How to blockchain physical artwork
It is hot! Blockchain Crypto Art, everyone wants to blockchain some kind of kittie, frog or high-value blue-chip fine art. What is the best way to tokenize and “blockchain” physical artwork?
Mona: I have created 323 paintings and I am still a starving artist. I love what I do but it is hard to make money.
Tim: Didn´t you just sell 5 paintings yesterday at your opening? That should get you over 30k!
Mona: The gallery is really slow to pay and they also will take a commission. I spent a lot of time and a lot of money on materials for those paintings. I will be happy when I am paid sometime this year.
Tim: Some time this year? What is the gallery doing with the money? Collecting interest at the bank?
Mona: You can not collect interest in a savings account since the interest is so low, but I have no idea what they are doing. Maybe the money went to the gallery hookers and blow fund and they need to sell someone else´s paintings so that they can pay me.
Tim: Sounds more like a ponzi than an art gallery.
Mona: It does but there is not a lot I can do about it. That is why I want to blockchain my paintings from now on.
Tim: What do you mean?
Mona: I want to create a blockchain token that is one of a kind, for each one of a kind painting that I do. Then I can sell the painting with the token and you have to have the token to own the artwork itself.
Tim: Wow that sounds really interesting. I have heard of bitcoin but this sounds really far out. How can I find out more?
Mona: I have already started to tokenize all of my paintings. Here check out this wallet. It has a token for most of my paintings.
Tim: That is wicked! I am not sure what it means but it sounds really cool.
Mona´s PHONE RINGS
Mona: Hello Mona speaking
Phone: Hi, I just bought your painting “New Kids on the Blockchain” I am wondering when I can expect delivery.
Mona: Sorry I am not sure what you are talking about. When did you buy it?
Phone: I bought it on the DEX the token named “Newkidsontheblockchain” and a website said that it goes with your painting. I paid 50k USD in ETH.
Mona: I don´t remember putting it up for sale.
Phone: What do you mean you do not remember? I just paid 50k in ETH for this. I want to know when I am going to get my painting!
Mona: I only posted on my website that I am selling my artwork with associated token assets. I did not say which token belongs to which artwork or where to buy them.
Phone: Well I bought one of your paintings and I expect delivery. I already have the token.
Mona: In my wallet I still have the token, I think you have the wrong token.
Phone: You are a scammer, I am going to go on reddit, twitter, telegram and the media with this story. You are done!
Tim: What was that all about?
Mona: Someone claimed that they bought my artwork, they bought a token on a decentral exchange and expect me to deliver the artwork that they say belongs to the token to them.
Tim: How could this happen?
Mona: All I wanted to do is blockchain my things.
In the above example, Mona had good intentions. She just wanted to create and sell a token that goes with her physical artwork. This would show transparently when the artwork transferred ownership and Mona thought it would be harder to make a fake version of her artwork by using blockchain. Furthermore, she wanted to get around using a gallery to sell her artwork as gallery payment morale is very low.
It turns out in the process of getting rid of the gallery as a third party and taking control of her artwork she also left herself open for a possible scam.
Who is to say which token belongs to which physical object?
Who is the scammer? Who is getting scammed?
In the above example, Mona is the artist, the caller is the buyer and the seller is the person that sold it to the buyer.
The artist: Could Mona be the scammer? YES! It would be easy to make more than one token for a limited edition of one. If someone buys the token you can always claim that you did not issue that token and have nothing to do with it. Of course, you are risking your reputation, but really if done right it would be easy to deflect responsibility. The higher the value of the artwork, the higher the chance that such trickery could pay off.
The buyer: Could the buyer be the scammer? YES! It would be easy to claim that you bought the wrong token and the artist should deliver the artwork. Playing the victim and guilt-tripping the artist into giving in would be the tactic. Maybe even threating legal action against the artist and claiming that they are the scammer as described above.
The seller: Could the seller be the scammer? YES! It would be easy to make a token and claim it belongs to artwork by a known artist and get someone to buy it at a discounted price compared to the past market price. There are decentral exchanges that allow peer to peer trades without any kyc or third party to go to if a trade goes wrong.
It could be worse!
Let´s say that you are a high profile artist pumping out mega sales in 6–7 figures for your work. You are known for creating tokenized physical artwork. A clever scammer would simply stake you out. Watch what you are doing and gather information on what you are working on. When the scammer thinks that you are nearly done with your artwork they make a token. They might even do this every day until it is clear that you have finished your artwork and have created a token to go with it. Then when the artwork is for sale, the scammer can try to sell the token they created and it is feasible that it is indeed the “real” token and not a fake, since it was created in the same small time frame that the token the artist created was. This is only worth it for high-value items, but if all of this blockchain stuff takes off this is a real possibility.
These are just problems, These are not solutions
Stop being so NEGATIVE!
Indeed these are problems. We need to feel pain before we can come up with real solutions, so is our human condition. Let´s take a look at some possible solutions that would be easy to implement.
Use third parties to verify
- Use a Verifier
A “verifier” would not need to be a curator, but rather someone that simply confirms “this artwork belongs to this token” the verifier would be staking their reputation and would be paid in order to verify. This would require research and technical know-how by the verifier. Imagine a website where you can browse verified tokens with links to the artwork they represent.
2. Use a platform to release your artwork
Instead of going “totally naked” like Mona did in our example. Use a platform that helps artists release art tokens. Although most of the platforms so far concentrate on digital artwork they should be able to help you tokenize physical artwork and act as a kind of verifier.
3. Public Announcement
The artist could announce publicly on social media and via press releases information about the artwork including technicals including the basic “this is the token that belongs to this artwork” with a link to the token on a block explorer.
4. Use an Open Dime
An open dime is a device that can hold bitcoin or bitcoin-based tokens. The open dime device would have to be mounted on the artwork in a way that it can not be removed without damaging the artwork so that the open dime could not be replaced. The contents of the open dime can be confirmed by connecting to it, without the ability to withdraw anything from it. In order to withdraw from the open dime, you need to break the seal which is very clear to see when done.
These are a few ideas on how to tokenize physical artwork. What are your ideas? Are you a platform or service provider? Give us your big shill below!