Digital Art: The future of Art is Ethereum, Blockchain, and Bitcoin

Digital Art: The future of Art is Ethereum, Blockchain, and Bitcoin

Digital Art and Ethereum: The future is blockchain

Digital Art has been one of the most attractive and dynamic of markets – finding amongst its patrons, passionate collectors, and calculative investors. However, one may find that it can also be a very challenging market to enter. With the best and most coveted pieces often demanding astronomically high prices, access to quality opportunities can be difficult, especially for first-generation investors without prior knowledge about the digital art world.

Also, it is not enough to merely buy a piece of art; sufficient measures must be taken to gain an overview of all the available choices, be sure of the provenance of a piece, and to guard against counterfeit and fraud.

The link between Digital Art and Ethereum

So how does one tackle these problems while investing in art?

Thanks to blockchain technology, new platforms are arising that address these issues, driving a quiet revolution in how art is being bought, sold, supported, enjoyed, and even created.”

Nowadays, blockchain-based platforms, are making it easy for collectors and investors to buy shares​ inexpensive and exclusive pieces of art and to trade them in increasingly liquid markets. This is opening up new opportunities for ordinary people without vast piles of money to spare, to participate in the market for art, and to create more diversified art portfolios without the exorbitant costs and risk of full ownership.

Other platforms are using blockchains as a means of recording and sharing cryptographically secure, demonstrably authentic certificates of origin and provenance for artworks and so enable tamper-proof, trustworthy audit trails of the lifecycle of a piece.”

This is helping in creating transparency in digital art markets, which are often plagued with problems of fraud and forgery. Blockchains are also providing a platform for collectors to directly interact with the artists, thus creating more profound and more personal relationships between the artists and their patrons.

Despite the several benefits of implementing blockchain technology in the digital art market, there has been a general sense of trepidation among the public due to its nascent and more often than not, volatile nature. Now that we are a few years into its development and increased social implementation, and the fact that just about every large company has a blockchain-focused division, the broader public is getting more comfortable with the idea of mainstream adoption.

However, we will have to wait for the blockchain to become better integrated with other technologies before we can expect a sudden crypto boom in the digital art segment.

What is Tokenization?

Tokenization is the process of using a blockchain to issue a digital token: a unique string of numbers that can be used as a digital representation of a physical asset.”

What’s unique about blockchain-based tokens is that they cannot be forged or, once created, altered in any way. They can also be transferred from one person to another just like one would do in a physical exchange: when someone transfers a token to you over the blockchain, it is legally yours unless you consent otherwise.

The first example of tokenization of art happened in 2018:

In July 2018, blockchain platform Maecenas partnered with London gallery Dadiani Fine Art to offer stakes in Andy Warhol’s 14 Small Electric Chairs (1980). 31.5% of the artwork went up for sale in cryptocurrencies, including Bitcoin and Ethereum. The total monetary value of the cryptocurrency share of the work was $5.6 million. It was a landmark event for both art and technology together.

Very soon, new companies were founded which specialized in dealing with art in Ethereum.​ Some of these companies creating such usable solutions were: Snark. Art, Swarm, DADA, and Blockchain Art Collective.

These platforms are an excellent example of the application of blockchain-based “tokenization” to the art market.

Advantages of Tokenizing Digital Art

1.  Partial ownership of the artwork

Partial ownership of art can make the process of securitization easier and much more cost-effective than it is today, involving fewer and in some instances, no intermediaries. This, in turn, makes fractional ownership of expensive pieces of digital art much more viable and easily accessible than has been in the past.

Since blockchain-based digital assets can be quickly and securely exchanged without the need to depend upon a centralized authority, dealings in such tokens are generally transparent and involve far fewer problems of fraud, than markets using traditional intermediaries. That tends to make them easier to access and, hence, more liquid​ .​

2.  Verify authenticity and provenance​    

Since tokens contain many data as well as assets, blockchain-based platforms can allow large groups of people to share trusted data over a network, without relying on a central authority to monitor and interfere. This leads to larger, more liquid and, more secure online art markets, where credentials for artworks, artists, buyers and sellers can be easily verified and where sales can be carried out securely and directly between the concerned parties.

3.  Protecting the ‘digital artists’​    

Last but not least, because blockchain-based tokens are unique, they can be used as the basis for purely digital artworks that cannot be forged and whose ownership can be asserted, maintained and transferred.” ​This is leading to the rise of new types of art and further strengthening the digital collectables markets.

