Blockchain, tokens and art: a brilliant symbiosis 2020

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The current market of art finds more and more use of digital technologies, and blockchain tokens, which open up new opportunities for players in this field. These innovations become the basis for the technological development of the entire industry. For example, the blockchain helps to solve key problems in this market concerning the origin of art objects, work with copyright and authenticity of works. As all this is happening and what awaits us in 2020 — versed DeCenter.

Today the global art market is estimated at $67.4 billion And traditionally, funds received from sales of the paintings — is that supports the work of their authors. However, as the history of art and an impressive number of biographies, a considerable number of artists had to fight very modest in material terms life. Interestingly, this trend can clearly be seen still. So, much of the money pie in this area accounts for a small percentage of artists: in 2019, 63% of all global sales of the paintings had the works of all three authors.

NFT for authors of works of art

The emergence of digital technology in the arts was only a matter of time. Today, any artist can become the Issuer of a private token which will be a tool to attract funding. Ownership of the picture can for example be divided into several digital «parts», each of which can represent unique, non-fungible token (Non-Fungible Token — NFT). At the same time, the blockchain allows us to trace all transactions made with the asset that ensures a high level of protection against counterfeiting.

For the first time the Protocol NFT appeared in the Ethereum blockchain in 2017 and later was implemented in CryptoKitties format token standard ERC721. The same purpose can be used as tokens standards ERC20, ERC998, ERC1155 (partially have the characteristics of NFT), it is speaking of those digital assets that can be run on the basis of Ethereum. Moreover, from 2017 appeared a number of platforms for the treatment of NFT-assets: Portion, Superrare, R. A. R. E., the Open Sea. And tokens for the ecosystem digital art now can be run on different blockchains, not just for Ethereum. For example, in networks VeChainon Minter, and blockchain-network Minter is interesting because it provides absolute liquidity to all types of the tokens that it produces.

With regard to the participants of the infrastructure of digital art in the blockchain, they are becoming more and more. For example, last year was running a beta version of a niche social network Cent with an integrated system of micropayments, in which he discussed works of digital art.

The benefits of decentralized market for digital art

The use of tokens, in particular the NFT, and the integration of the blockchain allows artists to:

 To ensure the authenticity of works of art. According to research by Deloitte, the problem of authentication of cultural artefacts that bothers only the main stakeholders of this sector. In this connection, the market already has specialized blackany (e.g. Artory), focused on ensuring the authentication of works of art.

 Record all transactions in the blockchain, including contracts with galleries and museums.

 To direct listing for selling not only the rights of ownership to their works, but also to organize the payment of royalties when the paintings on the secondary market of works of art (that is, each transaction of purchase and sale) and also get the income from the exhibition of these artifacts.

 To be interested in circulation of the tokens that will go up in price, and for a variety of reasons: as a result of their limitations in emissions and growth in demand for works of art (classical and digital).

 If you wish to get direct access to the «consumers» of their works of art and interact with them directly, which will allow you to focus on their requests and to resolve business issues without intermediaries.

 Be sure that all information on the work of art will not be lost even in case of failure of the Internet in a number of countries.

 To tokenservice works of art of any complexity, starting with new gifs or emoticons, to complex digital artifacts.

 To use the online market for the trade in art objects: this segment accounts for only 7% of commercial activity in this field, or just $4.64 billion, according to confirmed for 2018.

 To earn significant money. Already there are examples when digital art was sold for $1 million.

 To create a blockchain copies of their works that, for example, proposes a project MakersPlace, providing the ability to monetize works of art that are placed in the social network Pinterest.

 Use the opportunity when art lovers want to buy (not rent) the ownership of the artistic work of art for some time.

Two of the incentive to create digital art

Unlike traditional art, which can often be represented as a static image on canvas in frame, digital already for the most part has the copy posted on the Internet. The creators of classic works of art are now in a situation when anyone can use a camera or smartphone with a good camera to copy their creations.

However, such unauthorized copying of digital pictures does not give the desired result, because their makers can use innovative technologies such as artificial intelligence (AI). So, in October of last year on the new York Christie’s auction for $432 500 was sold painting «Portrait of Edmond Bellamy» created using AI. Moreover, another exampleof such digital art showsthat the price of a facility can greatly increase in April 2018 it was $80, then in September of the same year was $310, 1 Jan 2020 — $3614, and January 18 — $12 909.

The second incentive lies in the fact that the holders of cryptocurrencies in General are more willing to spend their tokens, for example, to charity than the owners of Fiat. Understanding of what tokens go directly to the author of any artistic work, and not some intermediaries, is a powerful stimulus for effective work of such a channel of financial support to digital art.

Millions of dollars — in infrastructure of digital art

Those market participants who want to focus on creating the infrastructure for digital art, you can count on the favor of investors. So, in April of 2019 Artory startup has attracted $7.3 million investment. One of the advantages for investors is that Artory and the world famous Christie’s auction have agreed on a partnership to use the blockchain for data storage and to fix the issue of documents certifying the purchase of promotional products. In addition, Artory showed himself as an active participant in M&A, purchasing a platform of Auction Club, which has a customer database of over 4000 international auction houses.

In the same niche that Artory, working and Verisart, which drew in October 2019 $2.5 million investment. If Artory has its own blockchain, then Verisart uses the Bitcoin network. As Artory, Verisart shows that the blockchain technology used in this sphere: startup managed to establish cooperation with several important actors in this sphere — eBay Art Systems and the Design and Artists Copyright Society (DACS).

Development trends for 2020

What will happen to the market for digital art in 2020?

 More investment in projects that will create the infrastructure for ecosystems of digital art, in which many projects interact with each other.

 There will be a parish in this area of well-known brands, and from other sectors of the economy (for example, Christie’s supported Hyundai organized in June 2019 thematic summit).

 Digital art will be more «absorb» a variety of new technologies: especially popular ones, after the blockchain and tokenization, will be AI.

 Digital artifacts will occupy more space in the classic expositions of works of art.

 The community around this ecosystem will be actively developed, continuing to cause positive feedback.

 Works of digital art will be all the more so as a feature of creative work in this area suggests the possibility of decentralized work teams in which there are representatives from different countries.

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