Two months from now (May), an artwork will be sold for about 70 million dollars in either bitcoin or Ethereum. This indicates the latest attempt by an art auction house to leverage blockchain technology to promote ingenuity. It’s a sign we are moving from questions like ‘where can I buy ETH 2.0’ to ‘how can I help improve the NFT and art space’.
This week, one of the leading United States auction houses announced that it will accept Bitcoin (BTC) and Ether in exchange for certain paintings by Jean-Michel Basquiat. Specifically listed for auction includes “Untitled 1982,” estimated at $70 million or roughly 1,650 bitcoins depending on how you want to measure them.
This is not the first time an auction house has been involved, and Phillips has also not been a newbie here. Phillips has cornered the market with their June 2020 auction of a piece by Banksy. They accepted Bitcoin as payment for this artwork which sold at around $3 million – not bad considering how much more it would be if they had hodl to the $69,000 per bitcoin price.
Table of Contents
Introduction
Blockchain technology is a game-changing innovation that has the potential to revolutionize how we do business, track assets and move money. It functions as an online ledger for all transactions conducted within its network, verified through cryptography. After the verification, these transactions are recorded on multiple computers simultaneously, making it virtually impossible to eliminate anyone copy from circulation even if anyone wanted to.
From art authentication and provenance tracking, blockchain can provide solutions for collecting artwork and ownership share of such pieces between multiple parties. To ensure no conflicts or errors occur during transactions, they are all visible on an open ledger that no one party controls.
Problems facing the art industry
Although the art industry is as old as man, problems as ancient as man also exist in the space.
- Look at the state of the art industry today. It’s riddled with fraud, illicit transactions, and tax evasion-all products of a fragmented physical market that is hard to trace. Blockchain could solve this problem because it provides an easy way to determine true ownership without relying on centralized databases or third-party assessing services, which are susceptible themselves, sometimes also biased due to their financial relationships with their clients.
- Though the economic state of the art market is a hybrid type, it still has many factors that determine its price. First and foremost, perceived cultural values for an object as well as past monetary values or predetermined futures prices determine an art’s value.
- The global art market is a highly liquid yet opaque environment. While private sales represent half of all transactions in this space and data on those purchases are available to buyers through sources like Christie’s or Sotheby’s Auction House. it can be difficult for the uninitiated buyer who wants more transparency when they invest their money into high profile pieces by artists such as Picasso or Monet.
- Some people have the suspicion that auction houses may be bribing buyers with information about reserve prices. This Would allow them an unfair advantage over other competitors and force up pricing on items before selling it off at their own profit, or even preventing sales altogether if no anonymous bidder is willing to pay more than what was set out originally for one party (usually seller) get top dollar when they were not planning on asking any kind of price whatsoever.
How the blockchain technology has influenced art
Blockchain technology is a revolutionary technology that has the potential to change how we operate in many aspects of life. Blockchain could be a great tool to help artists sell their work more easily. It would also allow the government to monitor tax evasion, but some issues need fixing before we can make it happen.
In today’s world, where art is often traded privately between two parties who may never meet face to face or know each other’s identity – blockchain might just take off as an effective way for them both. For example: assure authenticity by ensuring all transactions occur at publicly verifiable times; provide transparency on price & party involved in the sale, so the buyer knows what he/she is getting into
How can this be done?
Smart contracts are lines of code that facilitate, execute and enforce an agreement between participants. They do so by automatically triggering at predetermined conditions without the need for any intermediaries to get involved in negotiations.
Smart Contract technology reduces complexity within transactions, which speeds up processes while also eliminating potential miscommunications along with potentially bad actors taking advantage if there was no way (at first glance) to determine whose word should matter most between two parties.
In a time when many artists are struggling to make ends meet, smart contracts could provide them with an additional source of income. For example, one party purchases artwork from another through these automated agreements, which recognize rights and automatically pay royalties in perpetuity – ensuring that both buyer and seller receive their fair share.
The use case for this technology would be vast if it were implemented properly: not just royalty payments but also transactions between companies who want complete security without intermediaries or third parties getting involved.
Smart contract technology is still in its infancy, and even though there are many limitations at this point for smart contracts to be widely accepted by both businesses and individuals. They’re likely going through a maturity process where they’ll become more versatile while also having improvements made on their code. For example, bugs can always get found when developing any type of software, so it’s important not only to have good money but also to understand what you’re doing from an engineering perspective.
Conclusion
The auction house has not yet announced all the works of art that will be available for purchase with digital currencies, but it is a clear sign that the art world is beginning to accept cryptocurrencies as a payment method. This could pave the way for wider adoption of Bitcoin and other digital currencies in other industries beyond just online retail. Are you thinking about investing in cryptocurrency? If so, head over to Redot.com today and buy yourself some Bitcoin or Ether!
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