Blockchain is being leveraged in various industries today to address several challenges. From financial services to supply chain management and health tech, blockchain is growing in its adoption.
The fine arts world is also mirroring this trend and reaping the benefits through the use of Distributed Ledger Technology (DLT). It is helping the various stakeholders tackle, head-on, various long-standing issues impacting the fine arts world.
These include lack of transparency, copyright violations, ownership disputes, and tracing the origin of art. Blockchain's growing relevance in the context of art is transforming the way consumers purchase and own art and artists create and market art. It is also helping drive new opportunities for artists and buyers.
In this blog, we delve deeper into how blockchain in art is digitally transforming this world.
The global fine art industry driven by blockchain is expected to grow at an annual compound growth rate of 5% to reach a market value of $7.6 billion by 2028. With that in mind, let's understand the advantages of using blockchain in the art world.
Establishing the authenticity of artworks is a major challenge in the art market. This is a prerequisite before auction houses and buyers spend millions on artwork.
However, due diligence is a costly, time-consuming process. By integrating blockchain-based provenance recording, buyers can evaluate the authenticity of the artwork. For instance, a private chip or unique identifier can be stored on a physical artwork and used for authentification.
Every time an artwork changes hands, the ownership records can be updated on the blockchain. Each ledger works as a single source of truth, and records cannot be duplicated or altered without all stakeholders being instantly notified.
Ownership can be tracked right from the time the artwork is created to the latest sale.
Selling a piece of art is an extensive process, with many steps in the workflow. Maintaining transparency is a key challenge.
Blockchain ownership records of any artwork help all stakeholders - from the artist to the auction house and buyer. It helps track the evolution of artwork to any stakeholder with access to the information.
It is also possible to control public and private access, thus creating transparency for the entire cycle and helping protect the integrity of auction houses and art galleries that house artworks.
One of the biggest challenges for artists is that once they sell their artwork, they are not able to benefit from their hard work beyond the first sale.
The value of their artwork may continue to grow as it is resold in the market, yet, they do not benefit from this growth. This is where blockchain has the potential to transform this dynamic.
By maintaining a digital record of ownership transfer, the journey of the artwork can be tracked. This enables the artist to continue earning royalties every time the artwork is resold.
The definition of what is considered art has shifted with the rise of digital art. Today, even blockchain games and digital wall screens are considered digital art and can be sold for a hefty price.
Blockchain applications can certify high-quality digital art for the benefit of buying, thus ensuring authenticity, ownership, and quality.
By leveraging blockchain applications, artists and buyers can do away with the middlemen or intermediaries. This translates to more affordable artwork for buyers, and a hassle-free process for artists, with higher monetary gains.
Last but not least, buyers no longer only need to not using cash, credit cards, or digital payments. Consumers who are comfortable using cryptocurrency can purchase art by using cryptocurrency, their preferred mode of payment.
Several use cases are emerging of blockchain applications being successfully leveraged in the visual fine arts world. Here are some popular cases:
The increased adoption of blockchain applications in artwork by one individual now enables consumers to own a segment of artwork. This means that they no longer need to purchase entire artwork.
This is possible in the process of fine art tokenization. As the artwork sells for a profit, all the various owners benefit. This process enables more consumers to purchase art online without having very deep pockets.
The purchase of art was always considered a pursuit of the rich due to its lack of access to average consumers. However, the rise of art marketplaces via decentralized apps is disrupting the status quo.
These blockchain-enabled art exchanges are nudging more consumers to consider buying art as an investment or for aesthetic value by making the process accessible and hassle-free to transact.
Decentralized art marketplaces also tend to have lower overheads, unlike physical galleries. Hence, they can transfer the benefits to buyers and artists. Smart contracts help close transactions with credibility and proper ownership records.
Today, several creators are producing crypto collectibles, which come with unique markers. These are essentially non-fungible tokens (NFTs), i.e., distinguishable digital art with no physical element.
NFTs have captured the imagination of consumers and continue to grow in popularity. Each piece of the NFT is unique, and blockchain makes it easy to authenticate, trace ownership, buy, sell, and earn royalties for artists.
As we can see, artwork blockchain applications have the potential to benefit the key stakeholders in the art world - artists and buyers. Organizations looking to build products and services for the art world can have a competitive edge with early tech investments.
By partnering with a blockchain development specialist like Spydra, you can access the full stack of blockchain developer-friendly APIs, accompanied by hassle-free integration. Start a conversation with us today!
