Crypto Art For the Crypto Wealthy: Engaging New Generation of Art Patrons

  • Katya Michaels
    🎤 Interviews

    Digital records of authenticity and unique digital art are certain to change the nature of art collecting

Crypto Art For the Crypto Wealthy: Engaging New Generation of Art Patrons
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Just a year ago, fine art was one of the more obscure subjects for Blockchain application, but in recent months discussions about how this new technology can help move the venerable industry forward (and bring in new sources of revenue) have heated up, with major players like Christie’s, Art Basel and Britain’s DACS joining the conversation.

In the world of fine art and other collectibles, the investment potential of a particular piece is largely defined by its provenance and authenticity. The existence of immutable, indestructible records on the Blockchain may encourage more people to see art as a viable and trustworthy long-term investment opportunity.

Perhaps even more intriguingly, Blockchain opens the door for digital art as an investment through the introduction of digital scarcity. A piece of code representing some form of artistic expression can be certified and stored as a unique digital object– an idea which is quite a leap from the “copy-paste” digital world most are accustomed to.

The concept is quite new, and the most profitable sale of a purely digital artwork to date may have been that of an exclusive CryptoKitty auctioned off at the Ethereal conference this summer for a very respectable $140,000. The auction in question was the first practical demonstration of the Codex Protocol, a decentralized registry for assets including not just art, but also fine wines, watches and other collectibles. CryptoComes spoke to Codex CEO Mark Lurie about his impressions from the auction and expectations of the protocol’s development.

Codex– the provenance scrolls

Katya Michaels: What is the main purpose of the Codex protocol? How has this been demonstrated at the Ethereal auction?

Mark Lurie: Codex is a decentralized registry for unique assets focused on art and collectibles in particular. It's really needed because this is the only asset class without a title registry, but a system of record is very important because the value of the piece in art depends on its provenance and history of ownership. Codex is a place where that information is stored and tracked. Once you have the title, you can access insurance, shipping, artists royalties, appraisals.

At Ethereal, we launched our bidding application and gave out the first Codex titles. I think the excitement about the auction proved that the crypto people want to buy and invest in art as an asset class, especially if you give them an easy way to bid and track ownership.

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The CryptoKitty code

KM: Historically, patronage of the arts had been undertaken by contemporary elites. Today’s tech entrepreneurs seem to be in that position, but the question is how the art world can attract their interest. Will crypto and blockchain technologies encourage them to get involved?

ML: Collecting art is human nature. You just need to deliver the kind of art that appeals to the new generation of wealth. In the case of tech, maybe they don't like the same things that the traditional art industry has been selling them, but they clearly like CryptoKitties, they like digital art and they like the idea that digital art can be scarce.

When you can make digital art scarce and when you can prove original ownership of unique art, it becomes an asset class that has value. Digital art is a really exciting new category. At the auction, we sold about $190,000 worth of digital and physical art. For the crypto community, it’s exciting to see a way to buy art that is most convenient for them, as well as a way to be confident about the resale value of what they buy over time.

CryptoKitty by Guilherme Twardovski
CryptoKitty by Guilherme TwardoWski

KM: Out of those $190,000, $140,000 was brought in by the CryptoKitty. Can we consider it a win for art– that the biggest sale of the auction was a digital cat?

ML: I think we can consider it a huge win. It proves that digital art is going to be a big art investment category and that artists are going to be able to make a living producing it. It's a whole new medium. That's very exciting.

A fair share

KM: Do you believe that Blockchain platforms will facilitate not only big auction purchases but also create new revenue streams for less known artists producing smaller works?

ML: Absolutely. This is one of the things Codex hopes to make possible.

KM: Perhaps it could also enable artist “ICOs”– mechanisms through which an artist could raise money for their next project by selling shares in the work.

ML: I think the idea of benefactors or the public commissioning art is something that's as old as time. Artists could certainly do an initial art offering. This can also be done with existing artwork- we have already partnered with a few companies that will sell shares in pieces to be owned collectively. People who have a Codex title be able to easily access fractional ownership clapboards.

Garbage in, garbage out

KM: Though highly secure and immutable, Blockchain is still a database– once the information is in there we can see the chain of events, but what prevents people from putting in fraudulent information originally?

ML: Today, it’s not that fraudulent pieces aren’t out there, but that good pieces have good proof of provenance and evidence of authenticity. I don't think you need to stop the garbage. You need to raise up the high-quality stuff. As long as the buyer can see that there's good evidence about the authenticity of a piece, that the item has been validated by the community and that it was sold by Christie's in the past– that’s what we want to accomplish.

There’s an aspect to the Codex protocol where appraisers, artists, galleries and auction houses get rewarded with tokens for validating pieces. They are rewarded for verifying that the information about a particular piece is correct. I don't think it's necessary to prevent garbage. All that's necessary is to empower people to tell the difference between the good stuff and the garbage.

Beyond provenance

KM: What are some of the other ways, besides rewards for validation, that the token is used on the platform?

ML: The utility token is used to access and change the database. If you want to transfer a title, add a lien to a title, add insurance or request an appraisal, those all require tokens. The fees are used for rewards to validators who make sure that the items in the database are accurate and vetted.

