Tokenization of Art in Brief: why, why not, how exactly + useful links

Why people don’t invest in art?

  1. Not enough money

  2. Not enough knowledge

  3. Not enough time

to spot upcoming artists / to evaluate art

Picasso, $17M

How it works

1) Fractional ownership: tokens of one or several piece of art, or an artist, or a group of artists, or of a gallery/museum oare issued through a blockchain based platform.

2) The blockchain based ownership of art is implemented through introduction of certificates of authenticity (COA) – optional!!
The mechanics behind the COA is simple. It’s a small, tamper-evident seal that can inconspicuously be attached to a work of art. Since the COA is smart — connected with IoT technology — it’s able to connect to a blockchain. So once the certificate has been affixed to artwork and the piece has been registered to our blockchain, the physical-digital link is in effect.
The metadata stored by the NFC chip inside the seal is permanently saved and cannot be altered. Geolocation is part of the metadata, against theft. A small antenna inside the NFC chip signals to the issuer if someone attempts to tamper with the seal.

Monet, $35,5M

3) The main functionalities of an art tokenization platform are:

  1. Issuance

  2. Record of token owners and of ownership

  3. Trading/transfer of tokens

  4. Voting

  5. Distribution of profit / Call for more funds

  6. Communication between token holders

  7. External communication

It works pretty much like a trading platform for stocks.
The main functionality is that through the platform a group of investors can buy a piece of art together.
The goal is return on investment.

Challenges

To issue tokens is not that difficult, the difficult part is to get people to buy them. Hence, so far most projects target online art communities. Successful projects partner with artists people care about and enjoy following.

What it gives

To people – it opens up for investments

To artistscrowdfunding

To museums/galleries/art institutions – 1) to raise money without high interest loans 2) to sell shares in art they own


Kandinski, $41.8M

Blockchain in art. Trends 2019

  1. More individual projects in tokenization of art: tokenization in order to sell a painting or tokenization of an artist. Fun projects target millennial investors. Buy a piece of real Rembrandt for a tenner. Support a favourite artist and make money on it. Like a videogame.

  2. More user-friendly applications for professionals (blockchain under the hood); for a wide audience: an app to invest in art, like Tinder (invest to the right, don’t invest to the left), quick, impromptu, small investments; gamifications.

  3. Big industrial blockchain solutions to secure art identification and legacy. This third area will encompass companies that are building heavy-duty infrastructures, like the protocols, networks, and different kinds of software and hardware that are necessary for blockchain implementation. Much of this infrastructure will focus on the technology surrounding authentication and interoperability.

Existing projects and Useful Links

www.maecenas.co

www.rareart.io

https://blockchainartcollective.com

https://www.blockchainappfactory.com/art-tokenization

https://youtu.be/0tRND6cLCWA

https://fresco.work

https://www.snark.art

https://www.thearttoken.com

https://www.forbes.com/sites/rachelwolfson/2018/12/12/blockchains-impact-on-the-billion-dollar-art-market-debated-during-miami-art-week/#2012473c239a

“Blockchain Technology set to Disrupt the Fine Art Industry” by CryptoHype https://link.medium.com/KBi06qMsBT