A real-world application for managing authenticity of physical art using blockchain technology
Photo by Gabriela Gomez on Unsplash
I took my first tentative steps as an art collector when I bought my first limited edition print.
I chose the piece because I liked how it looked and related to the subject matter — it was a limited edition print of a tour poster for the band The Raconteurs, created by artist Rob Jones. Its rarity value was of secondary importance to me but I’d been schooled by my mother — herself an accomplished artist — that a limited run print is worth paying a little more for. And so I did.
A few years later and I’ve no idea if it’s worth more or less than what I paid. If its value has appreciated then surely the fact that it’s one of only 100 authentic copies should count for something?
Maybe a couple of the run have been lost or destroyed? One of them may have appeared in the background of a Hollywood photoshoot? The artist may have risen to fame or stopped creating, heightening demand for their work?
Any of these events could have increased the value of my print. If I were ever to decide to sell it then I’d need to prove it’s authenticity — that’s when things could get a little tricky.
Proving authenticity of artwork
The more I speculate, the greater the urge I feel to search online to find out what my print might be worth. At the same time it occurs to me that I possess little in the way of evidence to prove its rarity or provenance.
Somewhere in my inbox there’s an email receipt for its purchase. I know that sealed within its frame is the hand-written receipt from the gallery where it was originally sold (I bought it off another collector who was the first to own it). There’s a hand-written pencil signature on one corner of the print and a number (10/100) in the opposite corner, denoting it as part of a limited run.
But that’s all I have. It’s not a lot really, is it?
If challenged or if it turned out by some miracle to now be worth thousands I wouldn’t feel particularly comfortable defending its uniqueness and authenticity to prospective buyers.
If only I possessed a digital, irrefutably unique token that corroborated to the physical thing.
If only I had an NFT corresponding to the print.
Non-Fungible Tokens
If you have even a passing interest in art or blockchain technology you’ve likely encountered the idea of Non Fungible Tokens, or NFTs. They are unique digital tokens that are minted, stored and maintained on the blockchain (typically, but not solely on the Ethereum network). Each NFT corresponds to digital creations — images, text, video and so-on.
I’ve written a number of pieces on NFTs that may help fill in the gaps if you’re curious. In these pieces I’ve covered what they are, how they represent the next revolutionary medium for art and how to create your own should you wish to — I created some of my own as an experiment.
When someone buys an NFT they’re buying ownership rights to a digital record corresponding to the original artwork. The popular misconception (and one that I’ve fallen foul of myself) is to think that the NFT corresponds to ownership of the original artwork itself — the text, image, video or audio file, or the code. It can correspond to these too, but it doesn’t have to.
Ownership of the token, not necessarily the artwork
When I created my NFT I decided I’d be selling the original digital image file along with the token, my intention being to send the buyer the original raw image file and to delete it from all places where I had it stored once the transaction was complete.
That’s still my intention I should add, in case you want to buy one of the NFTs that I’ve minted!
In the process of minting the NFT I’ve created the digital token itself which is stored within the blockchain and against which future changes in ownership will be recorded as it sells to a buyer, moving into their custody. The record would be further updated in the future if that buyer sold it again.
An NFT for a digital image doesn’t prevent the image file itself from being copied, reproduced and printed many times by its owner and others who decide to create their own copies. Indeed I doubt this feat of protection could even be accomplished for an image that exists in the public domain— consider how many copies of the Mona Lisa (digital and in print) exist around the world today, official and otherwise?
An NFT for a tweet, such as the first tweet ever sent by founder Jack Dorsey is an NFT representing a moment in internet history. It doesn’t mean that whoever bought it owns it to the extent that they can prevent people like me from reproducing it by embedding it in an article (as I’ve done below).
An NFT for a Kings of Leon album doesn’t mean the owner of the token will have sole ownership of the digital audio files or that they can prevent others from listening to and enjoying it, or stop the band from performing it. The buyer owns the original NFT which in itself is deemed to have artistic value for a KOL super-fan — the band owns the music.
The NFT is held within the blockchain and is itself what’s bought and sold. It records irrefutably and for all time the changes in ownership of the token corresponding to the artwork from the moment it was minted, for all time.
The Tweet (not the NFT) that sold for $2.9m (Source: Twitter)
An NFT can be more than just the token
With that said, it’s in the gift of the creator of the NFT to bundle more along with it. The Kings of Leon have included fan bonuses such as front row tickets to their concerts for those who own their NFTs, for example.
This is where the concept of an NFT can become confusing.
Particularly in relation to digital images, to purchase an NFT could seem pointless — why pay for ownership of a token corresponding to an image file that could be easily and uncontrollably copied digitally and printed multiple times?
The answer lays in the status of ownership — in being irrefutably recorded as the owner of the original item, even if other copies exist. But an NFT can also be used to confirm the authenticity of a physical manifestation of an artwork such as a limited edition ‘official’ print of a digital image. This seems to be one of the more compelling use-cases for conventional artists to mint NFTs when offering their digital artwork for sale.
NFTs for a limited edition run of prints
I set out to learn more about this concept following an email sent to me in response to my ‘how to’ article. A creator in Brazil contacted me to propose a partnership for selling limited edition prints of his original digital art using NFTs — an opportunity that I was flattered to explore. You can check out their awesome abstract artwork on Instagram (improvvisato_fineart):
Having done some research into the way that NFTs could be used to track and manage the issue of limited edition print runs of physical artwork, here’s how I see it working:
The creator decides how many ‘prints’ they wish to offer of a particular creation — in this case, an image (e.g. a limited edition of 10 prints of a digital artwork).
