Encrypted art is expected to bring a new generation of collectors with a background in encryption knowledge into the field of art collection.
Original title: “The Future of the “Encrypted Art” Market”
Written by: Qinwen Qinwen, Head of the Web3 Foundation in China Source: Bazaar Art·Foresee, February 2021
The artwork itself has financial attributes, and the art blockchain will kick off a new prelude to the integration of art and finance in 2021. The breaking of the traditional art trading model has established a shared trading order in the virtual world. Artists, collectors, practitioners in the art industry, and capitalists have tried the waters while cherishing expectations. Cross-circle integration has established a relationship between the public and the art. Low-cost cognitive link, but the existence of traffic will inevitably cause the dilution of artistic value. Then, can the emerging “encrypted art” set off a new trend in the art blockchain? How long can the capital bubble in the virtual world blow? How strong is the public confidence in the integration of technology and art?
Technology and art seem to be two opposing worlds, but the logic behind them is surprisingly consistent. Technology seeking truth, art seeking beauty, both are driven by curiosity and imagination, and both require tireless research and creation. The birth of the Internet gave birth to the era of Web 1.0. Technology enthusiasts in the 1990s ran personal servers and websites and devoted themselves to academic research. At that time, the Internet was not related to social structure, and people had not yet begun to discuss the topic of “net neutrality.”
“CryptopPunks” series
In the Internet era of Web2.0, the real social structure of giants and middlemen has been moved to the Internet. The Internet helps artists connect with their fans through Instagram (social application) or Artsy (art trading platform).
The changes brought about by the Web 3.0 decentralized Internet era are deeper. Decentralized technologies such as blockchain are used to change the control of technology giants and return rights to individual network participants. Solve current Internet data privacy and personal data sovereignty issues through encryption methods such as zero-knowledge proof. Therefore, the blockchain has also produced two different integration directions with art: the first is to help the traditional art objects to be digitally mapped on the chain to solve the problem of traceability. The other is the booming field of encrypted art and the resulting decentralized art market infrastructure.
The first to propose the concept of Web3.0 was Dr. Gavin Wood, known as the “Invisible Brain” of Ethereum. He is the creator of Ethereum’s CTO, Polkadot.Network, and Kusama.Network. Not only is he proficient in music and art, he is also fascinated by the study of game theory, social science, and political science. He is also supporting scientific and technological projects in the art world through the network he created.
Blockchain artwork “Portrait of A Mind: Block 21”, Ben Gentilli
In 2018, Christie’s, the world’s top art auction house with a history of 250 years, chose cross-border technology and actively paid attention to the development of the intersection of technology and art. Blockchain technology was the top priority. In 2018, Christie’s in London took the lead in opening a dialogue on art & technology, discussing whether “blockchain technology is ready to build consensus in the art market.” Then Christie’s auction house announced that it would record art sales through blockchain. At the “Art Technology” conference in Hong Kong, China in 2019, I shared with my friends in the Asian market an insight into the industry trend of “Art and Blockchain”-“Building a Decentralized Art Market”.
In October 2020, Christie’s in New York announced the auction of the blockchain artwork “Portrait of A Mind: Block 21” created by Ben Gentilli, including: a physical object and an NFT collection. Christie’s recently announced that it will auction the NFT work “Everydays-The First 5000 Days” created by artist Beeple. This will be the first purely digital art work supported by a large auction house. The bidding time is February 25. Until March 11. After the news was sent out, it attracted the attention of the global encryption and art circles.
“Encrypted Art”, the native art of the encrypted world
Note: The term “crypto art” is a literal translation of Crypto Art.
The Ptolemaic dynasty of Egypt established the Alexandria Library to collect books from all over the world. The difference is that the cultural relics in the Library of Alexandria were finally destroyed in the fire, but the “encrypted artwork” in the digital wallet can live forever in the digital world. “Encrypted Art” is a native digital artwork that is first released on the chain through a blockchain smart contract in the form of NFT. 2020 is a year of vigorous development of “encryption art”, and the results are impressive.
A digital star card of LeBron James was sold on the blockchain game NBA Top Shot for $75,000. Creators use Mint as a non-homogeneous token NFT, which can be sold or auctioned for cryptocurrency as income on blockchains such as Ethereum or Flow. On the popular Ethereum art platform SuperRare, the total income of artists and collectors has reached US$4.5 million and US$1 million, respectively.
Digital star card
What is driving this emerging trend? The reason for the trend is the result of group cognition. The economy determines the superstructure. Henggu’s famous artists and luxury brands are all “consensus” established by the affluent class with good aesthetics, social resources and the right to speak. Today, in the twelfth year of the birth of Bitcoin, the price of Bitcoin exceeded $50,000 after the influx of mainstream institutions in the United States in 2021. The “crypto world” has a market value of about 600 billion US dollars, and has undergone a small-scale “redistribution” of wealth on a global scale. Wealth is distributed to the contributors and community participants of the decentralized network code, creating a group of upstarts in the “encrypted world” and establishing a new voice and “consensus.” In part, they have become a new generation of collectors and platform investors who are spending a lot of money in the wave of encrypted art.
