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A New Era: The Democratization And Decentralization Of Art Through NFTs

As part of the Art Moments Jakarta Conversation Series, TZ APAC’s Katherine Ng joined curators, collectors, and artists to discuss the continued rise of NFTs, and how decentralization using Proof of Stake blockchain platforms like Tezos result in better outcomes for all.

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Introduction

As part of the Art Moments Jakarta Conversation Series, TZ APAC’s Katherine Ng joined curators, collectors, and artists to discuss the continued rise of NFTs, and how decentralization using Proof of Stake blockchain platforms like Tezos result in better outcomes for all.

If all art is experimentation then the rise of NFTs, and decentralized and democratized ownership of art through the blockchain, is arguably the art world’s biggest experiment in decades.

NFTs – Non Fungible Tokens – have created a gold rush-like boom for artists while simultaneously giving others in the arts sector some knotty problems; how is art valued in a digitized, decentralized world, and does the blockchain beckon as a new Renaissance or a digital Dark Age for art and artists?

Defining democratization

As part of the Art Moments Jakarta Conversation Series, a diverse panel including a curator, collector, artist, and TZ APAC’s Katherine Ng took part in a panel discussion to shed light on the art world’s biggest questions around digital ownership – or part ownership – of artists’ works.

Moderator and Director of the Chan+Hori Contemporary art consultancy in Singapore, Khai Hori, kicked off the conversation with a question to the panel; is the democratization of art occurring, and are NFTs the answer?

Access to the art world has long been the domain of two groups; the artists that create art and the (traditionally wealthier) people who collect it. According to Ng, the rise of decentralized platforms like Tezos – used to mint NFTs – has disrupted access to art and created a much broader, larger market for artists to sell to.

Katherine Ng commented:

“The blockchain, and NFTs specifically, have allowed artists to connect with their communities more directly without relying on galleries.

But when we talk about democracy in the way we know it today – for example, representative democracies – then we’re still talking about some sort of centralized authority and governance at play.

In the context of NFT’s and art, that’s really the distinction between democratization and decentralization. Democratization still requires that layer of centralized governance, so it may work better for organized art funds.

Decentralized solutions like NFTs minted off Tezos can bypass centralized governance and instead validate ownership through the Tezos network.”

Expanding on Ng’s comments, twice BAFTA-nominated sound designer and NFT advocate Ruanth Chrisley Thyssen was quick to agree, acknowledging the differences that already exist in the world of blockchain as the sector attempts to wrestle with problems around what democratization means.

“Every blockchain has its rules, and after mining Ethereum (ETH) for five years, I realized that the people with the most ETH have a lot of say in what happens to the Ethereum blockchain. One could argue that’s not true democratization – it’s very much a top-to-bottom arrangement.

And the reason I raise this is that it’s important to understand, practically speaking, that different blockchains have different levels of democratization and decentralization.

With a blockchain like Tezos, it’s different because of the way the blockchain is built; it’s Proof of Stake versus Proof of Work. The way Tezos is built, I see it incentivizing people to verify transactions and verify the block.” – Argued Thyssen.

Indonesian collector and friend to the arts, Detty Wulandari, stated that the rise of NFTs across the established art world faces challenges around democratization. Established platforms patronized by collectors tend to feature the art world’s more prominent names while emerging artists remain relatively undiscovered.

“It’s not like once you mint your artwork that you’ll automatically be seen on certain platforms,” said Wulandari.

Value for artists

The democratization and decentralization of art through NFTs brings focus to one of the art world’s enduring questions; how do artists make money from their work?

Like anyone else, artists need payment for their time and effort. At the upper echelons, noted artists might end up objectively wealthy, yet traditional systems of spruiking one’s wares to galleries and securing well-funded openings – with cashed-up audiences in attendance and ready to spend – remain out of reach for many artists.

According to Hori, two of the most valuable aspects of digital ownership through NFTs are how artists benefit from direct access to potential buyers and how any future resale of their artwork results in additional income.

“The artist, through the smart contract, will get a cut of every resale. Which is very good – it’s like receiving a royalty”, said Hori.

In entering into the world of NFTs to generate income from their work, artists need to be aware of the marketplace NFTs command, which is arguably more complex and diversified than art’s traditional purchase points of galleries and auction houses.

“In fact, this is a marketplace in truth because crypto is linked to crypto exchanges. When the money moves, everyone sees it.”

Moreover, do contracts minted on platforms like Tezos produce better outcomes for collectors and artists regarding transparency?

Wulandari agreed:

“Absolutely, For example, with the way art sales have worked to date, we buy art from a gallery. So a buyer may get to know the artist or vice versa. But sometimes an artist will ask ‘who bought my painting’ and the gallery says ‘no, you can’t know that. So I believe there should be greater transparency in the art world.

Enhancing physical art’s allure and value

The rise of NFTs has seen digital-only artworks minted and sold through online marketplaces and even traditional auction houses.

The most notable digital-only sale to date was the March 2021 purchase of artist Beeple’s digital-only work, The First 5,000 days, to a Singaporean buyer for USD $69 million, through British auction house Christie’s.

While the application of NFTs to digital-only artworks seems obvious, the panel also acknowledged the blockchain’s impact on the ownership of physical art.

According to Thyssen, smart contracts are being used to assign ownership to physical artworks across various mediums, and he’s observed some spirited conversations amongst art world pundits when it comes to democratizing ownership of works by renowned names.

