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In the last 20 years, we have experienced a steady technological progress that has changed our daily lives. It was as part of this progress, and after the 2008 financial crisis, that blockchain technology emerged. Although at first it was simply associated with the advent of cryptocurrencies, over time it has proven to be applicable to many areas.

Now we know that it can revolutionize the art market and, in particular, the way art is bought and sold. It can also help to prevent fraud and tax evasion and mitigate the potential risks of an auction.

As Fast Company points out, there are many reasons why artists, buyers and investors, gallery owners and auction houses embrace the use of blockchain in this context.

First, artists are increasingly creating digital works, which are exposed to the possibility of being replicated and distributed without their consent. Being able to register their works via blockchain enables them not only to create a secondary market, but also to prove authorship.

As in any market, trust between the parties to a transaction is a must. Art buyers see art as a short- and long-term investment, as a type of currency. In this context, it is not surprising that collectors are reluctant to pay a large amount of money for a work whose provenance cannot be infallibly verified. This is the fear of not buying something authentic, a problem that is as old as art itself.

Against this, blockchain technology can implement a decentralized registry containing information about the authenticity and track history of most art objects in the market. Several startups (such as Codex and Verisart) offer artists, collectors, and galleries blockchain-based registration and certification services.

This could obviously boost the online art market, which is particularly interesting when considering that online art sales do not reach even 10% of worldwide sales. In addition, the annual volume of fraudulent transactions in the art market amounts to €6 million, 80% of which are linked to forgeries, according to the former head of Saatchi Online and Sedition Art.

Investors also regard as revolutionary the use and acquisition of cryptocurrencies to buy and sell shares in art works. Likewise, cryptocurrencies are also seen by auction houses as an alternative payment method that could make international transactions easier.

Autora: Ana Sánchez

This post is also available in: Español



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