The Winklevoss Brothers Gemini brothers, worth 3.2 billion US dollars in bitcoin, invested in online art auction platform Paddle 8 as early as 2014 and facilitated the access to bitcoin as a payment currency. Although the two brothers have been passionate about the art circle for many years, their first art collection was Cryptopunks by Larva Labs. In 2019, through the acquisition of their encryption company Gemini, they formally acquired Nifty Gateway, the industry’s hottest NFT trading platform, and recently set an industry record of $700,000 per item.
The Winklevoss Brothers bought “CryptopPunks” at the New York Art Fair. The two founders of Larva Labs, John Watkinson and Matt Hall in the center
“Encrypted World” is expected to bring a new generation of collectors with a background in encryption knowledge into the field of art collection. You may ask, why don’t they directly enter the art market to buy works of modern and contemporary artists, but choose the emerging “encrypted art”? I think it can be boiled down to two points: “cultural identity” and competition for the right to speak of the “power structure” brought about by technological innovation.
Open source culture and community power
The term “open source” comes from geek culture. Throughout history, most human organization models have been designed to adapt to scarcity. The simplest organizational model is the command system; and the open source world of the blockchain is built on an open community of “free” and “consensus”. The members of the global community gather for common ideas and have equal rights to shape and optimize software by contributing code. , Gain reputation or financial incentives through personal contributions. This is a truly global decentralization movement.
Take “Portraits of a Mind”, a physical and NFT work about Bitcoin culture that landed on Christie’s in New York in October 2020 as an example. The work itself runs through Bitcoin culture. There are a total of 40 works in the entire series. The numbers on the physical objects are the original codes of the underlying Bitcoin; each works are scattered around the world, and there is a unique digital geographic coordinate embedded in the code base, and each geographic coordinate is related to the history of Bitcoin. Related to an important position. The gilded characters on the code can be found through an algorithm developed by the artist.
It not only echoes the name of the proof-of-work mechanism project behind “mining” Bitcoin is Robert Alice. Because Bob and Alice are the most famous pair in the field of cryptography. What a geek and romantic! The top-notch works have also attracted top collectors from the “crypto world”, including two other Binance CEO Changpeng Zhao and Bloq Chairman Matthew Roszak who are on the Forbes Crypto Billionaire list, as well as Kenetic Capital. The founder of Jehan Chu et al.
How does the NFT technology behind “encrypted art” reshape or establish the “power structure” of the digital art world? The full name of the NFT based on the blockchain is Non-Fungible Token (Non-Fungible Token). For every piece of art, you cannot trade a Picasso for a Monet. The same is true in the blockchain world. For the two assets that can be directly traded with the same standard, such as Bitcoin, we call it Fungible Token (homogeneous token); and as a “thing” (non-standard asset) in the encrypted world ), known as NFT, allows each work to be one-to-one on the chain to achieve uniqueness confirmation and on-chain traceability. For collectors, this is the real era of digital ownership, where you can control your digital assets through private keys. One of the most important innovations of blockchain to art is the creation of digital goods that can prove the uniqueness of the version.
At the same time, this will also be the first time in history that an artist has participated in the profit sharing of the secondary market, returning the voice of the industry to the creator. The birth of Ethereum in 2015 brought a Turing-complete smart contract, which can be understood as the transaction can only be completed when both parties meet certain conditions. In the transaction of NFT encrypted art works, the artist or the platform writes the profit sharing conditions for each future chain sale into the contract, and the artist can intervene in the secondary market of his own work, and each recirculation of the encrypted art in the secondary market , Will get the share of creative rights agreed in the contract. In addition, programmability can also help digital art to achieve share trading. This may be the first time after the Renaissance that an artist has such a high position in the market.
The art market has always used galleries as the middleman and collectors as the core. Artists only provide output. The amount of money for subsequent works has nothing to do with the artist. The emergence of blockchain has transformed this power relationship. The economic benefits for emerging artists are significantly better than traditional systems. But this does not mean that there is no need to collaborate with galleries at all. Especially giant galleries, they have extremely high star-making ability and strong operational skills, financial resources, collector resources and platform advantages are obvious that they can increase the market position of artists at the fastest speed, and the market prices of popular artists’ works will be instant. It is more than tenfold in between.
Daniel Arsham works
For “crypto artists” that have been recognized by the market (of course, the artistry of their works is always the first), the next more ambitious goal can be to cooperate with giant galleries to expand their influence to a broader fashion and consumer industry. The highly influential global community has formed a unique IP in the “encrypted world”. The cross-border influence brought by the “cryptographic new world” financial system is not available to most artists. Take KAWS and Daniel Arsham, both of which Dior has worked with, as examples. The common point of the two is the development of their own IP and the control of the primary market. At the same time, they are all on Perrotin’s agency list. The agency of giant galleries is not their only way of survival, but a strong alliance. What’s more, smart contracts can clearly specify the profit sharing ratio through codes, which will undoubtedly be a win-win situation.
