Tokenization in the world of art

Tokens and their types

An interesting phenomenon, representing one of the emerging

blockchain trends of recent years, is the 'tokenization', i.e., the

transfer, through smart contracts, of the rights and economic

value of any real-world asset (e.g., a property, a work of art or a

financial asset, etc.) within digital tokens.

The role of tokens becomes particularly important when

applied to assets that are unique, irreplaceable, and

non-interchangeable.

Those that enable their digital rarity to be certified are called

'Non-Fungible Tokens' (NFT).

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Non-Fungible Tokens are, therefore, digital certificates representing real or virtual objects that cannot be replaced and guarantee their authenticity and uniqueness. They are intangible assets with a life of their own and their own autonomous quotation almost always unrelated to the object of which they are a digital representation, although the latter may influence the value of the transaction.

One of the first use cases of NFTs occurred in the world of art (1): their main merit was, in fact, precisely that of being able to transform a digital work, potentially reproducible for an infinite number of times, into a unique, irreproducible and, therefore, 'rare' work with a consequent increase in value and interest.

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What NFTs are

Technically, NFTs represent the certificates of ownership of digital works: the purchaser acquires the digital property of the work (2) and not the actual work of art and this purchase guarantees the possession of one or more rights on it virtual object (e.g., the right to exhibit or ‘perform’ the work, the right to sell, etc.).

The artist, who creates the work of art in digital format and submits it to the tokenization process in order to sell it on the blockchain (directly with the buyer or with sales platforms such as, for example, Opensea, Rarible, Nifty Gateway, etc.) (3), on the other hand, certifies the proof of authenticity/paternity (4), while still retaining the right to make any commercial use he wishes, such as creating and circulating multiple copies, granting access, etc.

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Applications in the world of art

This technology is certainly useful when applied to digital native art, so-called 'crypto art', i.e., all those art forms precisely born thanks to digital technology (computer, camera, etc.) and intended to be reproduced exclusively via digital media.

Quite different is the case when a work is created as a ‘physical’ work (e.g., a painting, a sculpture, an analogue photograph, etc.) and is subsequently digitised/tokenised, perhaps by a third party using a video camera, a digital photograph, or similar tools. The technology, in such a case, makes it possible to trace back the first creator of the NFT, i.e., the person who first tokenized the file, even though this person may not coincide with the creator of the digitised work or with the person legally authorised to its economic exploitation, including its transformation into NFT.

In particular, the object of the sale contract is represented by the NFT only: therefore, not only are the rights on the exclusivity of the ‘soul’ of the work or the copyright (5), not transferred to the buyer, but neither are the typical property rights on the physical artistic product (6).

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The copyright, as well as the 'resale right', i.e., the right of the author of the work to receive a percentage of the sale price of the work on the occasion of sales subsequent to the first sale, in fact always remains with the artist, whether the work is a digital native artwork or a physical work subsequently digitised (7).

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Developments in the 'analogue art'

Due to their characteristics of decentralisation, non-changeability,

and transparency, NFTs therefore naturally find their main

application in the management of digital native works, however,

they seem destined to offer a 'second life' - a digital one - also to

'analogue' native works.

This sector is still far from digitisation compared to other types of

business; therefore, the blockchain-based applications might be

absolutely difficult to accept by the operators involved in this

field.

The aim of AtmospheEre is precisely to demonstrate, through the

description of relevant and innovative applications, how, on the

other hand, these can be useful and have a great impact on

multiple aspects of this sector of the art market as well.

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