Art: Is Blockchain the Way Forward?

From time immemorial, art has had a special place in human culture. It has served as a source of inspiration, supported us on our quest for spirituality, held records of cultural, societal, patriotic, and religious history, and brought a profound aesthetic pleasure to connoisseurs and amateurs alike. 

Sometimes, art would be a statement, demonstrating the piousness, sophistication, or wealth of the owner — and, for centuries, art collecting remained the prerogative of the ruling class who'd often commission the pieces.  

These days, art evokes feelings that help shape our identity, inspire innovation and empower forward-thinking societies. Collecting is not confined to elites anymore, thanks to the democratization of the art market. What's more, 2021 has brought us a significant breakthrough in the form of NFTs: unique digital tokens that have the power to bring over the new age of art collecting.

Challenges Faced by Art Collectors

The art collector’s game is not an easy one. First, the scale of the global art market is outstanding: more than 1.5 million artists are producing about 50 billion in market value annually. As a result, it is becoming increasingly difficult for any individual to keep up with the flow of new work being created.

Art forgery is another problem plaguing the art world. The 2014’s report by Switzerland’s Fine Art Expert Institute (FAEI) estimated that over 50% of art circulating on the market was either misattributed or forged. According to 2020’s reports from law enforcement officials in the United States and Europe, recent technological advancements in photomechanical reproduction and the growing popularity of online art sales have contributed to this problem. 

And last but not least, there are the matters of logistics and storage, as most pieces of art require careful transportation and reliable storage facilities. Art is a very demanding cargo, both in regards to documentation, security, and the fragility of most pieces. After all, the last thing any collector wants is for their prized possessions to be damaged by rough handling or inadequate storage conditions.

New Age Of Art Collecting

Through the digitization of artwork using non-fungibles and blockchain technology, transparency can be introduced to the art world, making the work of collecting art much easier and more affordable. Non-fungible tokens – basically, unique pieces of encrypted data – can be used as digital representations of any item in the physical or digital realm. Every distinct characteristic of a piece of art, such as details on the origins of the artwork, its creator and previous owners, and so on, can be programmed into the NFTs and stored on a distributed ledger with public access. 

Once a record on a blockchain is made, it remains immutable and tamper-proof, which solves documentation and forgery issues. This way, highly skilled (and paid) experts are not needed to authenticate artwork; anyone looking to verify the authenticity of the art piece only has to refer to the corresponding record in the ledger. 

While digitization is quite useless when it comes to flaws of physical storage, it can solve some of the logistics issues by providing easy access to the documentation on the piece. Besides that, we’re now witnessing a global shift in art collection trends, as more and more collectors are choosing to invest in virtual pieces over traditional ones, eliminating most storage problems altogether. 

The market on the whole is winning from the new trends, too. Largely due to the meteoric growth of the non-fungible market in 2021, NFT marketplaces such as OpenSea and Rarible have connected thousands of art creators, sellers, and buyers. As the artists are getting more exposure, collectors get to keep easy track of new trends and pieces, enjoying a supply that is more diverse than ever. 

Is Blockchin the Way Forward?

Throughout 2021, quite a large number of contemporary artists, Banksy, ArinaBB Mad Dog Jones, Pak, and Beeple among them, have embraced the power of NFTs. No wonder their number is growing by the week: artists are enjoying new opportunities to market their work to a global audience and new, at times multi-million, revenue streams. Collectors, in their turn, get access to a worldwide pool of talent with tools that enable easy verification and authentication of original art.

In my opinion, over the next year, the trend for digitization of the art industry will continue. We will see more artist create their own NFTs, as well as the emergence of new talents in the digital space. And, even though we are still at least a few years from mass adoption, NFTs and blockchain are enabling us to create a vast decentralized network bringing together collectors, artists, buyers, and sellers, protecting their interests and thereby reducing friction in the market.