Daily Inspired #18 - Marrying Blockchain & Art, Is It Possible?

The Topic

Artwork purchase through blockchain (specifically on HIVE), this led me to think about how can blockchain technology can really help in the art industry. This is a brainstorming exercise that I want to do and welcome people who are interested in this topic to share their point of view as well. I am currently involved in the space between art and education where I started an online creative art learning platform for people to learn and practice art. Having said that, the platform can easily evolve into an art marketplace where the instructors and students can share their artwork and sell them. Whether or not blockchain technology can help and improve the process, I would need to dive deeper. This will be a two parts brainstorm on this topic and I look forward to writing about the next part.

The Learning Points

Pain points in the art market

When we talk about pain points in the art market, there are two points that first come to my mind, which are infringement and market awareness about art itself. Blockchain has the capability to trace and record the source, yet it requires intensive Capex infrastructure to achieve that. From physical labelling to detection and record into the blockchain, progress work recording, packaging, transportation and also the receiving end access to all the information. Therefore, the art industry needs to have a certain amount of transactional value to attract serious investors and start building the infrastructure. From a read up about latest art market from McKinsey, the global market as of 2019 is standing at around 63 billion USD and China had contributed around 21% for the market. In comparison to the giant industry like the foodservice industry which now stands at 1.77 trillion USD as of 2019, the market may not be as lucrative and scalable enough to have serious money invested for blockchain technology integration.

Next up is the awareness and accessibility to art. Asia in overall is a booming region for art market where we see China is picking up in speed. Singapore, Japan, South Korea and Taiwan have been the 4 main powerhouses in Asia when it comes to art, yet the potential of the whole Asia region has yet to unleash as the majority of the nations are still in the "developing phase". One way to identify whether the people are ready to be invested in the art and culture is through the figure of GDP per capita, from the World Bank Data, we can see that Singapore is leading the crowd with Singapore (65k USD per capita), Japan (40k USD per capita), South Korea (31k USD per capita) and Taiwan (25k USD per capita). Of course, we do have Hong Kong standing at 48k USD per capita which also had been playing the bridging role between the Western world and China. As for Malaysia, we are approximately at 11k USD per capita (GDP) which is still two-fold shy from Taiwan. Despite ASEAN being a strong culture hub, our GDP level (except for Singapore and Brunei) are still far behind a decent level of above 20k USD per capita. In other words, people will have less appetite to know and involve with art as they are keen to learn more about skills that could directly improve their livelihood.

Another point worth of taking note is that, in Asia, we are still having a perception where art itself cannot bring much value to the table. In my personal opinion, people having such perception is not the fault about how the person see or perceive art, but it is the duty and obligation of the art industry to stand out and be seen in the public. Art itself has a wide range of the spectrum, from fine arts to commercial advertisement, everything involved art. Even product design and websites like HIVE, it requires a certain level of artistic skill to design and build a usable and comfortable interface. Without art, everything will be very dull and rigid like how computers communicate with each other with just codes. We are living in a world that is filled with art, a house without art will be like a military bunker or prison where everything is minimal and boring. Surprisingly, a school has a lot to catch up when it comes to art as schools are usually built by the government and to reduce cost, all schools are built with a standard, modular design. In other words, all schools look alike without many characteristics. This will raise other problem like lack of sense of belonging due to no landmark or a representative object that people can relate to.

Identity & Trademark

This brings us to the topic of identity and trademark. When an artist built his or her own identity through a certain signature stroke, style or expression, such identity will become a way to proves that the work is done by the artist. Thus, such identity will require certain protection like copyright and trademark where legal actions can be taken if any person tries to conduct infringement and use the artist's name to conduct an illicit act.

Yet, we see that there is forgery happening since decades ago as we see expert forger can even sell their artwork in auctions and successfully fool the house for believing it as the real deal. Of course, such an act would require extensive understanding about the artwork, materials, style and even deals with the auction house. Moreover, with the advent of social media technology, artworks are easily shared around the internet and it is too easy to copy and paste something just by hitting CTRL C and CTRL V. We also see cases where designers use artworks from Pinterest and Behance to use it as their own "solution" and charge the client for design fees. This is one way inappropriate and unethical. However, I would personally say that this is a very grey area where we need to be firm and clear between innovation and blind copying.

