How Blockchain Could Deliver Artists to the Promised Land

Artists create to express themselves. But let's be honest: Not everyone creates art for art’s sake. Yet it isn’t easy making money from art—hence the expression "starving artist." That’s where blockchain can offer a new paradigm, the democratization of art, just as it’s democratizing finance and other industries.

Artists across numerous disciplines, such as literature, music, drama, and the visual arts experience varying degrees of financial viability. Film and music tend to be the most commercialized forms of art, considering how prevalent they have become in our culture—whether an evening watching Netflix or a Spotify-powered workout, they are everywhere. Because these categories of art are so commercialized, artists that fall into them tend to struggle less with building sustainable streams of revenue. Thanks to the development of the "creative economy," artists across the spectrum could derive an income of a sort.

But while the creative economy has grown in recent years,  allowing many artists to earn a reasonable income, those who sell art pieces are unable to generate revenue easily outside of the established world of industry vendors. A painter selling an art piece, for example, is encouraged to work with a gallery or a platform that sells paintings; a photographer is compelled to either sell her photos herself or work with platforms like Shutterstock, and an author typically works with a publishing house. 

Vendors, however, take large cuts. Shutterstock, for example, only pays up to 30 percent of sales to the artist. Authors who publish the traditional way earn only 10-12 percent royalties, according to Self-Publishing School. On Apple Music, artists typically receive $0.00783 per stream, according to Ditto.

If a song is streamed 1 million times, an artist earns about $7,350.

All of these scenarios have one thing in common: The artist sacrifices control of his or her work in return for the hope of profit. Decentralizing these relationships has the potential to revolutionize how artists get paid, which will lead to more art being produced, and the vehicle to do that is blockchain and the tokens that power it.

Let's consider the use of tokens, specifically non-fungible tokens (NFTs), as a tool to open a new world of possibilities for artists to turn their work into virtual assets that can easily be purchased and traded. NFTs act like digital certificates providing authenticity and uniqueness to collectibles and other items powered by a blockchain network.

They can represent asset classes or collectivized groupings of items and beyond. Regardless of the type of NFT, users are able to fully own these verifiable and unique items directly on the blockchain.

The blockchain network itself is a stakeholder system, wherein artists and buyers work together to maintain a strong ecosystem without a central authority.

In such an ecosystem, artists are empowered to retain a much larger percentage of the revenues from their sales.

It would also enable them to fundraise for art projects via tokenization. Using certain types of tokenization mechanisms outside of NFTs, artists could raise capital for projects and allow buyers to share in its ownership. Before blockchain's creation, this opportunity was too technically complex to undertake.

Tokens would also allow artists to have more fan participation into their projects, generating more interest and fostering communities around the artist, a series of works, or individual pieces. Artists would collaborate with developers to build communities of all sizes on the blockchain. And with new developments like Polkadot's hub-and-spoke network, where "parachains" in the community can communicate via a central hub, artists could even create their own small chains and connect to a larger network to sell and transfer all types of tokens.

Platforms like Photochain are already making inroads to this new decentralized future, offering about 70 percent of the item revenues to the users. Others, such as Audius and Fenix are following close behind. As artists become increasingly more aware of the market potential of NFTs and blockchain, they will flock to these platforms to sell their work.

Some have already started. In January, CoinDesk reported that NFT art sales reached an all-time high of $8.2 million in December of 2020, a trend that will surely continue and expand across the spectrum of the arts.

The industries commercializing the arts may be massive in size, but at its foundations are the creativity and talent of the artist that hold the most value.

Whether artists are struggling or making millions, the power to generate revenue from their work should be in the hands of the creator, not a middleman. With blockchain technologies, this is not only doable, but inevitable.