The contemporary art world is in the midst of a technological revolution, with digital art gaining popularity and traditional artworks being transformed into digital assets through the process of tokenization. In previous blog posts, we explored the impact of the digital age on the art world and the emergence of phygital NFTs, which are physical artworks stored as digital assets on the blockchain. Through tokenization, physical or digital assets can be converted into digital tokens that can be traded on blockchain-based platforms, offering numerous advantages for artists. By leveraging tokenization, artists can access a wider audience, monetize their artwork in new and innovative ways, and establish ownership of their creations in the digital realm.
What are the benefits of NFT art?
Digitalizing physical art and depositing it as NFT on the blockchain is possible and according to the Art Basel Report 2022, the NFT market will increasingly enter the traditional art market. The hashtag #phygitalart is very popular on social media and stands for physical objects that are deposited as NFT on the blockchain using an identifier (e.g. QR code). What exactly the advantages of this are, you will learn in the following paragraphs.
1. Increased liquidity
By tokenizing their artwork, artists can sell fractional ownership of their work, which means that investors can buy a small percentage of the artwork rather than the entire piece. This increases the liquidity of the artwork, making it easier to sell and creating a market for artwork that might not otherwise be sold.
2. Transparency and security
Blockchain technology provides a high level of transparency and security, ensuring that the ownership and provenance of artwork can be tracked and verified. This provides peace of mind for both the artist and the buyer, as they can be sure that the artwork is authentic and has not been tampered with.
3. Direct access to investors
Tokenization allows artists to sell their artwork directly to investors without the need for intermediaries such as galleries or auction houses. This provides artists with more control over the sale of their work and can result in higher prices for their artwork.
4. Global reach
Tokenization allows artwork to be sold globally, providing artists with access to a wider audience and potentially increasing the value of their artwork. Buyers from all over the world can invest in the artwork, which can lead to a more diverse and competitive market for the artist.
5. Residual income
Tokenization allows artists to receive ongoing income from the sale of their artwork, as they can receive a percentage of the sale price every time the artwork is bought or sold on the blockchain-based platform.
6. Democratize the art world
Furthermore, tokenization can help to democratize the art world by providing more opportunities for smaller artists to gain exposure and sell their work. By using digital platforms and blockchain technology, artists can reach a wider audience and connect with potential buyers from around the world. This can be especially beneficial for emerging artists who may not have the same access to traditional art market channels.
In summary, tokenization offers a promising new avenue for artists and investors alike, creating a more efficient and accessible art market. By fractionalizing artwork, artists can increase the liquidity of their work and reach a wider audience, while investors can participate in a new asset class that was previously only available to a select few. As the technology and adoption of tokenization continues to evolve, we can expect to see even more exciting opportunities emerge for the art world.
What do you think about tokenized art? Let me know in the comments.
This is the fourth article in a series of eight posts about the impact of tokenization and NFT on the art world. Find below more blogposts and stay tuned to learn more.
- What are phygital NFTs and how do they work?
- Phygital NFTs: The Fusion of Physical and Digital Art Ownership
- Unlocking the Future of Art: The Rise of Digital Art and NFTs in the Art World
- Talking about NFTs and Digital Art
- Phygital Art in Use: Arties x Voka
- Talking about NFTs and Digital Art Part II
- Arties: Pioneering the Phygital Art Revolution through Digital Art and NFTs
Really interesting blog post. Looking forward to your new content! 🙂
Thank you. There is so much more to tell about it. The next post is about a company that sees phygital art as their business model.