centuries old auction houses are embracing blockchain and digital assets, whereby safeguarding art’s authenticity and enabling shared ownership through smart contracts and fractional ownership. The oldest houses, such as Christie’s, Sotheby’s and Phillips, lead this digital revolution and are redefining art’s value and experience in the digital age. But could blockchain-powered platforms themselves disintermediate the auction houses and create new digital marketplaces that function globally 24/7?

Auction houses, those bastions of tradition and opulence, have cast their gaze into the digital realm, intertwining their fate with the immutable ledger of blockchain technology and the ethereal allure of digitized assets. Blockchain, a custodian/bulwark of truth, offers the promise to authentically trace every stroke and canvas by securing art’s lineage, precious jewellery and even classic cars against forgery. Simultaneously, digitization enables ephemeral creations to be gracefully weaved into coveted tokens of ownership — just as the Vatican has been doing with what is arguably the richest treasure trove of artifacts globally, as it creates NFTs and digitizes its collection. This digital ballet transcends physical limitations, inviting a global audience to partake in the shared experience of owning digital marvels. Auction houses, at the forefront of this digital renaissance, blur the boundaries between tradition and the avant-garde, spotlighting transparency, ownership and shared experiences in the evolving world of artifacts.

In the dynamic landscape of digital art, blockchain plays a crucial role as the guardian of authenticity. It secures and validates art’s provenance, ensuring an unalterable record of an artwork’s journey by creating digitized tokens of ownership and representing digital creations with unique cryptographic signatures. Together, blockchain and NFTs establish an innovative framework whereby safeguarding against copyright concerns, fraudulent activities and theft. This transformative duo not only certify the legitimacy of digital art, cars, jewels, etc, but also introduce a new era where artists and collectors navigate a secure ecosystem with confidence and transparency. In the grand performance of art and technology, smart contracts emerge as the virtuoso conductors (not merely orchestrating auctions, bidding wars and secure transfers) but whispering promises of automation and precision. Born from the union of art and technology, these self-executing contracts usher-in an era of transparency and security, eliminating the need for intermediaries and scripting a new symphony of trust. And their reach extends beyond traditional art; digital collectibles and memorabilia find their spotlight, authenticated by the creation of digital certificates. Yet, it is not merely about possession; blockchain-powered NFTs pave the way for shared ownership, so democratizing access to masterpieces. The once unattainable becomes reachable as fractional ownership blooms, allowing many to own a piece of a priceless canvas. Evolving the art sphere, shared and fractional ownership transform the scenery whereby breaking barriers and extending a worldwide invitation for audiences to discover the realm of digital marvels:

· democratization unleashed — the power of shared ownership is unleashed, granting art enthusiasts

the opportunity to collectively own and appreciate masterpieces and indeed other artifacts that were once confined to exclusive realms.

· fractional ownership blooms — the concept of fractional ownership enables multiple stakeholders

to claim a share of digital treasures. Each fragment of ownership represents a connection to an artifact, fostering a sense of collective pride and engagement.

· global invitation — the traditional boundaries of ownership dissipate as a global invitation is

extended. Art, jewellery and automobile admirers from every corner of the world are welcomed to partake in the ownership experience, transcending geographical constraints.

· digital marvels for everyone — what was once an elite privilege becomes a collective joy. Shared

and fractional ownership democratize access to digital marvels whereby turning the art world into an inclusive stage where the collective appreciation of beauty knows no bounds.

In the digital age, artists are able to uncover a renewed sense of empowerment, thanks to smart contracts reshaping their ties to income and leaving a lasting imprint on their creative journey. Smart contracts allow for royalty mechanisms, securing artists a percentage of income when their creations are sold on the secondary markets. Chicago-based artist, Matt Kane, demonstrates the critical role of royalties when, after initially selling NFTs for hundreds, he subsequently experienced a life-changing moment when a piece fetched over $1,000. Kane’s success story unfolds further as he now earns over $13,000 from royalty payments on each secondary sales this year, underlining the importance of artists participating in their own success and receiving fair compensation for the resales of their work. However, one cannot help wondering whether this digital metamorphosis will simply transcend art alone? After all, could this fusion of technology and creativity herald a new era, so drawing back the curtain on ownership, authenticity and the very essence of value itself?

Meanwhile, what are some of the oldest auction houses in the world actually doing in relation to blockchain and NFTs?

· Christie’s

Founded in 1766 by James Christie, this auction house conducts over 350 auctions around the world each year in various categories, including fine arts and jewellery. Christie’s has indeed embraced blockchain and NFTs, starting in March 2021 with the record-breaking $69.3 million sale of Beeple’s NFT. This unexpected success led to the establishment of Christie’s 3.0, a fully on-chain Ethereum NFT art marketplace, showcasing digital-native and traditional artists. The blend of centuries-old auction expertise with cutting-edge blockchain technology is arguably repositioning Christie’s as a pioneer in the evolving art market.

