28 June, 2018

Blockchain Art Auction

For the first time ever, blockchain has been used in an art auction.

Dadiani Fine Art, who managed the auction, became the first gallery to accept cryptocurrency last year. However, this was the first time that cryptocurrencies were used in an online art auction. The aim of this sale was to democratise the art market and make it easier to enter.

There was a catch though as only 49% of the painting was sold! The majority shareholder, Eleesa Dadiani, can still keep the item in her possession. She will issue certificates of ownership for the winning bidders. The auction started on June 20th, 2018.

The painting in question is 'Fourteen Small Electric Chairs' by the American artist Andy Warhol, which is currently valued at £4.2m.

How it Works

The reserve price was set at £3m and digital certificates could be purchased using Bitcoin (BTC), Ethereum (ETH) and ART. The blockchain platform selling the artwork was provided by Maecenas. Owners of their secure certificates can transfer ownership through the Maecenas exchange.

Trivia - buyers who purchase shares will need to comply with KYC and AML checks.

So, for investors who want to buy shares as opposed to full artworks which are quite expensive, could this be a new alternative? Artworks have become investments and over time they can gain value so could this be a new way to generate wealth?

Final Words

Blockchain is no stranger to the art market as it's used to solve some of its biggest problems such as provenance, authenticity and valuations.

How will investors respond to this? Are they becoming open to new ways to expand their portfolio? Only time will tell.

There's no doubt that this new way of buying art could appeal to some and infuriate others but perhaps this will lead to more art auctions utilising cryptocurrency. 

What are your thoughts about tokenising art?

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First Blockchain Art Auction
First Blockchain Art Auction
First Blockchain Art Auction