The art world has been going through hard times lately. The coronavirus pandemic has forced many galleries and museums to close, and luxury chip sales have also suffered.
But it could be the solution that will help the industry get back on its feet and achieve much-needed digitalization: blockchain. Here we speak with Niko Kipouros, Founder and CEO of 4ARTechnologies, about how this technology can change the way we buy and own art, and even guarantee unquestioned excellence and authenticity.
1. What are the biggest challenges facing the art industry right now?
The wave of the COVID-19 pandemic has devastated galleries and museums, and galleries, art galleries and auctions have been postponed or moved online. The art world has stopped. It immediately became clear that all players in the art market are vulnerable to the physical distance measures that were taken to slow the spread of the epidemic. If people are not allowed to leave their homes or attend major events, what will be left of the business models of exhibitions, art fairs and auctions?
Everyone in the industry now understands that the art market as we know it will never return. Digital tools can help us overcome the limitations of physical operations.
Can blockchain solve any of these problems? Does the art industry really need a blockchain?
Blockchain has opened up space in the current technical system. Blockchain brings unprecedented security and accountability to the art industry, as well as the introduction of decentralization at the institutional level.
Blockchain technology works in the field of art, providing decentralized and immutable storage of data and documents, as well as the automation of many day-to-day art management tasks.
Technology cannot do this alone, but it provides a reliable and documented information base upon which solutions and services can be built.
3. How does symbolic art work? Does this mean that an ordinary consumer can partially own a well-known masterpiece?
Encoding an asset – in our case a work of art – makes it available for digital sale and processing. A piece can be encoded in two different ways: either one token per artifact, or multiple tokens to allow partial ownership.
Alternative individual figurines are only suitable for art collectors and those looking to better manage the collection. Several art and finance groups are exploring creating more characters for a single piece of art.
The tension here is based on two important aspects. First, it allows great works of art to be made available earlier in the art market, which is especially beneficial for government agencies that are constantly short of funding.
The most interesting thing is that works of art can be owned by a large number of people thanks to blockchain-based coding, which makes the collection of art and works of art more accessible and democratic.
This digital framework also opens up entirely new ways of owning and enjoying art.
In our pilot project known as ARTCELS, token holders access and share a collection of avatars in the virtual reality showroom at 4ARTapp. We are seeing an increase in demand for these models and are confident that many future collectors will only have a set of art tokens – a purely hypothetical set.
Why do you have one piece of art on your wall when you can choose from the entire collection and have fun with it?
4. What else can be digitized when creating art?
The art industry is ready for digitization. Most of the business is still operating as it was 30, 40 or even 50 years ago.
Recording works of art, creating catalogs of artists, reporting status, updating or transferring documentation and tracking movements: all processes that are part of the supply chain in the art industry can be digitized.
As we have seen in response to the COVID-19 pandemic, even major international exhibitions can be digitized. The art world is in dire need, and only creative solutions await it.
5. What about cryptocurrencies? Are they part of this digitization?
Cryptocurrency offers qualities that art has always demanded in the global marketplace: fast peer-to-peer transactions, lack of attention to borders and minimal losses. It also addresses the issue of double amortization to facilitate pre-collateralized transactions with more complex and costly guarantee solutions. Or, you can create automated message forms for artists, creators, and communities to rebuild their efforts.