Top 3 Ways Blockchain Technology Can Improve and Transform the Art Industry
The number of blockchain-based solutions for the art industry has been increasing steadily of late. Similarly, leading companies within the industry have also been adopting the technology.
This is an indicator that the art industry is experiencing the blockchain revolution. Below are some of the ways that blockchain technology can be used in the art industry, along with the challenges and opportunities they present.
Tracking The Origin Of Artwork
Blockchain technology is renowned for its immutability. This means that all information regarding an artwork can be stored in an unalterable system. Nowadays, forgeries are a common occurrence in the art industry, but blockchain technology could be the solution to this problem.
The challenge, however, is the entry of falsified data onto a blockchain. The immutability aspect means that such data would be impossible to remove. As a result, there are concerns about the entry of data for physical artwork on blockchain registries. Therefore, the people who enter the data should be credible to avoid adverse implications.
Decentralization Of Art Investments
Blockchain-based art startups are offering fractional ownership of artwork to their users. This means that users can diversify their portfolios by purchasing several fractions of a variety of artworks.
However, the art industry has considerably lesser liquidity as compared to other sectors of the economy. This means that art investments have lower profit margins than other forms of investments. Moreover. Conservative investors are usually reluctant to invest in assets that they cannot have in their possession.
Access To Limited Edition Digital Artwork
Blockchain technology has made it possible to access limited editions of digital artwork that were previously inaccessible. Digital artists can now create limited editions of their works. This in itself is a means of earning income. Before the introduction of the blockchain, digital art was challenged by plagiarism and piracy.
According to Anne Bracegirdle, the associate VP and photography specialist at Christie’s, blockchain technology is the ideal solution to the security issues facing digital art. Anne believes the blockchain can create an all-encompassing ecosystem that tracks provenance, is decentralized and has an inbuilt payment platform. Anne also revealed that people are interested in digital art, pointing out that an artwork was sold for $140,000 earlier this year.
Christie’s Auction House has declared that the impending major sale of artworks is going to be recorded on the blockchain. While the adoption of blockchain in the art sector is still relatively low, the future looks promising!