KM: What are some examples of third-party applications that can be built on the Codex platform?

ML: There are several partners who have announced applications already. One is an appraisal application, so you can get an overnight appraisal on your piece. Another is an asset back lending application, so you can get a loan against your piece. As mentioned before, there is a fractional ownership platform, so you can tokenize and sell shares of your piece.

Another is a company called Dust that connects physical items to digital records. They spray inexpensive industrial grade diamond dust on a piece. It's invisible to the naked eye, but you can scan the crystalline fingerprint with an iPhone and prove that the piece is actually the one that's recorded on the Blockchain.

KM: How soon do you think will major players like Christie's and Sotheby’s get onboard with ledgers like Codex and crypto payments?

ML: I can't say exactly, but I think it'll be sooner rather than later. Once they see it in action,  once they see the benefits and that it's stable, they'll get onboard.

Ethereum by Terry Cook
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Portrait of the crypto artist

While traditional galleries and auction houses figure out how their business model will be affected by Blockchain art platforms, it is difficult to say where artists will emerge from the fog of rapid technological change. Undeniably, Blockchain holds a lot of promise for giving creators more control over their art and a greater share of the profits. Cryptograffiti, one of the artists who contributed work to the Codex Ethereal auction, shared some thoughts on the issue with CryptoComes over an e-mail interview.

HODL by Cryptograffiti
HODL by Cryptograffiti

KM: Do you think today’s tech elite can become the new generation of art patrons, supporting not just particular pieces but the art industry in general?

Cryptograffiti: Absolutely, however, I think to some extent it's cultural.  For example, my hometown of San Francisco is not known for being at the forefront of the art scene because people don't display their wealth as much as other cities like New York. Many of the SF/Silicon Valley tech elite have made their money while sharing a room with two other developers and another one who sleeps on the couch.  

KM: Is there a particular kind of art the crypto-wealthy audience responds to? Is crypto art more compelling for them?

Stealing the Contents by Kevin Abosch
 Stealing The Contents Of This Wallet Is A Crime by Kevin Abosch

C: I think crypto art has proved to be compelling for a number of reasons. With the subject matter being intangible, it provides identity and emotion to something people are very passionate about. Many are proud of their involvement in crypto and what it stands for and want to put that on display. Artwork, and especially limited-edition artwork, is an investment that overlaps well with the controlled supply of cryptocurrency's beginnings.

KM: What is the most important way that Blockchain changes the art industry?  Establishment of provenance? Protection from theft?  

C: These are huge. Also, democratizing investment in artwork and providing additional revenue streams for artists. And the ones we don't know about yet!

KM: Cryptographic technology makes digital scarcity possible- are you excited about the reality of unique digital artworks? What are some specific applications that you are looking forward to?

C: Yes, however, we have a ways to go.  For instance, right now if you own a digitally rare item like a CryptoKitty and the parent company goes under, what you really own are just lines of code...not the cute cat to which you've grown attached. This will change as the various platforms upon which these projects are based scale.

KM: Does Blockchain open doors to new revenue sources for artists? How about for less well-known artists, who are not participating in the big auctions and multi-million sales?

C: New revenue sources for artists were one of the reasons I was initially drawn to the space.  Several years ago, I started attaching QR codes to street art to experiment with receiving instant patronage from passersby.

While micropayments haven't yet lived up to the hype, they will be game-changing. Poets can charge by the poem, journalists by the article, musicians by the listen. People will tip a driver that lets them merge– any situation where a positive experience warrants a tiny show of appreciation.

Smart contracts will also mean artists don't have to die to earn a living wage. Right now if I want to secure royalties on future sales of one of my works, it is prohibitively expensive due time, contracts and lawyers involved.  

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KM: What would be your advice to fellow artists in terms of joining Blockchain art platforms and accepting cryptocurrency?

C: My advice to fellow artists is to jump in and experiment. Recognize that much like the cryptocurrencies themselves, many of the blockchain art platforms will not survive.  Thus, do some research about the people involved and what they stand for. It's a really exciting time for art + crypto.

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Redefining collectibles

Amidst the excitement generated by Blockchain applications, it’s important to keep in mind that the same principle applies as to any other database or ledger– garbage in, garbage out. An immutable record of an artwork’s provenance is of little use if the record is fraudulent or erroneous to begin with. Undoubtedly, as Blockchain protocols for art records become more commonplace, mechanisms will develop to address such challenges.

Digital records of authenticity and unique digital art are certain to change the nature of art collecting. With an increased focus on art as capital and some collectibles, such as CryptoKitties, existing without any physical manifestation, the relationship between the personal experience of art and its perceived value is likely to be redefined. At any rate, Blockchain art startups are carving out a niche in the global art market, already valued at over $60 bln– something certainly worth considering for the artful investor.

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Between Green and Red: Coin360 CEO Evan Ropp Talks Competition with CoinMarketCap and Future Altcoin Takeover

  • Alex Morris
    🎤 Interviews

    Coin360 CEO Evan Ropp claims that IEOs, stablecoins and institutional money will define the industry in 2019

Between Green and Red: Coin360 CEO Evan Ropp Talks Competition with CoinMarketCap and Future Altcoin Takeover
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During the periods of extreme volatility, crypto enthusiasts try to keep tabs on every single market move. The market visualization from Coin360 vividly shows where the cryptocurrency market is heading at any given moment.