An NFT is minted for each of the intended items in the run (so, 10 NFTs)
Each NFT is offered for sale as a separate token (1 of 10, 2 of 10 and so-on), listed to explicitly state that the ownership of the NFT entitles the owner to a numbered and authenticated physical print of the artwork as well as the NFT recording it as original.
Once the NFT sells, ownership transfers to the buyer (and is recorded on the blockchain) — the smart contract associated with the NFT confirms this transfer, and writes it to the NFT’s record.
The creator and the owner can co-ordinate between themselves for the production of the physical artwork as and when it suits each of them for these to be produced. The new owner might want this to be done immediately if they want to display the piece, or it may suit them to hold-off if they bought the artwork as a speculative investment.
The same principle can easily be applied to any creation other than digital fine art. It’s based upon the premise that the creator wants to provide their customer with the actual artistic content to accompany their NFT, but also wishes to formally restrict the number of official copies that are in circulation.
For clarity, it remains difficult to restrict unofficial copies of the digital artwork from being produced over and above the official copies — just as I’ve included a screenshot of the artwork above for inclusion of this piece, once a digital image file is released to the internet there’s no means of stopping others from using and reusing it.
The difference is that NFTs offer a means of controlling the issue of official copies and tracking the ownership and movement of these as they are traded by collectors and speculators on the open market — via the NFTs and their blockchain records.
Benefits for the creator
The advantages for the creator of using this approach include those that apply to NFTs more generally, but there are enhanced benefits too:
They enjoy the opportunity to connect with their fans — the NFT offers a line of connection and communication between the creator and those who appreciate their work, even if those are speculators rather than true fans.
The NFT provides a ledger that guarantees the authenticity of limited edition items since it records (for each instance of the edition) who owns it at any point in time. In this way, it kind of doesn’t matter if (using the aforementioned example) anyone possessing an unofficial copy were to create their own copies and re-sell these on, claiming them to be authentic. The blockchain provides a complete and irrefutable record of ownership of the truly legitimate copies. Without owning the corresponding NFT, you don’t own the official artwork whether you possess a print of it or not.
It enables the creator to benefit from future sales — in the minting process it’s easy for the creator to stipulate a percentage of sales proceeds that will be routed to them if the NFT is sold on again in future. This is written in as part of the smart contract and is executed automatically on each sale of the NFT. It doesn’t require the creator to keep tabs on each artwork to monitor this and claim their royalties.
It doesn’t prevent copies of their artwork from being created or reproduced digitally, but it prevents others from representing such copies as genuine.
It allows them to focus on what they are good at — creating.
Benefits for the owner
The NFT provides the immutable token that confirms they own the artwork itself should they wish to verify authenticity for the purposes of selling it on at a later date.
It allows them to connect with the creator and register their support.
In the example described above the owner could theoretically hold off requesting the physical copy until a future time. The creator then becomes the custodian of the physical representation until the owner wants it.
Consider the example of my limited edition print from earlier.
If I held an NFT associated with the print in my crypto wallet then it would become a lot easier to prove its authenticity and to offer the piece for sale to a discerning buyer. They would recognise my ownership of the physical artwork via my ownership of the associated NFT. The NFT itself would contain within its blockchain record, the movement of ownership of the piece from its creator, to the first owner and then to me.
A prospective buyer wouldn’t be reliant on a hand-written receipt for proof of authenticity. Through buying the print and taking ownership of the NFT associated with it as part of the transaction, they’d irrefutably own the genuine piece.
Case study: Signe Pierce — A Visual, Digital and Performance Artist
I encountered Signe Pierce’s creative work when I heard her being interviewed on the A16Z Podcast. She sells her digital creations including limited edition print runs of photography via the Foundation exchange.
Foundation enables NFTs that have been minted by artists to be traded as though on an exchange (rather than, say, OpenSea where NFTs are auctioned using a model similar to eBay). Signe may release a series of her NFTs corresponding to editions within a limited print run of an artwork and these are then tradable on Foundation. Each time an NFT is bought or sold, Signe gets a cut of the proceeds of the sale as the creator of the NFT. She will liaise direct with the NFT owner when creating the unique physical print corresponding to their NFT and at the point it’s produced, they take custody of the physical artwork.
She still sells conventional limited-edition prints in galleries but these are priced differently and targeted towards a different market. Her approach to the marketing and selling of her creations flexes to the preferences of different market sectors. The net effect is that her artwork reaches as large a range of consumers as possible and she’s compensated financially through each channel of selling. It allows her to create and sell a wide variety of media — as can be seen below:
Source: Twitter
Takeaway
Blockchain technology is still comparatively new and its potential for application in the NFT space is still emerging and evolving. Availability of the technology doesn’t necessarily guarantee that potential users who could benefit from its use will immediately start to do so. The use-cases for it need to emerge and be adopted gradually. Many of these will almost certainly intersect and overlap with conventional channels.
Such overlaps may be the means by which usage and take-up increases, as more and more people see the potential of NFTs on blockchain and understand its potential applications. The use of NFTs in conjunction with a conventional means of marketing and selling digital artwork via limited edition prints is a good example of such a use. How quickly this grows, remains to be seen but I think that good potential exists.
Note: This article is for informational purposes only. It should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.
This article was originally published here on Medium. Toby Hazlewood can also be found on Twitter or at tobyhazlewood.com/.