A slew of stories have come out in recent months
claiming that the art world is about to be transformed by blockchain technology
– the underlying foundation of cryptocurrencies like Bitcoin. How will this
happen you wonder? Several ways are being proposed.
First, cryptocurrencies are supposedly going to
transform the art world when slews of younger, internet savvy buyers start
investing in digital artworks created by artists using blockchain technology as
their medium. We place the likelihood of this becoming a big thing at about
zero per cent. Second, groups of art collectors are starting to use blockchain
technology to purchase stakes in expensive artworks, similar to how multiple
buyers might own a stake in a single Bitcoin. This is a nice idea, but art
investment groups already exist, so it is not a novel solution to a problem.
There are, however, two ways cryptocurrencies
really might affect the art world. The first way is if art dealers start hiring
companies like Verisart, which use the decentralised digital ledger system
employed by cryptocurrencies to track and authenticate provenance; this trend
could all but eliminate art fraud. The other way would be if art dealers simply
start accepting payment in cryptocurrency. But this is risky, because the value
of cryptocurrency fluctuates wildly, and is solely based on speculation – conditions
with which the art world is already all too familiar.
Image courtesy of Verisart Instagram @verisart_