Coin360 CEO Evan Ropp revealed exclusively to U.Today about how he came up with the idea of the instantly recognizable treemap design. He also weighed in on a slew of tangible issues that pertain to his fledgling startup and the overall state of the cryptocurrency market.

U.Today: Hi, Evan! How did you come up with the idea of market visualization in the form a treemap?

Evan Ropp: Actually, the idea is not quite new. This type of visualization is popular on stocks trading resources and we just applied it to the cryptocurrency market. However, the cryptocurrency market is slightly different than the stock market, so we had to redesign some of the features. For instance, on COIN360 you can find filters which are different from other price trackers. Also, we added a function for creating up to five different watchlists, which our users find really helpful.

The website interface of Coin360
The market is plateauing with Bitcoin and altcoins barely recording any price gains, image by Coin360

U.Today: Do you think you can compete with CoinMarketCap and CoinGecko?

Evan Ropp: The main focus of our team is on providing our users with the best experience. We understand that CoinMarketCap and CoinGecko are market leaders. So we just want to develop our product without altering user behavior, but instead making our product faster, simpler, and smoother to use. For that, we update COIN360 and add new features quite often, for example, recently we updated the coin/token card. Also, we are always improving the mobile version of the site to make it work smoother. We are focused on developing our product because I am convinced that in this respect we can get ahead of market leaders.

U.Today: When do you plan to introduce other fiat currencies?

Evan Ropp: We have always had USD in the Base Currency section and recently we have added EUR, GBP and CNY. Additionally, the COIN360 team is planning to launch more fiats: there will be 29 additional currencies. The Base Currency section update is tentatively scheduled for the second quarter of this year.

U.Today: Was it technically difficult for you to implement the auto-update option? Where do you get your data from?  

Evan Ropp: First of all, yes, it wasn’t easy. We needed to rewrite and optimize our back and front end code. Secondly, we have developed our own API which is connected to exchanges. We are gathering all the data on our side. We will continue developing to consolidate our position on top of the market.

U.Today: Do COIN360 visitors use your new bubble-like map? Do you plan to introduce new similar features?

Evan Ropp: We had to remove our bubble-view map. We launched it in September 2018 and it seemed like a great idea. Moreover, none of our crypto competitors had a bubble view, but in fact, its usability wasn't so good. The feedback we got from our users suggested that the treemap and a common table view are way more convenient to use. However, we do have a die-hard bubble-view map fan, so we worked out something special for him.

U.Today: You occasionally post Infographics on your social media platforms. Do you plan to make more of them in the future?  

Evan Ropp: COIN360 is about bringing data in the most understandable visual form. We see that our users and followers really like these infographics as well as the platform itself. So, we are planning to make infographics more frequently and publish them on our Twitter. We will also conduct more complex research to give our users more unique insights.

Bitcoin’s had a wild ride in 2018 with many rises and falls   
One of the COIN360’s recent Infographics, image by Coin360

U.Today: You’ve previously mentioned that Grin is one of your favorite currencies. Do you think it has the potential to surpass other privacy coins?  

Evan Ropp: I really like Grin, it is a breath of fresh air for the industry. Also, I really appreciate that the overall supply is unlimited because Grin uses a linear supply schedule of inflation, so this has users spending not to just hodl. In my opinion, Grin has been adequately developed for the long term and not just for speculative short-run reasons. Can Grin surpass other privacy coins? I believe so, but it has to become more user-friendly.

U.Today: What crypto trends will define 2019?  

Evan Ropp: I’m not a fortune teller, but there are some things that I think are likely in 2019.

First, I would focus on the Initial Exchange Offering (IEO). This may help startups and other companies raise money. There is not enough trust in ICOs, but the names and brands of exchanges can attract new people and money to the industry.

Second, I’d like to mention stablecoins. There are many people who are interested in the cryptocurrency market but they are afraid of high volatility. Stablecoins might be the solution.

Third, you have to look at institutional investors. I hope that we will see more professional services when Bakkt gets launched. If just a small percentage of institutional clients would enter the crypto market I think we’d be looking at a new bull run.

U.Today: Do you get upset when Bitcoin hits a snag and the whole site turns red?

That’s a nice question. I get more upset not when BTC goes down but when the whole site turns red. There is a strong correlation between BTC and altcoins. I hope this will change and altcoins won’t be so dependent on Bitcoin. By the way, when COIN360 turns red I’m just setting custom period of time to turn it to green (laughing).

U.Today: Will Bitcoin remain the biggest currency on your site in the long run? What coin could replace it?

I suppose, that in ten years Bitcoin will still be the number one coin in terms of market capitalization. I really would like to see new technologies and solutions on the market. Hopefully, in ten years, Bitcoin’s dominance will fall to 20% of market capitalization. Regarding particular currencies, I believe in the EOS project. XRP also has nice chances because it has the highest level of confidence from institutional investors.

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