In this article, Christophe Verdot, founder of Signature Chain, explains how non-fungible tokens (NFTs) can make a difference in the digital art market.
Fine art is a multibillion dollar market, which, in recent years, thanks to the rise of internet and digital technology, has been drifting from art galleries and auction houses to the web.
Fraud in a digital age
On the one hand, this shift makes art accessible to a much wider audience. However, on the other hand, it raises the issues of authenticity and copyright protection.
Due to digital technology advances, art replication and forgery have, unsurprisingly, become more sophisticated, triggering concerns among sellers and buyers alike. The art market is full of replicas and forgeries that can fool not just your average Joe, but also a seasoned enthusiast. Fraud has been on the rise globally, hitting physical as well as digital art.
To respond to this challenge, artists have begun to certify their digital works on blockchain and distribute them over a peer-to-peer, InterPlanetary File System (IPFS) network. Crypto art, as it’s been referred to, has been gaining prominence thanks to the immutability and decentralization of blockchain.
However, another issue comes up. If a digital image is freely available for viewing or downloading, what value does it have? Producing or buying digital art becomes an uncertain prospect for artists and collectors, respectively, as images can be easily duplicated and plagiarized.
If an art work can be replicated for free, it has a lower market value or none at all. Watermarking authentic works has been a common practice for artists, but advancements in technology are making this measure less effective.
NFT as a solution
To maintain the value of digital items, the blockchain-based concept of “digital scarcity” has been introduced, which is exercised through non-fungible tokens (NFTs). NFT is a cryptographic token representing a unique object or part of it.
An NFT is created as a blockchain transaction that permanently links the token to a unique digital fingerprint or hash on an open, distributed and permanent ledger. The possession of an artwork and a corresponding NFT signifies a verified and undisputable ownership.
NFTs can operate as provenance assuring that an artwork is genuine and providing accurate information on past ownerships.
While online art auctions are notorious for bad provenance due to unscrupulous sellers claiming to have documented ownership of fraudulent art, NFTs emerge as a vital alternative. If an official blockchain address for a specific piece of digital art is published on relevant websites and social media, any user can verify the authenticity of the work.
The immutability of blockchain ensures that an NFT as art documentation has not been altered or falsified.
Tokenized art works are generally presented and shared as HD files, which might be intimidating for some artists and buyers. However, what gives value and scarcity to digital art is not a file itself but the ownership of a “license” in the form of an NFT.
The owning of an NFT gives a buyer or collector the right to display and resell a connected work, but not the creation copyright nor the right to duplicate it commercially. The creator retains all intellectual property rights.
Due diligence still required
Of course, blockchain technology is no magic. Nothing can prevent scam artists from replicating someone else’s piece of digital art, tokenizing it and selling as their own, just like it is the case with physical art.
Still, digital art is available on the internet for the entire world to see and critique. Therefore, fraud can be easily detected. Social media, in particular, have become a powerful tool in that respect. By engaging in fraud, artists put their reputation, public image and potential sales a risk.
On the users’ or buyers’ side, it is still necessary to do minimal due diligence to avoid falling for fraud. Buying blindly from random and anonymous artists is not advisable. Artists should be able to display their portfolio and background, as well as their blockchain address.
SIGN Art solution
On the Waves blockchain, a project called SIGN Art is currently being developed by Signature Chain. The project aims to bring the Waves protocol’s advantages to digital art creators and collectors.
Thanks to its instant transactions and low fixed transaction fees, the Waves blockchain is a perfect fit for NFT issuance.
The current crypto art market is heavily dominated by Ethereum. But the Ethereum blockchain is burdened by up-and-down gas costs, which has been a major source of complaints from collectors and artists.
Over the past year, Signature Chain has developed a certification platform allowing anyone to certify any file or document on the Waves blockchain.
On SIGN Art, the file certification feature will be available soon, allowing creators to certify their works with an option of tokenizing art for selling. SIGN Art could also be used as a portfolio of certified works and/or a digital art marketplace. A beta version of the service is already available on the testnet here: https://beta.sign-art.app.