Art Market 2.0 – New Report Sets Outlook to Financialisation in Visual Arts from Blockchain
The Art Market 2.0: Blockchain and Financialisation in Visual Arts examines how the art market could be challenged and shaped by blockchain technologies and is a product of nearly a year’s research and 26 interviews from industry experts in arts, finance and blockchain, conducted by academics at The Alan Turing Institute and the Oxford Internet Institute, University of Oxford.
While the hype around blockchain may appear to be exhausted, this report focuses on one of the least-discussed applications for blockchain, yet one where the technology’s implications may hit the hardest – the art market. Art Market 2.0 analyses how and in what specific areas blockchain technologies could be used to change the composition of the art market, including the method of sale, record of provenance, and transparency of ownership.
The report finds that whilst blockchain as a technology may not be as pivotal as many expect, it has become a catchword for how digital technologies more generally could be used to radically reorganise sectors such as the arts. Such applications are still in a nascent stage of development and further research and investment is needed to develop mature applications that are equitable to all.
During the research and interviews, two competing views emerged over the future of a blockchain-powered art market. Hope, that the adoption of digital ledger technologies would lead to a more balanced, transparent and equitable market to help artists monitor what their art is worth and collect royalties due to them. Fear, that such technologies would be applied to the art market by a single entity which would extract even more economic rents from artists, leaving them at risk and disenfranchised.
The issues of trust and governance were also explored, as blockchain technology is hoped to provide a great deal of promise in managing the risks of fraud in the art market. However, with competing vested interests, the realisation of this technology could pose a challenge for how this technology is created and maintained and its future success in bringing to light greater transparency and trust.
Based on these findings, Art Market 2.0 envisages a potential new future where liquidity is key to unlocking the art market, and a distributed ledger-powered art trading platform could provide it.
The report argues that a distributed ledger-powered art market would be in the interest of all parties – artists, buyers and sellers. Distributed ledger technologies would allow for verified transaction records and ownership, transparent and fair prices, facilitate royalty collection, and confirm art pieces’ provenance and authenticity – all easing the ability to sell quickly and increasing the liquidity in the market.
Art Market 2.0 also recognises the UK and London’s central position in the global art market but cautions that it shouldn’t take this for granted as it would need to continue to attract leading tech companies that could develop the underlying technology to power future art trading systems.
Furthermore, while the UK has already taken a leading position in art market equity through principles such as the Artist’s Resale Right, a forward-thinking policy which entitles artists and estates to royalties from the resale of their works, the report proposes that the UK could set a global benchmark for the digital economy in pushing for a new standard for equitable art trading in a new Fair Art Market model.
The report calls for the UK government to invest in securing its’ position in the global art market by developing strong conduct standards which reflect society’s values of transparency, legality and equitable benefits to artists and help preserve the country’s economic future.