Digital Art and Photography Within The Blockchain
The art world is starting to embrace blockchain. This year, the world leading art fair, Art Basel, even hosted a blockchain conference for the first time. The world of crypto finance is taking over artists and gallerists as both parties study the massive benefits behind the nascent technology. Indeed, the blockchain could profoundly alter how art is created, consumed, distributed, and financed. Yet, the art industry has a long history of pain points. Let’s highlight five core areas where blockchain could help the art market.
TRANSPARENCY OVER ART PROVENANCE
As stated by the Art Newspaper, the greatest challenge in the art world today is transparency. The art market, worth $63 billion in 2018, has always suffered from a lack of transparency over art provenance and ownership history. Art forgery is on the rise, accounting for almost a half of artwork, and puts both collectors and artists at risk.
Blockchain, as a distributed ledger that records all transactions and tracks data history, could provide clearer stats on provenance and ownership, as well prices. Improving transparency in the art world would lead to greater trust from buyers while protecting artists from fraud as they can prove their art is authentic thanks to the blockchain.
DIGITAL SCARCITY: PHYSICAL EDITIONS VS DIGITAL EDITIONS
The second area of improvement in the art world is with scarcity. As much as authenticity is important for buyers of art, scarcity is a considerable element that has an impact on prices and dramatically influences an artwork value. Collectors are afraid that the art they buy could be unauthentic, copied, or stolen.
Photography has undergone dramatic changes over the last decade. The number of photos taken has seen an increase of 1,400% in the last years. With the totally near digitalization of the medium, digital scarcity makes even more sense. Thanks to the blockchain, digital rare editions of photographs can be produced, in the same idea of physically limited editions, improving artwork value.
ARTISTS’ RIGHTS MANAGEMENT
When artists create a piece of art, they must copyright their work in order to claim it’s their own or receive a payment if the artwork is used in the digital space. Currently, there is a total lack of transparency on how artworks are “consumed” online, meaning anyone could use an artist work without compensating the copyright holders properly.
The blockchain is a game-changing technology that provides contracts for copyright owners, through the issuance of “smart contracts.” This innovation leads artists to finally aim for a solution that could help them secure more royalties when their artwork is used online.
LIQUIDITY OF THE ART MARKET
With transactions of millions of dollars — for example, the “Portraits of Maerten Soolmans/Oopjen Coppit” by Rembrandt (1634) was sold for $180 million — the art market liquidity is traditionally low. Even though dealers can secure artwork sales, independently or through auction houses, the time for individuals to pay for an artwork can take ages, leading dealers with liquidity issues.
With cryptocurrency enabling to “tokenize” an artwork, liquidity in the art world can be improved. Buyers — artists and collectors — can acquire a “stake” into an artwork. With tokenized artworks, financing the acquisition of a masterpiece becomes easier. The fractional acquisition also opens up the art market to smaller investors, democratizing the art world on the way.
THE FUTURE OF ART COLLECTION
Collecting artworks and masterpieces has been traditionally reserved to HNWI (High Net Worth Individuals) — people with over $1 million in their bank account. How about the everyday people, who appreciate art, but can’t spend millions in buying artworks?
With the blockchain, not only democratizing the access to artworks acquisition becomes a reality but also the type of arts and collectibles has been rethought, leading people to trade new forms of digital art. A recent article by Culture Hack highlights alternative trends in collecting art, totally unknown in the art world prior to the emergence of the blockchain.
CryptoKitties is an Ethereum blockchain based platform that offers tradable digital cats. Digital assets like Cryptokitties can be traded and are created as rarities, with traceable ownership. The success of CryptoKitties has proven that blockchain technology can impact even the way we buy, collect, or sell arts and collectibles in the digital space.
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