What digital art is missing

20 September 2021

Physical art (paintings, sculptures, …) and digital art (photographs…) are just two different formats of art expression. However, the ecosystems surrounding them are quite different. If you buy a painting from an artist, you can be sure you have the original and that the author cannot sell it to anyone else. The artist still stays the author, but you become an owner of it, even though some people can try to do counterfeits or copies for other uses. In the digital world, the artist (e.g., photographer) can sell their piece to how many people he/she pleases and none can be really sure if they are the sole owner or among thousands of others. Therefore, monetization of digital art is not very easy.

The economics behind this are quite straightforward. If a collector knows they cannot really verify that the artist sold only to them, they are not willing to pay a premium as they are with traditional paintings. The artists then have a little motivation to invest time to top-quality art or if so, they need to sell it to many people for low prices. The secondary market then barely exists.

There is the revolution going on in this area now. One of the most common use cases for blockchain is exactly this. Given the blockchain characteristics – transparency and immutability – the artist can record the art piece (e.g., photograph) on blockchain and the ownership can then be transferred to the person who is willing to pay similar premium as to when they are buying traditional art. The artist stays the author, but the owner is the collector and they can then sell the art to someone else.

All this is already happening. Check OpenSea, Rarible, KnownOrigin, and many more. These are marketplaces that allow artists to issue digital tokens linked to the art, to transfer them to collectors and collectors to trade among themselves.

However, given that the area and technology is relatively new, there are still some unresolved issues. First of all, there is a huge hype around some of the art pieces that might not be worth what they are sold for. Second, given the openness of the ecosystem, everyone can become an artist and sell whatever they deem to be art – the marketplaces become infested with worthless pieces that just sits there.

Bearing this in mind, these are just minor obstacles on a road to digital ownership. Transparent and immutable character of blockchain can bring similar characteristics to the digital arts market that are common to the traditional, physical art. We should be focused on the purpose here and not get distracted by issues of immaturity of the market and look for its mainstream adoption.