“I was in a [Clubhouse] room once, and there was a collector from the Americas who had a few Picassos. He asked the question, ‘Can I sell my Picasso painting as an NFT?’ A lot of people had negative comments.

They said ‘No, how dare you? That’s the estate’s work’. They said he didn’t have distribution rights.

But he didn’t want to sell a representation of the work. Instead, he wanted to allow ownership of a piece – or multiple pieces – of the physical work as NFTs.” – said Thyssen.

The concept that physical artworks can be part-owned by numerous collectors is not necessarily new.

Still, that open source platforms like Tezos can be used to assign and validate part ownership of an artwork opens up entirely new – and arguably more democratized and transparent – markets for art and artists.

Tezos, art, and artists

Tezos has quickly gained momentum and popularity among artists due to the platform’s eco-friendly Proof of Stake chain, low transaction fees, and passionate NFT community. For artists – cost-conscious, appreciative of the natural world, and who understand the power of community – Tezos comes across as a natural choice.

According to Ng, Tezos focuses on advocating for sustainability in blockchain design. The platform’s Proof of Stake network helps address energy efficiency concerns, which subsequently keeps transaction costs low.

“What we see is that artists are aware of how Tezos’ Proof of Stake structure works, and so they’re quick to advocate Tezos to other artists. That’s part of the reason we have such a thriving NFT community.”

As a curator and President of the Singapore Art Galleries Association (AGAS), Hori is excited about the prospect of Tezos becoming more popular as the NFT trend gains momentum.

“When artists mint or tokenize or attach their physical artwork, as well as their digital artwork, to a smart contract, it helps in the recording of everything that he or she has permitted, whether it gets sold or not because it’s on the ledger.

When curators like me, 30 years down the road, want to curate a show, we can readily access a transparent record of an artist’s practice.”

Thyssen thinks that platforms like Tezos will resonate even more with artists in the Asia Pacific region, where traditional channels hold less sway and individual spending power amongst artists varies against Proof of Work blockchain technologies like Ethereum.

“In Asia, a lot of people can’t afford to pay $35 – $200 to list one art piece. That sort of defeats the purpose (for the artist). If you’re selling NFTs for thousands of dollars, then people don’t care about $50 transaction fees. But if your NFT is much cheaper, that doesn’t mean it’s less valuable. It just means it’s cheaper.”

Embracing decentralization

Asked whether, as an artist, he is concerned with the hypothetical of an owner of his NFT-minted works purposely ‘burning’ a work to increase the value of his other works, Thyssen was quick to double down on the tenets of decentralization.

“No, I think that’s completely legitimate. If we really talk about decentralization, then you have to give the owner(s) of the work that power; otherwise, you’re not decentralizing the art.” 

And that’s where ethics comes into play, argued Thyssen, as to fully embrace the promise of NFTs, artists need to offer up the artwork to art’s new era and all its quirks.

“You commit to that one work, one mint, no matter how many additions you make.”

Ultimately, the most profound benefit decentralized ecosystems like Tezos provide artists and collectors is perhaps the most ephemeral of all; trust.

For the first time, asset owners can move assets between platforms because they can trust that the system is decentralized and no one party or interest holds sway.

And while discussions around the promise and problems of NFTs are still very much in their infancy, it is perhaps artists who are best qualified to uncover the blockchain’s benefits to society as a whole.

Watch the full panel discussion here: 

Disclaimer

Nature of Content: All content published on https://xtz.news, whether written, auditory, or visual, is for informational purposes only. Opinions expressed therein are solely those of the individual authors and do not reflect the views of XTZNews or its management.

Not Financial Advice: No content on this website constitutes investment, financial, legal, or tax advice. Users should not construe any such information as a recommendation to buy, sell, or hold any investment or security or to pursue any particular investment strategy.

Accuracy and Completeness: While XTZNews makes every effort to ensure the accuracy and reliability of information, we do not warrant or guarantee the timeliness, completeness, or accuracy of the information presented. The website may contain errors, omissions, or inaccuracies. We disclaim all warranties, both express and implied, regarding the information, including but not limited to, any warranty of merchantability or fitness for a particular purpose.

Endorsements: References to specific entities, products, services, processes, or other information does not constitute or imply endorsement, sponsorship, or recommendation by XTZNews. Blockchain technology is in a developmental phase, and the engagement with the technology and its associated entities carries inherent risks.

User’s Responsibility: Users are encouraged to conduct their own research and due diligence and to seek the advice of qualified professionals before making any investment or decisions related to content on this site. Engaging with blockchain technology, cryptocurrencies, and associated applications should be undertaken with caution, understanding the inherent risks involved.

Limitation of Liability: Under no circumstances will XTZNews or its affiliates, partners, officers, directors, employees, shareholders, agents, or licensors be liable for any direct, indirect, incidental, special, consequential, or punitive damages, including without limitation, loss of profits, data, use, goodwill, or other intangible losses, resulting from (i) your access to or use of or inability to access or use the site; (ii) any content obtained from the site; or (iii) unauthorized access, use, or alteration of your transmissions or content, whether based on warranty, contract, tort (including negligence), or any other legal theory, whether or not we have been informed of the possibility of such damage, and even if a remedy set forth herein is found to have failed its essential purpose.

Seek Independent Advice: Before undertaking any financial investments, potential investors are advised to seek guidance from independent financial, legal, and tax professionals.

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