Blockchain and the art world are becoming increasingly intertwined. And this marriage has the potential to revolutionize the art world, as in other industries, in a variety of ways.
Blockchain use is skyrocketing in 3 prominent branches of the art world. First, is in the fight against art crime, especially fraud. Next , it is allowing part ownership in artworks. Lastly, it is used in the creation and monetization of digital art forms.
Blockchain is a way of storing information so that it is almost impossible to change, steal or hack. When a blockchain is created, it is circulated and added to a ledger. Then, the ledger is spread across a complete network of computers in a system.
Utilizing these attributes will and is changing the art world.
Blockchain and Art Crime
The forging of artworks has been a very profitable business for thousands of years. However, over the last 400 years fraud has become, forgive the pun, an art form in its own right.
Scandals are legend in the art world. From the most prestigious galleries and auction houses, to little known provincial museums or online sales, fraud and forgery are rampant.
One report from the Switzerland’s Fine Art Expert Institute (FAEI) stated that ‘around 50% of art circulating on the market being forged or misattributed are likely on the conservative end of the spectrum’, that is according to Yan Walther (R), Executive Director of the FAEI.
A piece of art should have documentation known as provenance. This document shows the history of ownership for the piece of art, and is meant to confirm its authenticity.
However, many a fraudster, both in high society and low, will offer fake Certificates of Authenticity to inexperienced buyers.
Blockchain technology can make this type of fraud a topic for the history books.
This can be done by the tokenization of art.
It works like this. Once an artist has created a new piece, they can send a picture with details such as, title of the piece, genre, date, to a blockchain company. The blockchain company then issues a token. This proves the authenticity of the work. Companies currently working in the sphere include Verisart, Artory and Blockchain Art Collective.
The artwork is then added to the blockchain. Thereafter, when the artwork is sold the token is relayed to the new owner, over the blockchain. This transaction is then automatically recorded on a new block, with all the relevant information and a time stamp.
This then becomes a permanent record that is impossible to alter. If one of the computers in the network tries to alter the data, the others will deny the attempt.
Part Ownership of Artworks Through Tokenization
Art collection has always been the preserve of the rich and famous. However, the tokenization of artworks is going to change. It will give everybody the opportunity to invest in iconic art by offering fractional ownership via blockchain.
Using blockchain in this way, will also allow investors to diversify their holdings. Moreover, it will open markets to new investors, who otherwise could not participate in fine art investment. This in turn will add to liquidity in the marketplace.
There is already a lot of movement towards the use of blockchain in this niche with companies such as maecenas.
Maecenas is, according to their website ‘a marketplace that allows anyone to purchase fractional interests in great works of art, using the ease and efficiency of blockchain technology, and the same crypto security used by the world’s leading banks’,.
They famously sold a 31.5% share through fractional ownership of Andy Warhol’s “14 small Electric Chairs” and continue to grow a fine reputation.
Monetization of Digital Art Forms
Digital art forms have been around for years, but were difficult to monetize. This is because of the ease with which they could be replicated. Artists were unable to prove ownership of their works. Therefore, it was difficult to build a marketplace around digital art works.
This all changed with the advent of blockchain technology. Now artists add their work to a blockchain and ownership is established.
“I never felt such a freedom as an artist to sell online. It is super fast and easy to learn, even for someone who has never had anything to do with the blockchain.
I started last year and now I’m fully convinced that this is the future. The speed with which I can sell and trade my artworks is unbelievable and each time the buyer knows that the piece is authentic because of blockchain.
I can directly sell to potential collectors without a gallery – not that I avoid gallerists, but it is very convenient.
I have full control over what I accept or what I don’t and I can promote my art thru social media (twitter) or telegram and discord or cent”.
Blockchain and the art world are at the beginning of something very special. Blockchain will make art fraud a thing of the past. Furthermore, it will allow for the flow of new investors through fractional ownership of artworks. On top of that, it revolutionize digital art for artists by monetizing their art. Finally,it will create investment opportunities for collectors to make money trading digital art.
Before finishing I would like to give a special thanks to the crypto artist burst who took time out to give his thoughts. Please check out his work on superrare by clicking on his name above.
Check our article on how blockchain may just change the face of social media.