Art and digital currencies: all you need to know
Sports, real estate, tech, travel. We have been writing deep dives into how different sectors are embracing digital currencies and blockchain. These are very different worlds that are taking very different approaches, but they have one thing in common: adoption is happening.
This is also true for the art world.
The art world is very diverse and very complex. From struggling artists trying to barter for rent money while selling their paintings on street markets to the freewheeling world of millionaire auctions, the art market touches most of our lives in one way or another.
What role can digital currencies play here?
CryptoArt is a thing
Well, for starters, there is CryptoArt. Due to the nature of the blockchain, and its quite unique ability to create unique digital objects, artists are creating digital works. If you google the concept, you’ll find that a lot of what’s being traded is based on Internet culture and memes, such as Rare Pepes, which may appear to be… well… unserious. This shouldn’t be confused with the spurious use of Pepe the Frog by the American far-right, which has gained the character a reputation as a hate symbol. Even the creator of the image has disavowed this usage of his character, which was never meant to be political at all.
The money that’s changing hands on these sales, however, is quite real, and the market surrounding these images has thrived in spite of the political controversies. Of course, concurrently to this, there is a market for digital art that is more akin to what we’re used to seeing in regards to art auctions.
In a world where museums and galleries may be struggling with the pressures of the COVID pandemic, and the social distancing rules and practices that have arisen from it, digital art and the digital art market may just experience their first taste of the spotlight.
This is still a nascent industry, mind, but the extraordinary potential of this technology to verify uniqueness may be decisive in other ways.
Art is being tokenized
One of the difficulties of investing in art has to do with its illiquidity. Much like real estate, once you buy a work of art as an investment, you can only offload it if you find someone who is willing to pay a higher price for the exact same thing. You can’t sell shares in an Andy Warhol painting.
Or can you?
Turns out you can. Thanks to the power of blockchain, Maecenas successfully sold shares in a multi-million dollar painting for the first time. 14 Small Electric Chairs by Andy Warhol was indeed tokenized and its shares were sold thanks to an Ethereum smart contract in September 2018, effectively belonging to 100 different investors.
And blockchain can verify authenticity too
Companies like the Blockchain Art Collective or Verisart already have blockchain-based solutions on the market for smart verification of authenticity. These tools will be used to prevent forgeries from entering the market. As we all know, this is an important issue in the art world. It’s hard to perfectly identify every artist’s distinctive style, especially when there are highly talented forgers out there, who work their whole lives to imitate greatness. With the power of blockchain, however, this ceases to be a concern. Every physical artwork can be associated with an on-chain certificate of authenticity that will give you all the information about its provenance in a secure, seamless way.
The art market loves digital currencies too
This should come as no surprise. The art world is full of people who are iconoclasts, love risk and are very much in awe of innovation. It’s a perfect world for a technology that is so revolutionary.
This is not a potentially great market. It’s already real.
From as early as 2014 (!), there have been galleries out there embracing Bitcoin and other currencies to allow you to buy art from greats such as Roy Liechtenstein or Peter Beard, and that market has only grown since.
Right now, premier galleries from everywhere in the world, such as Thee Gallery, are accepting digital currencies for any and all sales.
So what does the future hold?
While some may resist, it’s impossible to even consider it without acknowledging the impact of blockchain, digital currencies and downloadable art. These are forms that have come to stay, and whilst the disappearance of physical objects is absolutely not in the cards for the artistic world, they will have to learn how to share with their more techy counterparts.
And as far as paying for art goes…
The money of the future is coming.
And it waits for no one.
So if your business wants to make sure it will thrive in what the art market is becoming, you must be ready for these changes. Traditional payment forms are inadequate and archaic, ill prepared to deal with the challenges of this brand new world.
At Utrust, we are digital natives. This is what we do. Join us here.
