Art on the Blockchain: From Artist to Investment Portfolio

This article explores the potential for disruption in the art market caused by transformative blockchain technologies, which allow art to be transferred directly from its creator to the investor’s portfolio. Supply and demand factors are identified for an electronic market in which art creators and investors are directly connected through decentralized, peer-to-peer computer networks. Parallels will be drawn with the application of blockchain technology in financial markets. Demand is measured in terms of financial market theory. From a technical perspective, the art market seems ripe for change. Blockchain technology is well established, and other tokens (including cryptocurrencies) are already being traded on the blockchain. From an economic perspective, demand from the investment community for tokenized art seems to be growing, whereas supply from the conventional art community is still limited. For a liquid two-way market to develop, more artists need to make their work available on the blockchain. If art could move directly from its creator to an investor’s portfolio, without the cost and friction of intermediaries, both artists and investors could benefit.