Blockchain creating a new world order for art

Published in

Coinmonks

5 min readDec 20, 2021

Art is a field quite unlike others — it brings in a unique mix of personal passion and a lucrative investment. It is a challenging market to enter, however, as the prices of the best artworks are astronomically high, making it difficult for art lovers to buy good art and for the artists to find buyers.

The market is global and highly diverse, which brings in a unique set of advantages and problems. Though it provides both artists and collectors a great deal of choice, it is hard to get an overview of what is on offer and ascertain provenance of a piece.

Quiet revolution underway

Thanks to blockchain, these issues can now be dealt with aplomb. The technology is driving a quiet revolution in the way art was created, supported, bought, and sold. True to its reputation as a disruptor technology, blockchain has reorganized the art industry, unlocking the immense potential within.

Blockchain-based platforms enable collectors to buy artworks in share and trade them in more liquid markets. This helps create more diversified high-end art portfolios sans the associated high costs, opening up new opportunities to participate in the market for artists. Blockchains facilitate recording and sharing of cryptographically secure certificates of origin, thus paving way to the tamper-proof, trustworthy audit trails of the piece of work.

Several exceptional projects are already in the making using blockchain-based technologies. For example, there is Everest Recycling, a film documentary tackling the environmental issues on Everest. Another prominent example is Phannapast, the rising star of the art and fashion scene in Asia, and presented her work on a giant billboard in Times Square, New York.

Transparency & elimination of fraud

Due to technology, art markets become more transparent and fraud can be eliminated to a great extent. Otherwise, in the digital environment, controlling the copying and plagiarism of the artwork had become unmanageable. Moreover, intermediaries such as YouTube, Spotify and art galleries were taking the bigger pie of the sales from the art pieces.

Blockchain helps artists and collectors interact directly, ending the role of intermediaries. Direct interaction between artists and collectors helps create new forms of patronage. It also ends up in a better value chain for both. In the conventional model, intermediaries interfere in the value chain of the artists and their audiences, leaving them with control over the value system. Blockchain gives the control back to the artists and collectors.

Trustless environment

Intermediaries often come into the picture as someone is needed to facilitate interaction between the artists and audiences. Art galleries, for instance, have a well-cultivated reputation for showcasing art pieces of top-notch art. Aficionados will visit these galleries rather than touching base with the artists directly. While more renowned artists may be having their dedicated audiences, most artists are dependent on the art galleries for their income.

Blockchains, on the other hand, are known for enabling tasks in a trustless environment. Trustless means an environment where there is no need for the stakeholders to personally know each other. Rather, there is a system in place for ownership verification which negates the need for trust.

Reputation system

A blockchain-based service for artists and audiences has a reputation system that defines reputation for the artwork and artists. The system helps the collectors validate the artwork without any communication with another human. Rather, the system validates the artwork and encourages prolonged cooperation between all stakeholders.

Tokenization

Blockchain facilitates tokenization of a creative product. Every single piece, from an artwork to a video, can be redefined as a small consumable unit of art that can be traded as tokens. Tokenization helps by dividing an expensive artwork into affordable shares for audiences. It also helps in liquidity by opening up a secondary market for the tokens where the token holders can find customers for the tokens they hold and get immediate profit on their holdings.

Dynamic pricing

Less experienced artists often misprice their creative pieces, leading to them getting less monetary rewards than they potentially are good enough for. On a blockchain-based system, the artists can get the benefit of using the dynamic pricing mechanism that can be as efficient for a single token as for a multitude of them. Taking into account the supply and demand, the system set the dynamic pricings.

Transfer of ownership and royalties

With blockchain, smart contracts come into play. These executable programs are enforceable on the participating individuals or organizations based on the preset contract rules. This facilitates development of transparent revenue models. The ownership and transfer of digital rights can be tracked without doubt as all details are recorded on a blockchain. Royalties can be transferred as per the understanding of the parties.

Self-governance

Centralized systems have no provision of artists or collectors having any say in governance. Have you ever witnessed a scenario where art galleries or any other platform is factoring in the opinion of these stakeholders. In blockchain-based ecosystems, decentralization is a key factor. DAOs (decentralized autonomous organizations) have no central leadership which often have their own interests to meet. Decisions are taken bottom-up, governed by a community.

Wrapping up

Blockchain is now already taking the world of art into a new age. Hooking into the technology, decentralized organizations like Art Can Die have introduced a decentralized ecosystem for the art world. All participating parties are able to take advantage of tokenization, transparency, trustless environment, and other standout factors of the blockchain ecosystem and take their experience to another level.

Indeed, leveraging blockchain-based technologies such as DeFi, tokenization, NFTs, DAO and cryptocurrencies, such a platform offers investors, artists, art lovers and crypto users a modern and efficient way to participate in the creation, funding and promotion of art projects. Artists no longer have to be creators and businessmen at the same time and can devote 100% of their time to creativity, while still enjoying great opportunities to showcase and fund their work through an international audience of investors.

In conclusion, blockchain has helped create an ecosystem where everyone wins: the artists are funded, the community of investors see the value of tokens and the value of artworks increase and the community of art consumers and general public can experience exceptional art.

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