The use of blockchain technology may be revolutionising the art market, enabling the part – fractional – ownership of valuable artworks through platforms like Maecenas, an art investment platform.

This model represents a significant shift in how art is viewed and traded, as it is increasingly being treated as an “asset” rather than solely for appreciation and display.

Maecenas is a marketplace that allows anyone to purchase fractional interests or “shares” in high-value artworks using the platform’s own cryptocurrency, ART.  Investors can acquire the ART cryptocurrency tokens directly from Maecenas, trading for it on exchanges or earning it through platform contributions.

One example of this is Andy Warhol’s famous 14 Small Electric Chair screen prints from his Death and Disaster series in 2018. Valued at $5.6 million collectively, these iconic artworks were tokenised into 6142 digital certificates representing 49 per cent ownership shares.

These fractional ownership certificates were made available for purchase on the Maecenas platform allowing people to bid on and purchase 0.01612 per cent ownership shares in the Warhol artworks for a relatively affordable sum of about 0.37 ART (about $20 at the time).

This trend towards the “assetisation” of art is facilitated by the rise of “freeports” – secure, tax-free storage facilities where high-value artworks can be held without incurring customs duties or other charges. This allows art to be traded as a financial instrument, divorced from its original purpose of public display and enjoyment.

While the volatility of cryptocurrencies can be a concern, the reliability and transparency of blockchain technology in recording ownership and provenance is a key advantage of this model. The immutable nature of the blockchain ensures that the history and authenticity of each artwork can be verified, providing investors with confidence in their purchases.

One of the key advantages of blockchain is its decentralised nature, which eliminates the need for a central authority to verify and validate transactions. Instead, each transaction is recorded on a distributed ledger, maintained and verified by a network of nodes, making it virtually impossible to alter or manipulate the data without being detected.

However, one must question whether the trend of using freeports to treat artwork primarily as an asset vehicle for wealthy investors and collectors is ultimately in the best interest of the art community as a whole.

When artworks are stored in tax-free freeports and traded like financial instruments, divorced from public display and appreciation, does this run counter to the original purpose of art?

While blockchain platforms provide increased access to ownership, the practice of keeping these pieces locked away in freeports to avoid taxes and duties does seem to prioritise their value as assets over their cultural and artistic value to society, raising concerns about whether the interests of the art world are being subjugated to those of the investor class.

This a debate that will likely continue as the applications of blockchain in the art world evolve.

Michael Barrett is a globally experienced business owner and technology expert, based in Brisbane. He specialises in creating commercial websites and developing backend systems, along with delving into the ethical dimensions of AI.

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