I'm speaking with Colin Johnson, CEO & Co-Founder of Freeport, and we will delve into the benefits of utilizing blockchain technology to foster a more comprehensive art market. For example, the process of fractionalization in art, made possible through tokenization, allows individuals to invest in a fraction of a masterpiece instead of acquiring the entire piece for millions of dollars. This development has increased the accessibility of art to a broader demographic.
Blockchain technology has the potential to address various challenges prevalent in the conventional art industry, including but not limited to matters of origin, dissemination, and communal engagement. Furthermore, it can facilitate equitable remuneration for artists in exchange for their creative output.
What are blockchain technology's most significant advantages in creating a more inclusive art market?
Blockchain technology enables simple fractionalization, global distribution, and easy discoverability - all of which lower barriers to entry and allow collectors to begin their journey into the art world. Fractionalization, in particular, allows those who don't have enough money to afford expensive investments to pool their money together and gain access to them.
How can shared ownership of art through tokens make art ownership more accessible to a wider range of people?
Fractional ownership of art - powered by tokenization - can make art more accessible by letting people invest in a portion of a masterpiece rather than needing millions of dollars to purchase the entire art piece. This lowers the entry cost for potential investors and allows expensive assets to be accessed much more easily.
How do you see blockchain technology changing the traditional art market, and what potential benefits or drawbacks does this transformation pose?
Blockchain will help solve many issues within the traditional art market, including provenance (you will always be able to know where a token originated and where it has been), distribution (you can swap tokens from anywhere in the world), and community (you can easily identify other collectors, and shared interests). Living artists can now create experiences for their customer base, unlike anything we've seen before. As more assets are represented on-chain, more people will be able to partake in the financial markets of those assets.
In your opinion, what role do digital art galleries play in making NFTs and blockchain-based art more accessible to the public?
There are two core reasons to invest in a piece of art: because it is aesthetically and emotionally pleasing and because you want to see investment returns at some point in the future. Digital art galleries allow for the first benefit to come to life from anywhere on earth without investors needing to visit a private museum or collection to view their art. These digital galleries also allow for the augmentation of the original art by portraying it in creative new spaces, further expanding the blueprint for collecting and ultimately making it more publically accessible.
How can NFTs help to ensure that artists are compensated fairly for their work, particularly in cases where their art is resold in the future?
Every living artist right now should be exploring NFT technology as a medium for this reason alone. Within the fundamental smart contract that powers an NFT, creators can set a resale fee that always gets redistributed to the artist's wallet. So, if one of your digital pieces of art ever gets resold in the future, blockchain can track that transaction and, via the preset criteria encoded in the NFT's Smart Contract, ensure the artist earns a piece of the sale. Some platforms try to find workarounds for this code, but most still respect it.
Do you believe that the growth of tokenization and blockchain technology will eventually lead to the democratization of the art market, or do you think that it will remain a niche area for collectors and enthusiasts?
Blockchain will lead to the democratization of increasingly high-value assets as time progresses, and art is no exception. Over time - and especially with the advent of AI art - regular people will continue to learn that works created by real, physical humans give our culture meaning. Now that the fruits of that labor can be accessed by not just multimillionaires (thanks to tokenization), a new wave of collecting will open up. The impact on the art market will not be insignificant.
How does blockchain technology impact the art authentication process, and what new challenges or opportunities does this pose for the industry?
As it stands, any physical piece of art will still need a layer of human trust - some verification that the underlying asset is there, that the team managing it is responsible, and that it is insured. That process often involves appraisers, SEC filings, and documentation. Any reputable platform will still provide these standard safeguards.
For digitally native assets, blockchain records a timestamp of when something was created and what wallet/smart contract was created - meaning there will be a perpetual, unbroken chain of custody for anything with a digital provenance on-chain. This means far more of a story can be told to prospective buyers about the lifecycle of the art asset - and humans love a good story.
How do you see the relationship between traditional and digital art galleries evolving as NFTs and blockchain technology become more mainstream?
Already you can see many physical galleries - like the PACE in New York City - installing monitors and screens that display NFT-based art. The smart traditional galleries will invite this new wave of artistic potential into their spaces and find new and creative ways to display their physical art in the digital realm. Digital art galleries have been slower to bring representations of physical art into their domains, but this can also be expected - especially as new forms of communal ownership demand it.
How can NFTs and blockchain technology help to reduce issues with art forgery and counterfeiting?
NFTs are an absolute receipt of when a certain digital action was taken - meaning anyone who understands how to interpret metadata from the smart contract can confirm how many there are, where the NFT came from, and where it's been, along with other details. While digital art can easily be counterfeit visually, that receipt function proves absolute digital provenance.
In what ways can NFTs and blockchain technology contribute to a more diverse and representative art market, and what challenges need to be overcome to achieve this?
Many new platforms allow for discoverability now (OpenSea, LooksRare, Manifold, etc.), meaning even those artists who have been historically underrepresented can get their work out there in front of millions of collectors. Crypto also allows for direct payments from peer to peer, meaning it's far easier to run a business as an artist without setting up and managing other storefront elements like payment processing. For example, you require a certain amount of Ether and can get paid directly to your wallet.
There are still challenges to overcome - including awareness within marginalized communities worldwide. However, the underlying infrastructure will make it far easier to discover and monetize your talent.
Thank you for speaking with me Colin Johnson