How blockchain technology could revolutionize the art market

How blockchain technology could revolutionize the art market


JUDY WOODRUFF: Now: how some in the art world
are using technology to help guarantee the authenticity of their work and help ensure
artists get paid. It’s a story that’s a mix of art and technology. Miles O’Brien has the story for our latest
segment on the Leading Edge of technology and part of our ongoing Breakthroughs series. MILES O’BRIEN: In the capricious world of
fine art, there is little that is fair and equitable for the artists themselves. If you are at the top, your work can fetch
astronomical prices. This David Hockney painting sold for $90 million
in 2018. But Hockney’s cut? Zero. And, of course, for the vast majority of artists,
zero is an all-too-familiar number. They don’t call them starving for nothing. But technology may be changing the landscape,
with some bold brushstrokes. JACKIE O’NEILL, Blockchain Art Collective:
I am a big proponent of what I call, the new art economy. MILES O’BRIEN: Artist and entrepreneur Jackie
O’Neill is doing her part to create that new economy. She started a company called the Blockchain
Art Collective. She believes helping artists monetize their
work begins with a better system for identifying what is real and what is fake. For 10 dollars, she sells artists a little
gadget you might have implanted in your dog to keep him or her from being lost, a radio
frequency I.D. chip. JACKIE O’NEILL: So, if you try to remove it,
it will fall apart into a bunch of little pieces, and then the microchip pieces will
void once you get to the point of actually removing that. MILES O’BRIEN: A smartphone app can scan the
RFID, which stores information about the piece, the artist, title, date, medium, area, region,
and origin. And it has a unique identification number. It’s a way to prove it is authentic. JACKIE O’NEILL: Authenticity basically says
that this rare, precious, unique object is what people claim it is, and it’s hard to
prove that often. So, when people are going and trying to prove
authenticity or provenance, they usually go to the expert. Experts usually are art historians. MILES O’BRIEN: Anyone who watches the “Antiques
Roadshow” knows how that works, authenticity, scarcity and value determined by seasoned
experts, sometimes leading to thrilling moments. WOMAN: I would suggest an estimate of $200,000
to $300,000. WOMAN: That’s so much. MILES O’BRIEN: But as the name of Jackie O’Neill’s
startup suggests, much of the work of the middlemen is supplanted by storing all that
history, or provenance, with blockchain technology. Blockchain enables cryptocurrencies like Bitcoin
and Ethereum, but it has many more applications. After all, it’s all about verification and
trust. Instead of relying on an accountant, appraiser
or an auction house to keep an accurate database of an art’s provenance, blockchain allows
the whole world to watch. The chain of these records is copied on thousands
of computers, making it virtually impossible for anyone to cook the books or, in this case,
forge a piece of art. JACKIE O’NEILL: There’s way more complexity
that can be baked into it now that benefits the artists over time, that automates the
gallery commission, saves time and money, and you don’t have to work so hard to prove
that authenticity and provenance. MILES O’BRIEN: And it works even if there
is no physical object, when the art is purely digital, nothing more than a binary code collection
of 1’s and 0’s. John Watkinson is the co-creator of CryptoPunks,
a groundbreaking pixel art sensation. In 2017, he and co-creator Matt Hall produced
10,000 CryptoPunk characters. They kept 1,000 for themselves, then offered
up the rest online, for free. JOHN WATKINSON, Co-Creator, CryptoPunks: There
is male, female and there’s a few rare types. So, you can see there’s a zombie, an ape. The most rare is an alien. There’s nine of those. We wanted to make it so that there was sort
of a scope of rarity. MILES O’BRIEN: Each character was assigned
a link in the Ethereum blockchain, so the authenticity, scarcity and ownership of the
Punks was all instantly and globally provable. Nerdy art collectors soon began buying and
selling CryptoPunks, spurring an active online market. JOHN WATKINSON: We sort of hit a nerve, I
think, in that the audience that was into these currencies, the art appealed to them
and the collectible aspect appealed to them. It all worked together, but it also was just
an interesting answer to question, like, do you feel like you own these things? And the answer was yes. MILES O’BRIEN: Right now, the average value
of the CryptoPunks, including the common ones, is about $40 to $50. But the high water mark, one rare alien, which
sold for $16,000. JOHN WATKINSON: It’s a little different than
having a painting on your wall. But, yes, I think it’s clearly something that’s
coming, because the younger generations are totally comfortable with digital ownership,
and digital things feel real to them. So it feels like it’s something that will
naturally become more prominent. MILES O’BRIEN: An all-digital art market is
an empowering prospect for aspiring artists. That’s a big driver behind Dada.Art. It’s an online social network that allows
artists to collaborate and communicate with each other through their drawings. JUDY MAM, Dada.Art: So you make a drawing,
and somebody from anywhere in the world can reply to you with another drawing. And this creates these spontaneous visual
conversations among people from all over the world who may not know each other. It’s a really pretty magical thing. MILES O’BRIEN: Judy Mam is the co-creator
of Dada. JUDY MAM: The first person who draws decides
on a topic or a theme, colors, but the people who follow, to our surprise, really try to
create a very coherent work of art. MILES O’BRIEN: This Dada piece began with
a portrait of your humble correspondent, and ended with this depiction of our favorite
anchor Judy Woodruff. JUDY MAM: Hola, Boris. How are you? BORIS TOLEDO GUTIERREZ, Artist: Hola, hola. MILES O’BRIEN: Judy Mam introduced me to the
artist, Boris Toledo Gutierrez of Santiago, Chile. He is a frequent Dada contributor. Boris, it’s a great pleasure to meet you. Tell me a little bit about what you find interesting
and fun about drawing on Dada. JUDY MAM: “What is generated by the community
and the fact that people make all these works, but that they are always shared in common.” MILES O’BRIEN: When Judy Mam and Dada.Art
founder Beatriz Ramos looked at ways to help their artists monetize all this stunning creativity,
they too turned to the blockchain. It allows anyone to own an individual drawing
or an entire conversation. BEATRIZ RAMOS, Dada.Art Founder: We want to
give artists a guaranteed basic income, everyone in the community. We would hope that artists could make ends
meet by being artists. It’s like no one ever thinks of dentists,
oh, poor dentist are struggling, right? The dentists need to have four gigs in order
to survive. It should be the same with artists. MILES O’BRIEN: Even established art icons
are dabbling in this brave new art world. In 2018, Christie’s, with help from blockchain
art registry startup Artory, sold a collection whose provenance was stored on a blockchain. It was used to give buyers more confidence,
but blockchain could also make it possible for an artist to capture royalties in auctions
like this or wherever and whenever their work is sold. It’s the norm for composers and novelists,
so why not artists? JACKIE O’NEILL: Every time this object gets
resold, I can contractually automate, embed securely that each subsequent sale of an art
on the secondary market for living artists, for artist estates, they can seek 10 percent
of every single subsequent sale. Right now, they don’t see any of that. MILES O’BRIEN: No doubt, David Hockney would
appreciate the royalty. As it is, some of his work is finding its
way onto the chain. A Korean company intends to sell fractional
ownership of his work, meaning many people can own a share of a Hockney piece, a way
to please to art fans with shallower pockets. But even though they could guarantee royalties
as well, these blockchain sales will not put anything in Hockney’s pocket. For the “PBS NewsHour,” I’m Miles O’Brien
in New York City.

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