Integrating Bitcoin and Blockchain Into Your Art Business

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Auction houses like Sotheby’s and Christie’s have dominated the global art market for centuries, but cryptocurrencies and the blockchain technology that underpins them are helping to even the playing field.  

Two years ago, the Austrian Museum of Applied Art/Contemporary Art (MAK) became the first museum in the world to purchase a work of art with Bitcoin, a screensaver by Dutch artist Harm van den Dorpel.  Since then, visionary art galleries and entrepreneurs have also made forays into the digital landscape.

Transferring Money with Bitcoin

Last summer, Dadiani Fine Art became the first gallery on London’s famous Cork Street to accept cryptocurrencies.  Owner Eleesa Dadiani claims that her decision to let clients pay with Bitcoin was not based on demand, but rather on her intuition.  She thinks that digital money will become increasingly common and that the self-governing nature of distributive ledger technology (DLT) makes transactions more secure.  (Read our guide to cryptocurrencies.)  “Blockchain is a borderless, open source, decentralized peer-to-peer network that governments cannot shut down,” says Dadiani. “For me, the blockchain is going to be the biggest thing since the internet.” 

Here are the basic steps involved in accepting payment from a client in Bitcoin:

  1. Install a Bitcoin wallet on your mobile phone.  Search for “bitcoin.com wallet” in the App Store or Google Play store, install the app, and follow the set-up instructions.  You will be provided with a private key, a character string that is known only to you and can be used to electronically sign transactions, and a public key, a character string that you can share.  
  2. Give your client your public key.  They can use it to send money to your account from their digital wallet or Bitcoin exchange. 
  3. Convert your Bitcoins into fiat currency.  Mobile wallets can be linked to your regular bank account and converted to your local currency.  If you subsequently need to convert between fiat currencies, use our comparison tool to find the best foreign exchange rates and cheapest international money transfer service.

Verifying Provenance with Blockchain

 

blockchain padlock.jpg

 

Blockchain can widely and permanently record each transfer of ownership for a work of art, so it is gaining acceptance as a method for verifying a piece's provenance and whereabouts.  For example, there is an online marketplace called Maecanas that lets art owners sell shares of artwork worth $1 million USD or more using cryptocurrency.  Every time an investor purchases a share, the transaction gets recorded on the Ethereum blockchain.  According to Maecanas CEO and co-founder Marcelo Garcia Casil, the artwork initially needs to be evaluated by a skilled professional, “but once the provenance has been recorded in the blockchain, you never have to do it again."

With its ArtTracktive proof of concept, top consulting firm Deloitte aims to make all legs of an artwork’s journey, and all parties involved in that journey (e.g., artist, owner, freight forwarder, customs, buyer, etc.), traceable through a distributive ledger. Forward thinking like this has unsettled more than a few art world traditionalists who are wedded to paper-based authentication and who believe that technology shouldn’t replace human expertise.  But the $57 billion global art market has more than enough room for some experimentation by its nimblest players.

 

Should your business be accepting Bitcoin? read our Bitcoin guide


Marisa Fasciano
Content Specialist
Marisa is a communications consultant based in New York with a background in social research, diversity education, and nonprofit development.  She has lived and traveled abroad extensively… Read more

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