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Interview: Jason R. Bailey and the Blockchain Art Market

February 9, 2018

Artnome is exploring art through data

 

I recently climbed out from under my rock to explore the worlds of cryptocurrency and blockchain. I sifted through dozens of websites to battle my seemingly unending ignorance: what is Bitcoin, anyway? What is decentralization? What’s a token, what’s a wallet, what’s a miner, and why should I care? In my quest, I happened upon the spaceship Artnome and its digital pilot, Jason R. Bailey. Jason was graciously willing to answer some specific questions about blockchain and its potential in digital art markets, questions like, “what is a digital art market?”

 

(Ranting Wright Media) I recently read your essay,The Blockchain Art Market is Here,” and I was fascinated, not only by the world you illuminated but by my total ignorance on the subject of crypto and blockchain. I am hoping you can clear up a few of my mental obstructions so I can spread the word and help you in your work.

 

(Jason R. Bailey) No worries. I am speaking for myself as a collector here, so there may be other explanations worth looking into.

 

(RWM) Absolutely. Trust me, I’ll be doing a lot more research after today. Let’s start with the basic question: What is the purpose of owning digital art?

 

(JRB) For me, it is the same as the purpose of owning any art. Granted, my relationship to art may be different than most. I see art as a unique lens to better understand the world around me. I grew up as an artist first and a collector second. For me, seeing, decoding, visually exploring, psychologically unpacking and emotionally responding to art is really rewarding. Ownership is really secondary. Why buy art when I can look at the images [on Google images, in published collections] for free? Because I believe in supporting artists. Artists make the things I enjoy most (art), but I can only reasonably expect them to do so if people support their efforts emotionally and monetarily.

 

(RWM) We sell prints of our artists’ work on www.rantingwright.com, but the customer receives a physical item like a poster or a clock. Why would someone pay for something that only exists digitally?

 Blockchain isn't about hanging things on walls

 

(JRB) I spend less than a minute per day staring at a given wall of my house. I likely spend more than 10 hours a day looking at my laptop, cellphone, television screen. If visual art must be viewed to be appreciated, the screen is where I am most likely to see it.

 

(RWM) Fair enough. So, you collect digital art and you support your artists, but how do you know you’re supporting your artist? How does blockchain prevent theft and forgery in a digital world, or even the physical world?

 

(JRB) All art can be duplicated. You can go to most bookstores and buy an art book loaded with hundreds of photographs of paintings by Picasso, Van Gogh, and others. That of course doesn’t mean you own the original art---you own copies. To own an original Van Gogh you need to buy a work that has an agreed upon provenance tracing the work back to the original owner and Van Gogh himself. Without this provenance nobody, including you, knows if you own the original. The blockchain is a distributed ledger, a list of public transactions that appears on hundreds of thousands of computers. When I buy a piece of rare digital art, the provenance is available right out of the gate for everyone to see. The work is typically tied to a token (think Bitcoin). These tokens can be created, bought, sold, traded, destroyed---all the same properties of a physical good. Now combine these two concepts: instant provenance to prove you own something rare, and the ability to treat a digital good as a physical commodity, and you have a recipe for a digital art collection.

 

(RWM) So, someone could still somehow copy the image and ‘steal’ intellectual property, like selling knockoff-brand clothes?

 

(JRB) Can someone duplicate or forge my work? Yes, but someone can also punch me in the face and steal my car. We generally agree as a society that theft is not acceptable. What was missing in the digital art was a way to make something provably rare; we also needed a socially believable way to track ownership. I can’t buy a pizza with a napkin, but people will happily accept a twenty dollar bill. Both are pieces of paper, but only one is backed by a socially agreed-upon contract to be accepted as currency. Similarly, there is an increasing number of people who see the blockchain record of token transactions as sufficient social record to back the idea of making, buying, trading, and destroying digital art.

 

(RWM) In the essay previously mentioned, you reference Maecenas and its forthcoming attempt to democratize the world of fine art by allowing museums to sell percentages of each piece of their collection. How does blockchain work in this context?

