The Art Market: The New Kid on the Block[chain]

Whether it impacts the way art is made, displayed or sold, technology is changing the game in the art world. One example of particular interest is the implementation of blockchain into the art market and how key industry players are adapting.

Buyers are typically faced with two major questions when purchasing art: is it real and does the current owner have the authority to sell it? Due to the confidential nature of the art world, sometimes answering these questions can be tricky. Blockchain’s ability to act as a digitized ledger, tracking and time stamping all previous and future transactions relating to a single artwork, may provide the answers to both of these questions and relieve hesitant buyers.

Simon Denny (b. 1982) Blockchain Future State Fintech Gamer Case Mod Deal Toy: 21 Application Programming Interface (API) Marketplace (2016) / Image courtesy of the artist and Petzel, New York

Christie’s paved the way in exploring blockchain at their inaugural Art + Tech Summit in 2018. Since then, they have become the first global auction house to implement the use of blockchain in an auction. That same year, the house joined forces with Artory, a blockchain-based art registry service. By doing so, interested buyers could log onto their database and view a complete transactional history of all works featured before the sale. Once sold, the new sale record is then added to the registry and the buyer is provided with a digital certificate of the transaction. In 2022, the auction house took one step further and launched a new platform dubbed ‘Christie’s 3.0,’ their in-house platform developed to facilitate non-fungible token (NFT) sales on the Ethereum blockchain network from start to finish. 

In the last few years, we have seen an increased number of blockchain-based companies dedicated specifically to the needs of the art world. Art Basel’s parent company, LUMA Foundation, recently funded one such company dubbed Arcual. Similar to Artory, Arcual uses blockchain to digitize smart contracts for artists, galleries, museums, and collectors. This includes tracking provenance and sales agreements, allocating artist royalties, and issuing digital certificates of authenticity. Other blockchain-based startups such as Maecenas Fine Art focus on the removal of intermediaries in the sale of an artwork. This way, artists can create an inventory of their works and buyers can purchase them in fragments ultimately lowering the overhead costs and creating greater transparency in the sales process.

Beeple (b. 1981) Everydays: the First 5000 Days, Non-fungible token (jpg) 21,069 x 21,069 pixels (319,168,313 bytes). Minted on 16 February 2021. Sold for $69,346,250 at Christie’s / Christie’s Images Ltd. 2021

Many artists are also incorporating blockchain into their practice, which can range from digital art to physical artworks exploring blockchain as subject matter. Simon Denny, a New Zealand artist based in Berlin, has been exploring the relationship between art and technology throughout his practice. In much of his work, he often attempts to give physical shape to formless occurrences, such as blockchain and Bitcoin. Other artists are creating digital artworks that are logged into a blockchain-based network, such as Ethereum. A popular example known as CryptoKitties is one where buyers can buy, collect, and breed various types of virtual cats. These types of artworks are also gaining traction in the for-profit art space. In 2021, Christie’s successfully sold the first digital-only artwork on the secondary market for $69 million (Beeple’s Everydays: the First 5000 Days).

Many leading experts have heavily debated the effects blockchain may have on the industry. Those who argue against its use claim to have issues with the potential threat of theft, privacy, and the purity of stored data. Those in favour claim it to be a solution to data inconsistencies which in turn could foster a more transparent marketplace for new buyers and investors, who may feel more secure to participate. Will blockchain prevail? It seems that the jury is still out! 

Noelle Martin, Art Salon Manager, Guest Contributor

Banner Image (detail): An AI-generated image that was given the prompt (by Beeple) “a mechanical dove by Beeple, low camera angle, cute aesthetic, pastel, high octane render, glossy textures, 8K, trending on artstation, –ar 5:7 –uplight”, July 2022

February 2024