In the past era of art, only a few selected could participate in buying or selling, but something started to change since the year 2018 with the rise of awareness in blockchains that allowed the tokenization of art.
With new technologies came new opportunities, and like any market, the art market didn’t miss the opportunity to start evolving, adopting the rising blockchains to reach more people.
The old art industry
Art has always been part in one way or another of the human race, and its monetization isn’t weird at all, with a value of approximately up to 50 billion U.S. Dollars. One of the main issues that we were facing was the transparency in what we consider art and who participate in it.
Only a few selected elites were participants in the access to acquire pieces of artwork. Just the paperwork and transport of a single piece could reach thousands of dollars, easily leaving out the big majority of people.
Another big problem for more traditional artworks is forgery, which can even trick art experts. A recent example is the case of the museum of Elne, France, in 2018 in where they discover that up to 60% of one of their collection was fake.
In such cases of criminal activity, you have to include the high necessity to have a face to face meeting, something that with Covid-19 isn’t making easier the transactions.
Normally one must go to a gallery or auction to acquire an artwork, but these places work in different standards to price a piece or make a transaction. Some even take advantage of the grey zones to sell under the radar.
This lack of standardization make difficult to have a transparency and is eroding further the industry.
Tokenization: an answer of art to the challenge
In the last years, there had been many changes in paradigms with the possibilities and reaches of what the blockchains represent and their benefits in our society.
Thinking about what they could represent for the art and its market, it isn’t strange that a merging between blockchains and the art market happen.
At the very first glance the idea to adapt the blockchains to art will cover and solve the following issues:
- An increase of transparency, with the creation of certificates and registers available for anyone to see.
- A bigger infrastructure that is more flexible allows the new and old artist to expose their works and an increase of buyers entering the market.
- With the improvement in liquidity, with the tokenization of art, more people have easier and better access to the market, increasing the inflow of money that is moved.
- Standardized prices, with a process more transparent and the work of blockchain based smart contracts, is making some steps automatized.
As an obvious result of the benefits, there has been an increase in demand for adopting blockchains in the art market. This growth has been making the legal institutions change and adapt. While it is still a growing process, it is definitely a tool that will change the traditional model.
A bridge for art and people
The tokenized art has indeed allowed new aficionados or investors to enter the world of art. Still, it needs work to do in improving the access of their customer target. Thanks to making the process easier and more transparent, the tokenization of art has improved people’s perception of trying to get works of art.
Another benefit of the art tokenization and fragmentation of an art piece’s price was thought to increase the liquidity in a high-end market. Allowing a new connection and removing a huge barrier was the pricing and acquisition of an art piece. With a new flow of consumers been injected into a stagnant market of few, it created a new hybrid of consumers.
On one side, we have the traditional consumer of art that values a physical piece, but its mastery in the crypto world may not be that in a level that it feels comfortable.
On the other side, we have a digital native or digital emerging with enough mastery to work in a crypto world using blockchain technology, but the art may not attach it to a physical piece.
I want to say it may look a little weird to mention these differences when trying to point out that tokenization of art will bring more people together like consumers. Still, it is important because we have identified that movement and evolution have begun with the option of participating in the market.
The tokenization of art and blockchains is indeed a revolutionary change in the art industry that will have exponential growth in the future, making us pioneers in the construction of this bridge.
The rise and creation of NFTs is a clear example that the bridge between people and art is getting better.