Tokenization Of Artwork

In 2018, something peculiar happened within the art industry. This point it wasn’t another controversial nude or a lost artwork recovered from the Nazi archives. In fact, it had nothing to try with the paint, brush or canvas. That year, a touch known startup called Maecenas introduced a revolutionary concept of tokenization to the industry involving blockchains and cryptocurrencies.

Until then, the art industry was notoriously archaic. The gavel and paddle method was used to sell artwork such as paintings, sculptures, and other art-related accessories.

The auctions, on the other hand, only allowed a small number of attendees and required that the bids be there in person.

Tokenization of artwork is still a relatively new field and the technology has yet to be widely adopted, but it has the potential to revolutionize the art market and open it up to a new set of investors and collectors. Tokenization also offers a better way of tracking the provenance of a piece of art, which can be of great importance and has been a pain point in the art industry for long. As the token is unique, irremovable and traceable on blockchain, it brings trust and transparency to the market. A Blockchain development company or Blockchain technology experts can provide blockchain development services such as artwork tokenization to securely and efficiently manage and track digital assets on the blockchain.

Furthermore, it was challenging to sell the artworks due to their exorbitant costs. What Maecenas did was to show the whole industry on its head. Sometime in September of 2018, the corporate marketed the seminal piece, “14 Small Electric Chairs” by American Pop Art pioneer, Warhol. At the time, this artwork was valued at $1.7 million and therefore the news of a blockchain-based sale attracted many investors, many of whom weren't previously related to the art industry. The eye garnered towards the painting helped improve its valuation to $5.6 million while the unconventional method of sale employed would definitely make Warhol proud.

When tokenizing an artwork, the subsequent steps take place.

  • Once a painting or sculpture is chosen for tokenization, an accredited curator will appraise the work and set its value.
  • Now, the concerned platform will convert the artwork into digital tokens and issue them to potential buyers.
  • The buyer can buy tokens for multiple artworks and make diverse portfolios.
  • The buyer also can prefer to sell or exchange the tokens.
  • Moreover, this act of ending the ownership of the artwork also meant the democratization of the art industry, which the closed doors of this sector were thrown hospitable a more modern and bigger investor network.

Advantages of art tokenization

The art tokenization lets the art piece be owned within the portion. The worth of the art is converted into digital tokens, which investors can own. It lets the smaller investors have the prospect to take a position in expensive art pieces and obtain the simplest value within the future. Tokenization makes the method of buying the art be treated as other investments, including land and shares.

Tokenization transforms the acquisition and sales of art pieces. It also boosts the art industry and witnesses the new world of investment within the upcoming years.

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Here is that the list of major benefits of art tokenization.

  • Fragmented ownership
  • Ease of worldwide access
  • Minimized costs
  • Offers huge opportunities for the small-time investors
  • A substantial amount of the liquidity
  • Elimination of potential risks and fraud
  • Removal of the physical challenges like climate
  • Enhanced security and need authentication via blockchain
  • Broadening community

Things to stay in mind

Before you opt to spend your money at the art market, you ought to realize the subsequent things.

  • Purchasing the art tokens is analogous in several ways to purchasing the shares. Art tokenization has the facility to vary art investment and buying. It’s like purchasing the shares during a company or other venture. It’s expected that the worth of these shares maximizes and renders the simplest return on your investment. Over time, the art value is increased, and thus, spend your fund without hesitation.
  • Tokenization is great for the investors who are involved the art world. Developing the token for the people to get isn't easier. It’s pretty overwhelming to form someone buy the token and utilize the precise platform. Due to this, investing within the art tokens becomes beneficial for the people that regularly participate within the art community.
  • Tokenization has the potential to open up investments within the art world, and thus investors will get plenty of opportunities. It’s extremely useful for artists and industry players. It also helps the museums to boost money without taking high-interest loans.

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What does the longer term hold?

According to Bloomberg, the worldwide art industry was valued at a whopping $63.7 billion in 2018. Experts predict that this sector will experience exponential growth within the coming years given the presence of bullish market trends. Blockchain and art tokenization will play a crucial role during this renaissance given the various advantages related to it.

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