The transition from Arte & Blockchain to Arte & NFT

It is 2016 when we start talking about Art & Blockchain at the first conferences on the subject, where the prospects for applying this new technology to Art were all in the making. 

Thanks to the great hype of the moment on the Blockchain, the insiders and some startups, including our Italian Art Rights , have investigated the concrete application of technology to the world of “physical” and traditional art.

Some events in particular in 2018, such as the Deloitte Art & Finance in Luxembourg and the Christie’s Art + Tech Summit were strong points to identify what are still the three main uses of the Blockchain for the world of Art : the Tokenization of a work art, the Certification of Digital Art and finally the use as a Business Art Solution.

When we talk about the tokenization of a work, we refer to the possibility of securitizing an asset in several parts – be it physical or digital – thanks to the use of connected smart contracts, which regulate the rights of use, possession or commercial exploitation for share part.

There are numerous platforms that have tried over time to apply this condition to physical works, one above all Maecenas , trying to assimilate investment dynamics typical of the Stock Exchange and financial markets to assets linked to the world of art.

However, to date, none has managed to emerge successfully due to problems related to the liquidity of the Second Market ( sales subsequent to the first), i.e. the difficulty of reselling the shares in the short term and therefore creating a profit, with a considerable problem linked to low numbers of supply and demand.

Separate consideration deserves the management of the physical asset and therefore the verification of its authenticity, the attribution of the economic value and the conservation of the same which was often attributed to private owners of 60% of the shares.

Together with this and more generally, the lack of security derived from the proposing platforms which were often immature undercapitalized startups and poorly structured in the management of the long term.

Another line of application of the Blockchain becomes that of the Certification of the Authenticity, or ownership, of a work of Digital Art, for which this technology is ideally perfect. 

In fact, if on the one hand it offers the transparency of distributed databases, on the other it allows the association, even cryptographic or shared, of a digital file to a smart contract including the now famous NFT (Non Fungible Token), but not only, we also think of the DAO (Decentralized Autonomous Organization) and other applications related to the time validation called “Timestamp”.

If until a few years ago the solution encountered some obstacles, mainly linked to a low value of the Digital Art market, after the explosion of the NFT market and more generally of Collectibles first and Crypto Art after, the attention of artists and practitioners of the traditional art market true the Blockchain has rapidly risen.

The latest application for this decentralized technology is that of Art Business Solution with the aim of regulating, tracing, enhancing and validating the economic transactions between the protagonists and professionals of the sector in favor of Due Diligence and Provenance, for insurance, transport, handling, use and sale of works of art.

The Blockchain can therefore be used as a binding, tracing and sometimes regulating technology of a market, that of Art Services, which is worth about 20 billion dollars globally , in addition to the trading market which is equal to about 50.1 billions of dollars according to the latest Art Basel Global Market Report 2021 , all in favor of authenticity and trust in the market.

Companies such as Artory , Verisart and Art Rights are among the few that today have created a concrete network of users between physical and digital, in particular Art Rights, of the Italian startup Art Backers, which today includes thousands of users and works (physical and digital ) which are certified daily with the possibility of interacting with a community of Artists, Collectors, Gallerists and professionals, based entirely on the certificates of authenticity registered in the Blockchain.

If before, on the part of the operators in the sector, there was a mistrust and a more general and typical reluctance to change, with the pandemic in progress, the lost physicality and the need to resort to online, they were forced to think of a new “Arte Post Coronavirus” , in particular after the baptism of Christie’s and the sale for over 69 million dollars of the work “Everydays: the first 5000 days” by the artist Beeple , everything has changed.

Today we no longer talk about Blockchain, technology, how it works or the doubts related to it, today we only talk about NFT and how to be part of this world.

The sale of 11 March 2021 has decreed the removal of the technological entry barriers by the sector which, feeling validated and reassured first by Christie’s, then by Phillips and finally by Sotheby’s, and now by many other artists and gatekeepers in the sector in these months they find themselves involved in discussing art and NFT on a daily basis.

This is the role of innovation for art, where a trigger causes a technology or its use in a particular sector to become disruptive.

All this is part of the game, but the most interesting thing is that what has happened to date with NFTs has nothing to do with the canonical world of art: they were consolidated dynamics of the Crypto world.

Now is the time to speak and write the history and rules related to Art & NFT!

Article originally appeared in the DeFi Today newsletter .

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