How Blockchain Can Redefine The Art Industry In The Digital Era
Dr Nitin Upadhyay
In the creative global economy, artists face a lot of troubles and complexities in generating the right value propositions while dealing with their artworks. The art market place is estimated to have an annual transaction worth USD 70 billion. Many artists complain about forgery, transaction frictions, interaction frictions, and market place turbulence. Moreover, intermediaries like YouTube, Spotify and art galleries insert themselves into the value chain of the artists and their audience, leaving the creator of the artworks having no control over the true value. Blockchain is disrupting technology and hold promises to redefine the value propositions. A global research firm predicts the market size of blockchain to go beyond USD 60 billion by 2024. Blockchain gained attraction due to the Bitcoin leading to the current market capitalization of Bitcoin as USD 144 billion. However, the Bitcoin is just one of many uses cases of the blockchain and the technology holds immense potential to disrupt marketplace and industries.
Artwork not only defines an individual’s journey, experiences and observations but also the history and culture of the community and society. It has been estimated that around 10-20 percent of the artworks are being forged or misattributed. Further, in the digital environment, it has become unmanageable to control the copying and plagiarism of the artwork. And this is not the only case, the intermediaries take the bigger pie of the sales from the artwork by introducing the transaction frictions and information asymmetry.
Blockchain provides five disruptive forces as capabilities to redefine the art industry:
The artists can achieve transparency of the transactions by removing the interaction asymmetry and interaction frictions. Peer-to-peer network based on trust consensus mechanisms facilitates the transparency of the transaction. The auction galleries, agents or applications like YouTube, Spotify will no longer be part of the process of the value system as the transaction now can happen between the participating parties directly. Services like Ascribe.io provides attributed and assigned ownership identification of the artwork.
– Reputation system
Artists can co-create the reputation system which can define the brand and reputation for the artwork and the artists. Such a system, help producer and consumer of the artwork to verify and validate the artwork and encourage cooperative terms in co-existing space.
– Micro metering and micro monetization
By redefining the smallest consumable creative art unit one can transform the creative art economy, for example, a few seconds of a creative song in the advertisement. The smallest unit of the art piece could be traded by crypto tokens which will help consumers and marketers not to purchase unneeded parts of the artwork. The creative artwork can be mispriced and artists can get the benefit by utilizing the dynamic pricing mechanism. Even for the smallest unit of consumable artwork, an artist can set the dynamic pricings considering the supply and demand.
– Code of contracts:
Smart contracts are the executable codes and can be enforced on the participating parties based on the pre-set contract rules. The artists can redefine the digital rights and revenue models. The ownership and transfer of digital rights could be tracked easily with the help of tokens. Moreover, royalties con be configured as per the rules of an inclusive approach and the creators of the artwork get the fair deal. PeerTracks is a service based on blockchain which helps artists to get immediate royalty and ownership of their artwork.
The consumers and producers of the artwork can take an informed decision about buying or selling it by considering its provenance. It is now possible for the participating parties to leverage immutability nature of the timestamped content to get to know the origin, custody, and ownership of the artwork.
To establish a blockchain-enabled art ecosystem, we need to answer the question, “Are we ready to embrace the blockchain capabilities for
DISCLAIMER : Views expressed above are the author’s own.