Blockchain for artists: ownership and scarcity in a digital medium
The Internet has been blamed for all sorts of revenue loss when it comes to intellectual property, especially creative work. File sharing became a popular way to pirate content, and it got even more popular when we started torrenting - sharing content from multiple users at the same time. These distributed networks now are being used for the totally opposite purpose with blockchain technology.
If you haven’t heard of blockchain, you’ve certainly heard of bitcoin, a digital currency that relies upon that tech in order to function. Bitcoin is one of many cryptocurrencies that are becoming extremely popular as a safe way to make transactions online. Blockchain is a form of security designed to act as a ledger, recording transactions on a peer-to-peer network. Instead of using P2P to download a pirated movie, blockchain uses the network to record data across many systems. The data then can’t be altered, since it is checked against itself across the network. While currency has become the focus of the popular discussion, especially when bitcoin gained value rapidly in 2017, this secure system can be used for other applications, like identity management or any other record keeping.
That usage extends to artists working in any media, even digital, and prevents forgery and stealing. With traditional media, like paintings or sculptures, ownership is verified and logged. For digital work, blockchain makes it possible for there to be an original that is securely distinct from a reproduction - previously unimaginable.
Still a little hazy on the technical details? Jason Bailey of Artnome explained the subject very well in his coverage of purchasing a digital illustration from DADA.nyc. The artist was not only paid for his work, he could set the edition of copies and the piece Bailey purchased was denoted as number 89 of a series of 200. Bailey was recorded as the owner of the work and DADA.nyc received a commission. He can even resell the work, and with this technology, the artist continues to receive a portion of the resale value. All of this is kept in the blockchain ledger distributed to a network that mutually ensures that the data in consistent and uncorrupted. Pretty nifty!
This reimagining of digital economics makes transactions much more similar to their analog versions, which rely on scarcity. Since time immemorial, if you made a Thing, it was the only one of that Thing that existed. You could attribute value to it, and sell it as a physical object of value. Since intellectual property now exists digitally, it can be reproduced perfectly, making scarcity non-existent. Blockchain reinstates that scarcity in the form of confirmable identity and ownership. Bitcoins are limited to 21 million coins, to form an additional example, and their spike in popularity last year led them to become much more valuable. Bitcoin would not have gained this value if they could have been reproduced infinitely, like non-blockchain digital goods.
This concept is catching on with other applications, like CryptoKitties, one of the world’s first blockchain games. CryptoKitties are digital cats that are each unique, and securely ownable. Like many blockchain purchases, in order to participate you have to install a digital wallet extension on your browser, create a cryptocurrency account, and transfer real cash into it from your bank account.
Not only is CryptoKitties a fun way to learn about the mechanics of blockchain technology, it also demystifies it to the public. According to the news, the only reason you might need bitcoin or another cryptocurrency would be to pay a cyber terrorist ransom, or to buy illicit materials and bomb ingredients. That’s unfortunate, as the opportunities offered have real benefits for a group of people that are famous for their lack of funds: artists.
Attributing authorship, sharing the likeness of a work, and tracing ownership are all real-life boons for working artists that are promoting their work online. Services like ascribe or Verisart act like digital galleries, managing artists, and curating a marketplace that increases access for collectors, all with lower barriers-to-entry and commission fees.
Another gamechanger in the art industry that blockchain makes possible is confirmable shared ownership of artworks. For more expensive pieces, this can mean greater security against stolen pieces and forgeries, and that individuals can own a set percentage of an artwork. This increases the democratic potential even further. It means that multiple people can purchase an artwork together. Maecenas, a distributed art gallery according to its self description, is creating a platform for the public to do just this. If a gallery wants to acquire a multi-million dollar Warhol, to use its own example, Maecenas members acting as investors can contribute to the price of the artwork, avoiding the need for a loan at 13.5 percent interest that could run a gallery thousands more in additional costs.
Far from the public perception of blockchain, the technology currently in development could upend the art market. Artists could stand to make more money for their work, and always be able to trace who owns it. Collectors could make purchases knowing that their investments would retain their ownership integrity. A whole industry could be created of blockchain galleries and artist management. In these innovative ways, blockchain technology could be responsible for generating a more resilient art market for artists, art lovers, and investors alike.