Crypto art, this new way of marketing artistic creations, is here to stay, according to the sales volumes reported by platforms such as Cyptoar.io, which brings together the main art markets, and the latest operations carried out by the prestigious Christie’s auction house. According to data provided by Cyptoar. io in the month of January 2021 alone, more than 10 million euros in sales have been reached, with a growing trend that reached a record value on 11 March, with the sale by Christie’s of the digital work Everydays-The first 5000 days, worth 69 million dollars; a digital file in JPG format by the graphic designer and artist Mike Winkelmann, better known as Beeple, where the artist shows his artistic evolution from his early days of anonymity to the digital art phenomenon that he is today, 13 years old.
But for many this term “Crypto Art” is new and in many cases unknown. Therefore, we will try to shed light on some aspects, showing the new opportunities that the digital world generates for creators and artists, for collectors; as well as the importance of having specialised advice that guarantees from a legal point of view the registration, acquisition and sales of such goods. In short, providing answers to questions of interest to our clients: what is Crypto Art; what can be registered; how does it ensure the protection of the asset; what opinions does it generate in society?
What is Crypto Art?
It is an inclusive movement that allows artists and collectors to protect, authenticate and monetise their artistic creations, not only in the primary sale, but in all secondary sales, which implies a process of tracking them.
This movement has created and put in value, an aspect that is of vital importance and that for many may go unnoticed, a new definition of what “Artistic Creation” means or can mean. This term, which in principle we can all know what it represents, in the digital world, where our society operates and relates, has evolved and has incorporated the term “Non-Fungible token (NFT)”.
What is an NFT?
An example that shows what an NTF is or can be is the first tweet that Jack Dorsey, founder of Twitter, typed on 21 March 2006, “Just setting up my twttr”. This text, of no apparent value to most people at first, meaning “just setting up my twttr”, has become a work of art that has now fetched $2.5 million at auction.
More formally, we can define an NFT, or non-fungible token, as a special type of cryptographic token that represents something unique.
This example shows the flexibility of the concept of artistic creation that artists and collectors can protect, own and monetise. But we can also show other examples that may be closer to everyone, the registration of a music record. Soon and according to the existing news, the band Kings of Leon will market one of their latest albums as an NFT, putting on the market only six copies of it in digital format. In this new scenario, there is no record label behind the release, instead there is a specialised technology-based start-up company called YellowHeart, which will be in charge of putting this exclusive record on the market. To guarantee such fundamental aspects as the ownership or authenticity of these artistic creations, these companies make use of Blockchain technology.
Blockchain to authenticate and protect works of art
Blockchain, the technology that saw the light of day as the backbone of the Bitcoin virtual currency, ensures that all the information that is entered into the chain is decentralised, i.e. an identical copy is recorded in each device that makes up the network and is also immutable, which guarantees the authenticity, protection and traceability of the work against possible plagiarism or improper use, as well as saving time by eliminating intermediaries.
Therefore, unlike traditional art that cannot be traced and where artists or creators can stop receiving benefits after the first sale, with Crypto Art this does not happen, as it allows both artists and collectors to earn rights for future sales, allowing them to benefit from them. In addition, this community being present in social networks allows artists to benefit from an equitable platform to disseminate and market their works globally.
Society and Crypto Art
But what feeling or opinion does this new way of recording and showing art arouse in society and sectors specialised in this subject? Bubble for some; for others fierce capitalism to monetise any work, even if it does not exist physically; a new form of art for others, who compare this new art with other evolutions that have occurred in the past in physical art such as surrealism, or in its case cubism, where Picasso is its greatest exponent of what was this revolutionary current of art, where we cannot forget that in its beginnings it was only accompanied by Georges Brague and Juan Gris. Let us not forget that the value of things is what we are willing to pay for them, and in the case of art, this has been a constant throughout its history.
But, without entering into debates about whether it is the same or not, which could lead us to write rivers of ink about it or enter into a discussion that could lead us to an eternal sleep, what is certain is that an important aspect that could not be realised before is the one related to the way in which we protect our art, is related to the way of protecting and authenticating artistic creations for both artists and collectors, opening an alternative way that guarantees the registration, authenticity and monetisation of creations, in a global technological environment, which has come to stay within the “fourth industrial revolution, that of ICTs”, in which we are immersed.
A challenge for the legal profession and an opportunity for innovation
In this new scenario, having good legal advice becomes essential, both for artists and creators, to guarantee the protection of their works and therefore of the profits from them; for collectors who can acquire works, guaranteeing their authenticity, as well as trace all secondary sales securely thanks to Blockchain technology and Non-Fungible Tokens (NFT).
At Navas & Cusi, we have joined these new challenges for the legal profession, which is why we have expanded our legal areas to the field of new technologies, to help our clients protect their artistic creations, guarantee their authenticity, as well as guarantee the rights acquired in both primary and secondary sales.