ArTech | When Cryptocurrencies enter the art market
Gadget, artistic medium, marketing tool or actual disruptive force? Whatever they may be, cryptocurrencies have already made their presence felt within the art market…
Just what is a crypto currency?
Wikipedia has the commonly defined definition: “a cryptocurrency is a decentralized digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency”.
Cryptocurrencies constitute an alternative to traditional currencies, although no country has yet adopted them as their official medium of exchange: they are mostly born as the result of private initiatives. The use of cryptocurrencies is based on what is defined as a proof-of-work system, which makes forgery impossible.
When Cryptocurrencies invade the art market
Today, some three million people actively use cryptocurrencies. If bitcoin represents the 72% of this market, several other currencies have appeared over the last years, some of which can be exchanged with dollars. However, currency exchange is merely one aim of this new digital asset. Collectibles themselves are considered as currency: thus, websites such as BITPREMIER or Art4bitcoins allow their users to use their bitcoins to acquire collectible items, including, of course, works of art.
Other platforms go even further. Texas-based Cryptoart, for instance, offers artworks that also work as physical storages for Bitcoins through a process called cold storage. As per Cryptoart’s website, “each work is executed with the hope of adding to the narrative of the digital currency revolution.”
Mike O'Connor « THE NOISE » at Dadiani Fine Art.
In spite of their novelty, all these initiatives lack true aesthetic motives: they seem to only answer to a need to build wealth fast...
The art world’s fascination with cryptocurrencies
Certain art world personalities have already taken an interest in cryptocurrencies. In London, Dadiani Fine Art has become the city’s first gallery to accept bitcoins as means of payment. Beyond its alleged desire to work towards the democratization of the art market, the gallery — certainly not one of the art world’s powerhouses — has definitely benefitted from the boosted visibility that its openness to cryptocurrencies has provided.
Despite its moderate success, cryptocurrency remains a risky investment: the forward-looking Silicon Valley Contemporary — which launched in 2014 and hosted KM Fine Arts, a gallery that also accepted bitcoins — has only lasted one year. In a competitive art market, galleries and fairs have to try hard to gain notoriety; in the case of Silicon Valley Contemporary, the introduction of cryptocurrencies was not sufficient to attract a significant audience of collectors.
When art becomes cryptocurrency...
The creation of a cryptocurrency whose value is backed up by actual artworks is a much anticipated event. If the world of cryptocurrency is dynamic and volatile, the creation of a currency supported on tangible assets would become a means to boost currency diversification in a market of high-yield bonds.
For this reason, Eleesa Dadiani, founder of Dadiani Fine Art, has created its own currency — the Dadicoin (DDC) — which will launch in 2018. Whilst no further information is available, the value of the currency will most likely be backed up by the gallery’s artwork stock.
So far, cryptocurrencies have also been a means to bring together the true risk-takers of both the art and the tech world. Artists, for their part, have taken the opportunity to thumb their noses at this type of technology. With her BitchCoin, artist Sarah Meyohas, has turned cryptocurrencies into an integral part of the creative process. One BitchCoin, sold for $100, is worth 25 square inches of any one of Meyohas’ photographs. Following the purchase, buyers obtain an encrypted certificate which can be used to redeem the artwork at any given time. For Meyhoas, BitchCoin is a means to control the value of her own works.
Despite these first attempts at cracking cryptocurrencies, the art world and the world of bitcoins (et al.) remain both quite foggy in their own ways, and truly viable ways for the two to work together are yet to be found.
As of September 2017, the best is yet to come.