Blockchain: A miracle for the Art Market?

Crypto

Do you trust the art market ?


Today the art market represents more than 14.58 billion euros in transactions. Most works of art have an extrinsic value, which is mainly based on the certificate of authenticity provided by third parties: the artist himself, but also gallery owners, art dealers, auctioneers, museum curators, and private experts. However, according to Bloomberg, nearly 10% of the value of transactions on the art market comes from forgeries.

Fortunately, Blockchain innovations are now emerging to guarantee the value of acquisitions in art, and thus restore the confidence of investors and enthusiasts. Gone are the days of an opaque art market reserved for a minority, the Blockchain creates a traceable and unchanging record of each transaction made for everyone.

Authenticity, provenance and transparency. These are the three promises that Blockchain makes to the art market. The principle is to link an existing piece of art to a cryptographic signature protected by a digital security seal. The certificate of authenticity is therefore issued in a single copy that cannot be falsified and can be transmitted without alteration. Coupled with a timestamp recording the transactions of the work, each buyer can verify the origin and authenticity of his acquisition himself.


This tokenization of authenticity certification also allows more flexible metadata handling: the addition of metadata (data about data) is thus made possible for the Colored Coin already issued. For example, information such as the model posing for a painting or the origin of the pigments, which was not known before the Colored Coin of the work was issued, can be linked to it latter. Furthermore, metadata is stored in publicly available torrent files, only a reference is stored directly on the blockchain. This allows modification, updates, and corrections. This way, an array whose creation year is modified will see the data of the Colored Coin attached to it modified.

Finally, the addition of Smart Contracts in the colored corners makes it possible to automate certain processes in art exchange: automatic indexation of the value of the work, the start and end date of a loan of a paintwork between two museums during a permanent exhibition, the sale and return of profits to a charity in the event of the owner's death, or the temporality of a digital work that would be destroyed at the end of the planned period.


A growth opportunity for digital art?


Thanks to this same process, digital Fine art is also protected against copying and piracy. The artwork, digital but real is linked to a digital property right called "Colored Coin" issued on the Blockchain Bitcoin and conservable in a wallet. This Colored Coin is therefore a non-fungible token, it can be exchanged or redeemed in the same way as any crypto-active, but at the same time transfers the ownership of the piece registered on the Colored Coin.


Art as an investment is also disrupted by the opportunities created by Blockchain technology. Piece of art, considered as investment products (market-dependent value, value reserve, tax deductions...) attract more and more investors, in an environment that is open to the general public.

Whereas previously several thousand euros were necessary to acquire a piece of art, today everyone can be the proud owner of a quarter of Giacometti, or a thousandth of a Picasso.

Last June, the startup Blockchain Maecenas in collaboration with the Dadiani Art Gallery tokenized 31.5% of Andy Warhol's 14 Small Electric Chairs canvas. Nearly 1.7 million euros were raised by more than 800 buyers who jostled each other on the platform thanks to auctions launched in crypto-active: Bitcoin (BTC), Ethereum (ETH) or ink the ART token developed by Maecenas. The purchase act consists of a cryptographic signature of the work of art (authenticated and provided with a security seal), combined with the identity of the buyers; it is time-stamped and recorded on the Blockchain created by Maecenas.


This once opaque art market, once reserved for a minority, is now open to the general public, both enthusiasts and investors. If some governments are still slow to implement these new technologies into their processes, art is keeping up with it.

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