· Sotheby’s

Founded in 1744, it conducts business in 40 countries and ventures across 70 distinct categories. Partnering with Ledger, Sotheby’s has embarked on a journey to secure integration of blockchain technology, addressing digital art’s authenticity and ownership challenges. Exploring the use of NFTs and the Web3’s decentralized landscape, it brings legitimacy to the digital art world. Moreover, on July 26th, 2023, Sotheby’s launched the on-chain Gen Art Program, recording NFT sales on Ethereum. This shift signifies a move to fully on-chain metaverse auctions (utilizing a Dutch auction model) and a focus on the artistic expression of generative art.

· Phillips

Founded in 1796 by Harry Phillips, the auction house has evolved into a global auction house and made history in April 2021 with the sale of Mad Dog Jones’ NFT for over $4.1 million; this marked the beginning of Phillips’ strategic embrace of NFTs. In May 2021, Phillips auctioned Sarah Meyohas’s, Bitchcoin, showcasing Phillips’ commitment to innovation and its pivotal role in shaping the future of art collection.

· Bonhams

Established in 1793, Bonhams is the only globally recognized auction house under private British ownership, organising over 400 specialized auctions annually across 60 categories worldwide including NFTs. On behalf of Left Bank Pictures, Bonhams auctioned off props from award winning show, “The Crown”, with proceeds going to funding of the Crown Scholarship at the National Film and Television School (NFTS).

· Heritage Auctions

Was set up in 1976 and specializes in collectibles, conducting 400+ specialized auctions annually. Privately owned, it maintains a substantial online presence with 1.5 million registered bidders across 195 countries. Heritage Auctions was also responsible for the world’s first emoticons via NFT.

In addition, art auction houses embrace blockchain for transparency by using the Blockchain Data Platform for secure transactions, including sales tax and ownership tree records. Blockchains offer the promise to help minimise the challenges of forgery by using cryptographically created tokens and tools such as “Articker” to track market trends and emerging talent. Traditional houses act as innovation labs for digital assets, AI and governance tools, addressing challenges such as regulatory compliance, new methods of payments and also supporting new art forms. However, blockchain-powered platforms may equally bypass auction houses for NFT sales and hence offer digital market places which can trade 24/7 at a fraction of the costs that traditional auctions houses would levy. Museums, such as the Musée d’Orsay, engage audiences through blockchain, exemplifying art’s modernization, but whilst these new forms of digital assets offer opportunities for auctions houses, blockchain technology may well indeed disrupt traditional auction models. Direct transactions reduce auction house relevance and so disintermediate auction venues that have largely been unchallenged for hundreds of years. But blockchain technology does enhance art provenance and transparency, all the while opening up a global audience streamlining the processes and reducing costs. This must surely be enticing to tech-savvy (typically younger) buyers of artifacts! Notably, success stories can include:

· the Museum of Fine Arts, Boston, collaborates with LaCollection to create NFTs of impressionist pastels by renowned artists such as Monet and Degas. This innovative initiative aims to raise funds for conserving two precious paintings by Edgar Degas in the museum’s collection.

· a carpet presented by the United Arab Emirates as a gift to Pope Francis was sold as an NFT, raising $80,000 for Afghanistan.

· Thyssen National Museum in Spain partnered with Olyverse to mint NFTs of Van Gogh’s iconic artworks and in doing so was the first national museum in Spain embraces NFTs, showcasing the convergence of art and technology.

However, museums and galleries do need to exercise caution — the Uffizi Gallery in Florence, Italy, has faced challenges in its NFT venture with Cinello. Despite selling an NFT based on Michelangelo’s, ‘Doni Tondo’, for €240,000, the gallery only received €70,000 due to production costs and revenue sharing. It is important that owners of artifacts, who wish to digitize their property have transparency in their agreements, understand the digital rights they maybe parting with and manage public perception. Industry experts emphasize the need for clarity in revenue-sharing models, adherence to existing laws and careful consideration of the digital transition’s impact on heritage and ownership. Institutions must navigate complexities to ensure a positive and responsible digital transformation.

In the burgeoning realm of blockchain-powered art, auction houses stand on the cusp of a profound transformation. Beyond adapting to change they are shaping a future where blockchain ensures authenticity and transparency, and this unfolding digital era heralds sustained growth and innovation so promising heightened security, operational efficiency and novel global engagement. Auction houses are evolving into tech-driven platforms, redefining how art is valued, sold and experienced in the digital age.

As the digital canvas expands, one must wonder how this technological metamorphosis is redefining the very essence of art’s worth, and our connection to it…

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