use conventional intermediaries. That tends to make them more available and, therefore, more liquid.
It’s possible to purchase a digital artwork directly from the artist with no middlemen using blockchain. Consequently, having been an art dealer has never been cheaper in history. You can purchase a piece of art online right now for under $10. The file you are getting wouldn’t be an original reprint. Instead, it would be an original, verified copy that is part of a limited (or perhaps unique worldwide) run.
Modern art markets are the élite domain. These are curated and mostly suit the preferences of Westerners of the upper class. Nevertheless, as soon as you digitize art and create blockchain art marketplaces, access to those marketplaces will become more straightforward for everyone.
Without a gatekeeper or gallery manager standing in the way, any artist can sell it to everyone else in the world.
This movement towards the decentralized selling of art gives control to artists and owners on what to do with their art. Buying and selling art will happen peer-to-peer at much faster levels than traditional art markets. You may want to buy a piece for a week to display, and then resell it next week. That is possible with decentralized blockchain art marketplaces.
You will be able to take out offers from all over the world when you sell. Eventually, smart contracts should enable the transaction, ensure your funds are obtained, the file is transferred to the receiver, and the original is no longer on your computer.
One part of the digital art movement focuses on computer-based art creation. This can mean sketching something, shopping for existing pictures, or depicting something in the form of GIF. These kinds of art start life as computer code.
Since tokens based on blockchain are unique and uncopyable, they can be used as the basis for purely digital artworks that cannot be forged and whose ownership can be clearly claimed, preserved, and transferred. This can and is opening new art forms and the markets for digital collectibles.
Such kinds of technology art projects keep questioning our preconceived ideas about what art would look like. Projects such as CryptoPunks have inspired the CryptoArt movement, challenging digital art stereotypes through the development of works explicitly designed for an exchange through cryptocurrencies.
Originally started as an “experiment,” they have gained attention in the last years, being featured alongside similar digital marketplaces like SuperRare and Dada.nyc at Christie’s Art+Tech Summit.
Cryptokitties were introduced in 2017 as a unique collectible tokens and sold for over 100’000 USD each.
Artist Kevin Abosch created ‘Forever Rose’ in February 2018, a virtual artwork worth $1 million and offered for cryptocurrency fractionally. Each purchaser will own 10 percent of the work as a token in a blockchain
Provenance and authenticity are the main determinants of any artwork’s value. The applications of Blockchain technology in art don’t end with just digital art. Digital artworks often take advantage of blockchain art authentication and open marketplaces, but this can be applied to traditional art as well.
One important application is blockchain art provenance, helping art buyers establish a history of previous owners back to the original artist.
The benefit of using blockchain is that the database is immutable and is append-only. The provenance of a piece of art once mentioned on the blockchain will be challenging to copy, fake, or alter. As blockchain enters the art market even for older pieces of art, the technology-art divide closes even further, bringing analog art into the digital age.
Christie’s New York made art world history in November 2018 when it was collaborating with the blockchain-secured Artory registry. The Barney A. Ebsworth collection’s $318 million auction house sale, one of the year’s most prestigious sales, saw its transactions reported entirely via blockchain. Artory’s registry records history, provenance, and archival material while enabling buyers to remain anonymous, increasing trust among buyers and sellers.
Another critical project in this field is the Swiss-based 4Artechnologies. The company has created a complete ecosystem for the Art world, producing digital passports for art, allowing a full track and immutability of the blockchain by tracking the 3D characteristics of the Art object the Art DNA.
Those are not abstract exercises alone.
And this is just the tip of the iceberg. As tokenization and blockchain-related technologies and applications mature and become more traditional, we can expect more online platforms and more established players to use this new technology.
To art dealers, fans, and aficionados, this means a whole new world of opportunity.
