I’ve been thinking a lot about the transparency that comes along with transactions happening on-chain. Especially with art this takes some big steps to demystify a lot of what happens behind closed doors in the traditional art world, and the benefits to artists are obvious. While this doesn’t solve every problem, it’s the right steps forward for many. Shining a light onto this part of the business takes a lot of the power away from the dealers and puts it directly into the hands of the artists. It also makes the collectors who are more interested in flipping work a little easier to spot. Obviously this makes some dealers and collectors uncomfortable, but that’s how you know it’s progress. When the people who have traditionally held power start seeing the cracks in their structures, they start complaining.
Conversely, this is also really good for the collectors who are focusing less on the investment and more on the artists. The philanthropists and art lovers. Public ledgers make it much easier to know exactly what an artist wants and needs for their work without having to navigate through multiple layers of middlemen which has typically been the case. Even when dealers would put artists and collectors into direct communication, many were afraid to talk “business” out of fear of alienating a gallery or dealer who might feel threatened or cut out, and thus losing that resource for the future. Again, not every problem is addressed, but this is movement in the right direction.
But I think there’s an even more interesting aspect that hasn’t been widely discussed. We all know that the blockchain provides concrete provenance for the work, we’ll now be able to see everyone who owned the work going all the way back to the moment the artist minted it, or look ahead and find where something ended up. This is exciting because artists often lose track of where work goes once it enters the secondary market, unless the new owners are committed to being public about it, which many aren’t. We’ve all been talking about that for months, but another potentially fascinating detail is the ability to see everyone who ever tried to buy a work. The losing bids, the rejected offers — those are on chain too. At the moment we’re focusing on acquisitions and winning bids, but the story that gets us to that point is far more layered.
Imagine being able to look back in history and see everyone who ever tried to buy a Warhol, or a Basquiat, or a Haring — before they were popular. We know who ended up with the significant works, and work is being done by their foundations to fill in the blanks, but that focus is entirely aimed at knowing where those works are now. But consider how interesting it would be to be able to see the unsuccessful offers. To be able to cross reference those people and find someone who tried to buy work from all three of those artists, but didn’t. Then, being able able to see what work they did buy. Are there artists from that area that have been flying under the radar all these years? Did someone repeatedly get out bid by a specific rival? Were artists supporting each other?
I’m thinking about these on-chain transactions, documenting the bid history as a snapshot of community. Let’s talk about right now. A number of artists who are selling work in the NFT space are talking about how they are reinvesting their proceeds back into the community. They are putting some % of the crypto they make from sales back into the market by purchasing works by other artists. It’s been obvious to anyone paying attention that there is a huge (and important) overlap between people selling and buying work. Collectors are also selling their own art, artists are also collecting their friends work. That’s powerful today, but how about in the future? Think 20 years from now, being able to look back on a sale today with a bidding war between friends. This is evidence of a social network, and the power of a community. This of the forensics this will allow as well — being able to see the exact moment that an artist started gaining momentum. Or pinpoint a single collector who funded an entire group of artists with a buying spree, and how those artists in turn lifted others up with them. We’ll be able to see friend groups and shared interests — and divergences. Again, that’s pretty interesting today but it monumentally more so if a relatively unknown artist today blows up in the coming years.
Today we’re focusing on what all this changes and what is suddenly possible, but it’s all new in so many ways and I think we’ve only scratched the surface on how much this all will really change. I can’t wait.
Originally published at http://blog.seanbonner.com on June 1, 2021.