From the book Steal Like An Artist, I will agree that we are all learning by copying and mimic the masters' works. There are a lot of available artworks that are good and I personally love it too. Thus, taking them as reference and train with all the artworks has nothing to do with infringement. In fact, it is very beneficial to beginners as we are lack of understanding about the basics. Nevertheless, when it comes to the pros or when we label ourselves as the expert and provide charged services, this is where it becomes different. We no longer can refer and work directly from the work we referred to. It is important that we deconstruct the work to the fundamental, pick the essence, combine with the context and recreate the artwork from the different pieces derived from the design process. It is a very fun but tedious process as we may not get a direct answer, it may come by in an instant or it may need some time to manifest. Hence, this goes back to whether we should be charged on referring to the artworks of others when we are indeed referring but not using it without modification. Derivative works is the word to describe a direct expression by separating out certain element in a very obvious way from the original piece. In most cases, we are using derivative works and label it as our very own innovation which is questionable. Personally, I am still learning and digging more about copyright and trademark study which I think will benefit me in the long run as I am into the art industry.

The supply chain

After understanding the trademark and copyright issues, we then proceed to understand the supply chain and have an overview of who are the stakeholders involved. In order to improve the industry, especially with blockchain technology, understanding the supply chain is fundamental as we can identify the weakest point and strengthen it with technology.

An example case of how an artwork is created and sold to the end-user like how a member in HIVE had a deal with an artist.

Customer approaches artist with an offer for a commissioned art.
Artist and customer negotiate on terms and conditions for the commission with an agreed fee.
Artist accepts the offer and an agreement is signed with certain deposit paid as per the agreed payment terms.
Artist works on the commission piece and updates the customer according to the agreement. Modification may happen if it is not fine arts (especially for commercial purposes).
Final work is done, artist to inform the customer about the status and show the final artwork with background inputs (like stories, materials use, etc.).
Depending on the value of the artwork, the packaging and logistic of the artwork may be different. It may also include insurance as well depending on the value of the work.
Artwork arrived at the customer doorstep and the customer may install the artwork themselves or there will be professional to do the job.
Artwork can even be auctioned after a certain period of time and gain the appreciation value (depending on the nature of purchase).

In all of these 8 phases, there are different underlying issues that may obstruct the progress and even jeopardizing the whole deal. Thus, if the value is justifiable, blockchain technology can definitely facilitate the process by providing value like:

Genuine proof of artist and their work with an identity creator mark from the artist.
Transfer of value (in this case art piece) and proof of record that such transaction occurs and cannot be altered.
Escrow facility with minimal or even free of charges by utilizing smart contract, safety for both customer and artist to have payment guarantee.
Proof of offer and accept with a smart contract, this way things are formalized between both parties in terms of the engagement of service and promised deliverables.
Integration of insurance, packaging and transport services for high-value items with blockchain technology. In one way, it reduces the risk of even the logistic company to supplant the artwork and replace with fake (too many drama series)
Resale of artwork can be done virtually with a ready proof record of all the transaction happened under this piece of artwork.
Instant transfer of ownership (depending on the blockchain transaction speed).

Inspiration

Understanding the industry and trying to hack the way through to improve the current flaw is something exciting to do. Problem-solving would be always the key skill for all of us to uphold and keep improving especially for those who want to survive in the 21st century. Blockchain technology is a blessing to us but it is important that we really understand what problem we are actually solving and see whether the technology is the right fit to solve the problem. From this brainstorm, I understand that not everything can be solved by technology, it has a multi-diverse level of consideration and interaction happening throughout every unique supply chain. Hence, we need to understand from that point of view rather forcing the technology as the antidote for the industry.

A special mention to @joshman who had triggered me to think about this topic and look into the possibilities of how blockchain could improve the user experience of purchasing artwork. I personally looking forward to facilitating and to be part of this movement to push the boundary. I remembered that during Steem time where @sndbox and @creativecrypto are a big deal that time promoting art and blockchain. Now, I have the chance to venturing into this with more time on my own and I see this as a potential that could impact many, especially on the part to empower artists. We are at a time where many talents are grossly undervalued and through blockchain, we could facilitate the open up the market to a wider audience too.

I would love to hear from the big boys & art players on the platform like @blocktrades, @theycallmedan, @azircon, @encrypt3dbr0k3r, @darthknight, @pharesim, @themarkymark, @gtg, @onchainart, @nftshowroom, etc. Hope to get inputs from the community and see how we can head this to. I would say this is an exciting journey to be on.

Reference

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Record

Daily Inspired #00 - My Beginning
Daily Inspired #01
Daily Inspired #02
Daily Inspired #03
Daily Inspired #04
Daily Inspired #05
Daily Inspired #06
Daily Inspired #07
Daily Inspired #08
Daily Inspired #09
Daily Inspired #10
Daily Inspired #11
Daily Inspired #12
Daily Inspired #13
Daily Inspired #14
Daily Inspired #15
Daily Inspired #16
Daily Inspired #17