 

(JRB) Think of it like shares of stock in a company. The innovation resulting from blockchain is that the transactions cost so little that you can buy less than a penny’s worth of a share, whereas with stock the broker (middleman) fees are so high that you need to buy thousands of dollars in a given stock transaction, at a minimum. With blockchain there is no minimum and transactions are faster (peer-to-peer, no middleman) and cheaper (no third-party cut). We replace the ‘trusted third party’ by decentralizing the transaction, i.e. it is distributed and publicly visible across hundreds of thousands of computers.

 

(RWM) So how do investors make money, when the piece increases in value? If someone buys a piece of a Picasso, do they make money if that piece is being displayed?

 

(JRB) Network effect, mostly.

 

(RWM) What is the difference, then, between buying a digital share of a Picasso and looking at a Picasso for free in a book or on Google Images?

 If Guernica ever goes up for auction, you might be able to own some of it

 

(JRB) I can look at paintings in the Museum of Fine Arts Boston down the street from me anytime I want, as well (and I often do). That doesn’t mean I can buy, trade, sell, or destroy them. With a company like Maecenas I can buy, sell, trade, destroy ownership shares in those paintings with other participants. Same is true for natively digital art. I can buy, sell, trade, destroy the work. Add to that a participatory community and all the elements for collecting/investing are in place.

 

(RWM) I'm starting to realize that all my confusion stems from a focus on finances and money, and what you’re making me think is that the money is not the primary or even the secondary focus of the digital art market, correct?

 

(JRB) You may have noticed I am pretty into this, [and] not so much because I expect to get any money out of it […] but because I think it improves the chances of artists making a better living and making more art. I think the people that are most confused by blockchain art are looking purely from the financial perspective: “Can I make money?” If you look at it more from the perspective of, “How can I make lots of small payments to artists without anyone else taking a cut?”, the paradigm makes a lot more sense.

 

(RWM) I’d like to return to the physicality of art for a final moment. In the previously mentioned essay, you give the example of buying a piece from the artist Moxarra from DADA---is there a physical piece of art that goes with it? Or is that the whole point of the blockchain art market: it’s not about hanging pieces of art, it’s about supporting artists in hopes that they will make more art?

 

(JRB) I could print out the edition I bought from Moxarra, but I have no interest in doing that. The printout would just be one more physical thing I have to take care of. Similarly, I could download the information off the blockchain and onto a tamper-proof USB stick from OpenDime. That would also make the artwork physical, but I don’t need physical artwork. It would be like stamping an .mp3 onto vinyl in order to feel comfortable that it exists. I bought that artwork from Moxarra because I like it and I want him to make more. Because there was no gallery commission, physical material costs, framing costs, shipping costs, storage costs, etc., I was able to buy it for $25 instead of a minimum $250 for [these] overhead costs. And because Moxarra can set the number of editions he can make more money this way as well. And because we have the distributed ledger (blockchain), I can offer that artwork for sale with proof that it is rare (a limited number exist and it is possible to destroy them).

 

(RWM) I appreciate you taking the time out of your day to work through these initial questions. I certainly have a lot more reading and research to do.

 

(JRB) No bother at all. This is still a pretty fringe activity. I think it is a super good fit for a person like me because I have always wanted a way to compensate artists, writers, and musicians, multiple times a day, with tiny amounts of money to promote them making more of the things I love without paying a middleman. I want fewer physical goods that I have to take care of. I don’t care too much if these things make me rich or go up/down in value. For me, the value is experiencing the art I enjoy and rewarding the creator of the work directly. My first question has never been, “How can I make money off of art?”, it has always been, “How can I use money to encourage the creation of more art that I can enjoy?”

 

Artnome is the blog of Jason Bailey, an art nerd building the world's largest analytical database of known works across our most important artists. Think Zillow /Moneyball for art and artists. Jason is mission driven to use technology and data to improve the world's art historical record and to improve opportunities for artists from historically underserved or marginalized groups.

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