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Picture the scene… You walk into the most famous art gallery in the world, the Musée du Louvre in Paris, and there, Leonardo da Vinci’s “Mona Lisa” is staring straight at you in all of its glory. It’s a stunning sight to behold – perhaps the most iconic masterpiece the world has ever known. Only in your wildest dreams could you possibly envision it as yours, hanging in your living room.
It’s simply not going to happen, and that’s the sad thing with art. It’s an extremely exclusive world, where multi-million dollar price tags limit access to only the wealthiest of investors, and as a result the world’s most renowned artworks and cultural treasures can only be seen by a lucky few.
Luxury fine art is accompanied with eye-watering costs and opaque processes. Even if you did have the cash, how do you go about buying a priceless masterpiece? It’s not like the galleries that own them are accepting bids. But this exclusivity may not always be so, for access to the art world is now opening up. Similar to how the internet transformed the way we share information, blockchain is changing the way art is bought, sold and owned.
It could be argued that tokenization represents a form of artistic expression, because it can be considered as a masterpiece of innovation in its own right. With tokenization comes the opportunity for everyone to own a fractional share of the most prized artistic treasures. It brings luxury art to an audience that was previously beyond reach, opening the door to a new class of investors and a more inclusive future where appreciation can be shared on a global stage.
Tokenizing Art
Tokenization of art is all about democratization. It refers to the process in which ownership of masterpieces is recorded on blockchains, the innovative digital ledgers that power cryptocurrencies. Simply take a work of art and link it to thousands of digital tokens that live on the blockchain. These tokens each represent a single share in the ownership of the piece they’re linked to, and they can be traded individually on a decentralized marketplace, making ownership more affordable and accessible to all.
These digital assets ensure secure and transparent ownership, allowing collectors to own a small piece of exclusive luxury artworks they could never afford to buy outright. The tokens are scarce, with each one holding intrinsic value, and sometimes even bestowing the holder with voting rights, so they can decide along with the community on where it’s exhibited.
The Beauty Of Fractional Ownership
Fractional ownership promises to make the art market much more accessible and attractive, creating possibilities for almost anyone to invest in renowned masterpieces. Individuals who couldn’t possibly afford to own a Da Vinci or a Michaelangelo could one day buy and sell tokens that represent a small stake in those pictures. The secret sauce here is blockchain, the transparent and immutable ledger that helps to prove authenticity and secure ownership. The blockchain enables these tokens to be traded efficiently, in a peer-to-peer way, without any censorship and without needing to pay off intermediaries, meaning lower costs.
One of the most compelling things about fractional ownership is how it can unleash more liquidity in the art market. Traditionally, art has always been highly illiquid. You can’t simply dispose of a luxury masterpiece by listing it on eBay. Very few people can afford to buy it, so most artworks are sold via auction houses. They take time to sound out prospective buyers, and the process can take weeks or even months. Once the sale is complete, the auctioneer will inevitably take a significant cut of the price.
With tokenization, the art trade becomes similar to buying and selling stocks and shares, with transactions being processed online, and instantly. The lower costs bring more capital from new investors, and the resulting liquidity benefits the market, increasing the value and visibility of the assets being traded.
Tokenized Treasures
Art tokenization is not just some promising concept. It’s happening now, and already there are a number of exclusive artworks being traded as digital tokens on the blockchain. For instance, do you fancy becoming the owner of Renaissance master Raffaello’s recently rediscovered “Recto: Study for the Battle of the Milvian Bridge”?
Well, you can, simply by heading to the Gleec BTC Exchange or Mandala Exchange and buying Raphael Coin (RAPH), which uniquely paves the way for the public to access an authenticated slice of historically significant fine art. The RAPH token makes it possible for anyone to contribute to the preservation and appreciation of one of the most stunning masterpieces from the Renaissance era.
RAPH marries cultural significance with secure and transparent, blockchain-based ownership, running on infrastructure provided by Gleec, the creator of a regulated fintech ecosystem that includes its centralized exchange platform. Gleec offers services such as Gleec DEX, for secure decentralized trading, and Gleec Pay and Gleec Card, enabling users to spend their crypto in the real world. The fully regulated nature of its infrastructure makes it a trustworthy platform for projects such as Raphael Coin.
Other blockchain-based artworks include Picasso’s 1964 masterpiece “Fillette au béret”, whose legal ownership rights were tokenized by a company called Sygnum in 2021. The painting was represented by 4,000 exclusive tokens, which were sold to more than 50 investors, priced at 1,000 Swiss francs, or around $1,040, raking in combined sales of more than $4.16 million.
Sygnum took advantage of Switzerland’s crypto-friendly Distributed Ledger Technology (DLT) Act, which allows for the creation of a financial shell company that verifies the link between a physical asset and its representative digital token, ensuring legal ownership in Swiss law.
Damien Hirst’s “The Currency” is an example of how modern artists can take advantage of tokenization in a more distinct way. In an experimental project, the living legend Hirst created 10,000 unique hand-made spot paintings, with each one being linked to one of 10,000 individual NFTs. When they were sold, Hirst gave buyers a choice – either they can keep the physical painting and the NFT is “burned”, or else the original is trashed and they can keep the NFT that represents it. They could only choose one or the other, but not both – highlighting how tokenization itself can inspire new avenues for artistic expression.
Expanding Horizons
There’s a lot to be said about tokenized art and it’s not just about investing. Undoubtedly, tokenized art provides a great way for investors to diversify their portfolios beyond stocks, commodities and real estate, and acquire an asset that historically always increases in value.
But there’s a lot more to it. Tokenization is an excellent way for artists to engage with their audiences in a way that’s forward-thinking and innovative, attracting a tech-savvy demographic with the opportunity for exclusive access. It also breaks down geographic barriers, making art easier to sell, and creating opportunities for international collaboration without the logistical problems created by physically transporting valuable artworks across borders.
The art trade also becomes more secure. Blockchain security is rock-solid due to its immutability and transparency, which enables anyone to verify that the person who claims to own a token really does own it. This can help to reduce the risk of fraud, which is quite common in the art world, and appeals to investors who prioritize trust and security.
Another potential benefit of the tokenization of art is that it may help brands to boost their reputations. For instance, a company such as Coca Cola could invest in tokenized art to accumulate “social capital” and position itself as a patron of the arts, helping to secure historically significant masterpieces and ensure they can be appreciated by everyone. It would help brands to engineer an image of social responsibility and give them a way to give something back to the world.
A New Frontier
Blockchain can potentially become as impactful as art itself, as it makes it possible for everyone to become involved in the preservation of cultural treasures. More than just a technology, tokenization is about behavior, encouraging art lovers to not only own a piece of history, but also give them the opportunity to work together to preserve it for future generations.
It’s creating a new frontier for art, stretching beyond traditional museums and galleries into the digital realm, where a myriad of possibilities for collaboration, ownership and investment are just a few clicks away.