Digital Artists and Blockchain Technology: The future lies ahead

Over the last few years, a new generation of artists, identifying themselves as digital artists have been at the forefront of blockchain innovation. While most of them are using it to tokenize or authenticate easily reproducible works of art, some artists have been using blockchain as a medium​ itself.​

A few years back, we saw the CryptoPunks​ , which then inspired the CryptoArt movement,​ challenging conventional perceptions of art by creating works specifically meant for trade through cryptocurrencies. What originally started merely as an experiment, has now increased in popularity and these digital artworks are now being featured in prestigious shows like Christie’s Art+Tech Summit alongside similar digital marketplaces like SuperRare and Dada.nyc.

In early 2018, artist Kevin Abosch created the ‘Forever Rose’, a virtual artwork valued at $1 million and offered fractionally for trade through cryptocurrency

List of Crypto Art Platforms 2020

1. ​ SuperRare​     

The artists on Super Rare issue authenticated single edition digital artworks. The art is certified on the Ethereum blockchain to prevent forgery and provide historical provenance.

The super rare platform – “Instagram meets Robinhood”​– is the most prominent art enterprise on Ethereum to date. This specially curated platform has brought about nearly 4,000 ETH in NFT art sales so far, with the average sales price of an SR piece currently at around 0.79 ETH. Notably, the first piece traded on the platform, Robbie Barrat’s “AI-generated nude #1,” sold for 75 ETH in a sale. The platform has brought together a high-quality community of artists and collectors who are excited to take advantage of the newly emerging digital art marketplace.

2. ​ KnownOrigin

Every digital artwork on knownOrigin is authentic and verified by the blockchain as truly unique. Known Origin is another Ethereum art platform that has seen some promising success, pretty early into conception. According to Defiprime report the​ platform is approaching 1,000 ETH in total sales with average price of each artwork for 0.23 ETH. Just like SuperRare, Known Origin has also fostered a strong community of creators and patrons.

3. ​ MakersPlace​ 

MakersPlace is Ethereum’s third-largest digital art platform and is currently nearing

500 ETH in total volume. The average sales prices of one of its pieces are 0.21 ETH presently. While it is smaller than the other platforms discussed before, it is backed by a strong network of talented artists.

4. ​ OpenSea​         

OpenSea is the “largest marketplace for rare digital goods.” One can find SuperRare, Known Origin, and MakersPlace pieces on OpenSea, as well as other kinds of NFT collectables like CryptoKitties and much more. Also, anyone can easily mint their own NFT art using the marketplace’s simple minting algorithm.

Industry Challenges

At Deloitte’s Art Finance Conference in 2019, highly ambitious claims about how blockchain could revolutionize and transform the art market were met with skepticism.

Many worried that blockchain could open the gates for forgeries, lead to inconsistencies in stored data, and cause scalability and performance issues, all of which could adversely impact the user experience.   

Deloitte’s Art Finance Conference

Even with a standardized and properly regulated approach in place, it is difficult to see how tracking provenance through blockchain could be effective with non-contemporary artworks. For example, paintings are often identified as the work of different artist years down the line. Others are sold under vague umbrellas, (‘From the School of Leonardo’, for example) while research is ongoing. The airtight nature of provenance-tracking on the blockchain does not currently allow for later changes, if any, and may, therefore, leave permanent inaccuracies related to such works.

Conclusion

From modern and cutting-edge blockchain art, tokenization, and decentralized property rights registries, blockchain technology is driving innovation in the space of art. Blockchain technology not only enables control of the distribution of digital assets but also records vital information about the Origin of the artworks, leaving no room for forgery and fraudulent activity, while making the market more accessible to investors from different walks of life. 2019 saw the implementation of projects on collecting digital artwork, decentralized art galleries, and the creation of multiple trading platforms. In 2020, we should expect an increase in both private and hopefully, government funding for large-scale blockchain projects involving the world’s leading museums and galleries.

REFERENCES 

  1. https://defiprime.com/cryptoart-on-ethereum
  2. https://www.juliusbaer.com/es/insights/digital-disruption/three-ways-blo ckchain-is-reshaping-the-art-world/
  3. https://www.artbasel.com/news/artists-as-cryptofinanciers–welcome-tothe-blockchain
  4. https://medium.com/datadriveninvestor/blockchain-for-art-what-everyon e-is-looking-forward-to-in-2019-4aa9a5231f5b
  5. https://www.forbes.com/sites/zoharelhanani/2018/12/17/how-blockchain
  6. -changed-the-art-world-in-2018/#ca431e930740 https://cointelegraph.com/news/painting-a-different-picture-how-digitalartists-use-blockchain

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