Blockchain and Art: Is This Even Possible?

Those interested in blockchain understand that one of the technology’s advantages is that it can act as a digital incorruptible ledger. It turns out that all the spheres using intermediaries can benefit from blockchain.

Arts is no exception. In addition to disintermediation, blockchain can open up such new opportunities for art holders as co-ownership, price monitoring, and many more.

A Thorny Question About Artwork Authenticity

The Independent evaluates the share of fake arts placed in museums to be at least 20% of their total quantity. If museums are full of faked masterpieces, how much of such stuff is there at private collections, and how to make sure you buy a genuine piece of art?

If you’d like to acquire an artwork to decorate your house, you have a few options in general. First, to buy something at an art gallery or online. Second, to participate in an auction. Lastly, to order an individual artwork. While in the latter case the artwork provenance can’t be doubted, the other two cases can offer both authentic and fake works.

Who is responsible for artwork authenticity now and how much do such services cost? Currently, galleries and auctions selling arts serve as presumably incorruptible intermediaries that take a high commission for their services. If 40 years ago a gallery’s fee was as much as 20–30% of the artwork price, nowadays it’s as high as 40–50%. Indeed, some galleries insist on a 60% commission and that’s just unbelievable! This is where blockchain can come in handy.

How Blockchain Verifies It

One of the blockchain-based products to verify the authenticity and issue proper certificates for artworks is Verisart. Any artist, authorized agent, or collector can submit their pieces of art to the platform in order to generate appropriate certificates of origin for them. These records will be stored on the blockchain. Then, if any of the stakeholders would like to sell their collectibles, the provenance of these works will be easily traceable.

Another blockchain-driven solution is ascribe that focuses on tracking digital artworks. All the digital pieces of art stored on the platform are literally ascribed with the appropriate licensing and ownership rights. When anyone wants to use any artwork, the system, driven by smart contracts, automatically claims the copyright.

Art As Investment: a Meticulous Approach to Details

The research commissioned by Invaluable states that 33.7% of consumers purchasing artworks consider them a good investment. When viewed from the asset side, collectibles need to be not only traceable but look good for investors, too. For instance, a price for a particular piece of art needs to be comparable to its analogs. Also, potential art holders need to have the opportunity of co-ownership, whereas a seller needs to be sure that a buyer has the required money in her account. Blockchain can step up these procedures.

How Blockchain Uplifts It

The decentralized art gallery Maecenas allows investing in masterpieces in a convenient way. It not only protects art buyers from any fraud but makes deals transparent and cost-efficient. What does it mean?

The platform stores and later compares historical prices against market benchmarks to provide the deal participants with the most accurate information. Being decentralized, blockchain-stored data can’t be accessed by unauthorized parties, much less forged.

Maecenas charges only a 2–6% fee. Apart from artwork purchases, the system allows sharing of ownership rights, which is extremely useful when it comes to art as an investment. Moreover, the platform assists deals of any price with no minimum limit. Its smart contracts can automatically check whether a potential art buyer has the required budget in her account and then trigger a payment.

Opportunities for New Market Entrants

Although blockchain-backed companies are popping up in this sphere, there are still niches for newcomers.

If you’re a newbie here, it’s possible to start with software development by improving a particular aspect of the art market rather than crafting a big-scale project. The most cost-efficient way to kick it off would be to use an out-of-the-box blockchain platform such as genEOS. It provides developers with ready-to-use smart contracts, high-level scalability, and security — everything needed for development of your own Dapp.

Blockchain to Improve Art Market

Just like blockchain enters the financial industry, it is impacting arts as well. First of all, it serves to prove artwork provenance and make the process of buying art more transparent and affordable.

Some blockchain-based services are already here, but the market is still open for newcomers. Competition is getting fierce, so it’s high time to meet this growing demand with new solutions that make good use of ready-made blockchain platforms.