Art and fashion are inextricably linked. More and more luxury brands realize that the process of using artists to choose and explore suitable artists for collaboration is itself an important chapter for each brand to continue to write a “legendary”. I believe that it will be a matter of time for the “crypto world” to get closer and closer through the “crypto art” and the two industries where art and fashion are the most powerful. The latter will also feed back more application scenarios and new users in the encryption world.
New world opportunity
Most artworks in the crypto field are related to a kind of emotion-greed. Not all works can be called art. Art styles and work innovations that are truly collectible and cross-epochal are still rare and are chased by the market. . For example, “Portraits of a Mind” mentioned above. Are the new generation of collectors ready to explore Picasso in the new world?
Canary Network Encryption Art “Chaotic Parachain”, Artist: IOYOI Hong Sicheng
Can “encrypted art” become a capital of art? Different from previous art trends, the emerging art movement around art technology is not concentrated in traditional art capitals such as Paris and New York, but a decentralized movement that is truly prevalent in the world. This means that for those countries and cities that want to become new cultural pioneers, they only need to open their doors and provide support to these frontier thinkers and artists to achieve this goal.
The discourse power and rules of the traditional art market have always been dominated by the West, and Asia has certain advantages from the user market to the engineering talents, especially in the field of the encrypted world. Some change events and institutions that will have an important impact on the future are happening now. Technological innovation is bound to be accompanied by the emergence of service organizations. Asia’s first “crypto art” ecological brand BCA (BlockCreateArt) is moving towards creating a “crypto art world” ecosystem, operating from galleries, art IP, technology and art education to trading markets Ecological services.
The world’s first offline encryption art exhibition will be held in Beijing UCCA Lab and Shanghai Jinghua Art Center from March 26 to April 4, 2021. At that time, Christie’s New York’s Bitcoin Culture NFT work “Portraits of a Mind” will also come to the scene for the first time. The exhibitor hopes to introduce the blockchain culture represented by Bitcoin and the Polkadot community to art and technology lovers through this exhibition. And build a platform and bridge for the new generation of traditional and encrypted artists to contact the vast art and the encrypted ecology.
The world’s first offline encryption art exhibition will be held in Beijing UCCA Lab and Shanghai Jinghua Art Center from March 26 to April 4, 2021.
The possibility of art finance: NFT + DeFi. We are entering a decentralized future art market, and this market is built on the blockchain public chain. Including the ecological matching auction platform and virtual gallery, OpenSea on Ethereum is currently the largest trading platform for encrypted collectibles, and “encrypted art” is one of the main types of transactions on the platform. At the same time, art brokers such as SuperRare appeared to provide “crypto artists” with work distribution and promotion services. The virtual space Cryptovoxels provides an online display space for art works. However, the problems of Ethereum network congestion and high transfer fees undoubtedly plague everyone.
The third-generation blockchain Polkadot solves this problem well due to the composability of its underlying Substrate. Through the cross-chain function, more than 100 chains can work at the same time. The NFT chain does not have to compete with financial applications, and can not only maintain The fee can also connect to the encrypted art ecology on Ethereum. Chiba Gallery, the virtual gallery of Kusama.Network, is also presenting in China through the world’s first encrypted art exhibition. Artists can experience the creation of artworks through RMRK.app and PolkadotAsset modules during the workshops during the exhibition. The process of winding up. At the same time, Unique Network can support various ownership models-shared ownership, exhibition lease, ownership and use. That’s right, the scene of art finance is likely to be realized under the dual combination of “NFT + DeFi (decentralized finance)”. At the same time, the democratization of a new generation of art collection consumption will be realized.
“Art Finance” simply means that the financial services in the art market include art advances, mortgage financing, art funds, and operation and financing of public institutions. New York’s MoMA used a Moody’s credit rating of Aa2 to raise funds through bonds in 1980. The museum uses its real estate as collateral, and its super strong operation and fundraising capabilities are also important guarantees.
The “crypto world” will undoubtedly bring water to the operation and financing activities of public art institutions. In 2018, the Whitney Museum in New York established a blockchain-based donation plan. The Polkadot advance network canary network (Kusama.Network), led by Dr. Gavin Wood, who has become a “code poet”, is actively providing financial support for the “Technology and Art” project that supports the construction of the network ecosystem. As a decentralized network, the parliamentary members of the network control this finance through on-chain governance, sponsoring the Voxel Bridge project including ArtProject2020 and the world’s first “Encrypted Art Exhibition” to be completed in China.
Whether or not the art block chain and “encrypted art” become capitalist’s new toys again, they have opened a new chapter in the possibilities of technology and art. At this stage, the market is growing in chaos, and heroes emerge from chaotic times. Opportunities and potentials are the same. in.
How will the future of the encrypted art market develop in the Web 3.0 era…
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