There has been a lot of talk lately concerning blockchain technology and the crypto sphere. In general, people associate it with finance, more precisely decentralised finance, cryptocurrencies and lately NFTs, without considering the massive impact that this technology can have in our societies, industries and economy. This is actually understandable, mainly because there’s very little information about blockchain in mainstream media. So, what is blockchain?
What is blockchain?
Blockchain is a digital method of storing information in such a way that it is tremendously challenging or impossible to alter, hack, or trick the system. It is, fundamentally, a digital record of transactions or information exchanges that is replicated and scattered throughout the blockchain’s complete network of computers. There is no centralised version of the information that a hacker may access or damage because it is hosted by countless computers at the same time. Yes, this means that a blockchain is actually deployed in the computers of users that, in exchange for value, store encrypted data.
A blockchain holds information in chunks known as blocks, which store sets of data. When a block’s storage capacity is reached, it is closed and connected to the previous full block, producing a data chain known as the blockchain. All new information that follows that newly added block is assembled into a newly formed block, which is then added to the chain once it is complete. A database typically organises its data into tables, but a blockchain, as the name suggests, organises its data into pieces (blocks) that are connected together. The real novelty here is that it ensures the accuracy and security of a data record and produces trust, without the requirement for a trusted third party. This means increasingly decentralised systems, where no single individual or organisation holds power, but rather all users keep control collectively.
How could blockchain be applied in art?
This is all fascinating, technologically wise. There’s now a way of making our system more democratic, safe and transparent. But, specifically, how does this impact a sector such as contemporary art? There are many ways in which blockchain technology can improve this market. For starters, it allows unique, unreplicable art to be digitally created and certified as such, through NFTs (we’ve talked about this in our article The Marriage of Art and Technology). New art means, undeniably, new collectors. Ones that might be less attracted to conventional art, but collectors nonetheless.
Blockchain also has multiple use cases in physical art. Its primary characteristic as a fragmented structure of public, decentralised collection of data that is connected and safeguarded through encryption, makes it the most secure method of transferring information. Applied to art, this means an incredibly efficient system to ensure authenticity and property of art, which is now a massive problem within the art market. The Fine Arts Expert Institute (FAEI) in Geneva revealed, in a 2014 research, that more than half of the artworks it reviewed were either counterfeit or not credited to its original author. The ability of blockchain to monitor and validate authenticity via timestamps on operations and cryptographic signatures, could really help to overcome this challenge.
Tokenizing artworks makes identifying the original indisputable, for it provides artists and collectors authority over valuation and property with a genuine and immutable public record. NFTs can successfully handle copyright infringement concerns, provide a trustworthy environment for collecting art, and reinforce artist retail rights. Artists’ retail rights are built into the code of NFTs and the blockchain, which means they can establish royalties and be commissioned every time their work is resold, taking a share of the massive revenues that are generated by art collectors, dealers and retailers on secondary sales. Moreover, and following the same principle, NFTs can allow art’s ownership to be fractionalized. This would make investment more accessible and no longer reserved to elites, while bringing a higher capitalisation to the market, which would result in more financial freedom for artists to create.
A shift in the industry
Besides having many specific use cases that we could continue on listing, the most important thing to understand is blockchain’s power to deeply change the art industry. By breaking its monopolies through the reduction of intermediaries, creating a transparent network of artists and stakeholders, and providing a safe ecosystem for transactions to occur, blockchain technology can really be the next massive step in bringing the power back to the artists.
Bridging the gap
For many artists, jumping into blockchain can seem to be a challenge. The technology is quite recent and some frictions might be created when it comes to adding it to a stable workflow. Our mission, in art2act, is to make sure today’s artists have access to all the tools they need in order to become financially independent through their art. Being deeply convinced that blockchain will empower them to unprecedented levels, we’re here to be the bridge or the partner artists need to walk through this digital revolution, without ever conditioning their work, their revenues and their creative freedom.