Tokenization of Art: Terms, Trends, Projects

Saviour by Leonardo Da Vinci: the most expensive painting ever sold

Why people don’t invest in art? 

To spot upcoming artists / to evaluate art not enough money, knowledge, time

Terms in tokenization of art

The blockchain based ownership of art is implemented through certificates of authenticity (COA).

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.

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.

Art tokenization platform: main functions 

  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. Internal communication (between token holders)
  7. External communication

Such platforms work are similar to a stocks trading platform. 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. 

Benefits

To peopleopens 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

Blockchain in art. Trends 2019

  1. More 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. Enter industrial blockchain based solutions to secure art identification and legacy. Companies build heavy-duty infrastructures, protocols, networks, and stand alone software for specific hardware. Most will focus on the technology surrounding authentication and interoperability.

Significant projects