Cryptocurrencies are slowly growing as the chosen method to invest in and buy products. Bitcoin has seen a steep rise in recent years with News BTC reporting that the current Bitcoin price is around the $4,500 (£3,400) mark. Yet as governments look to tighten cryptocurrency regulations, financiers are looking to invest their Bitcoins into other ventures. One such avenue is an old investment favourite: the art market.
Using Bitcoin to buy art is still in its infancy but the practice is starting to become widely used. The Dadiani Fine Art gallery in London’s Mayfair district is the first gallery to accept Bitcoin and other cryptocurrencies as a mode of payment for works of art. The gallery’s owner Eleesa Dadiani said of the change: “We are combining old world business ethics and practice with the new world of technology — the current system is becoming stale and needs to be disrupted.”
Ms Dadiani hopes that by opening up the art market to cryptocurrencies, access to market will be much easier. “Cryptocurrencies will provide a bridge from the elitist, centralist fine art market to a decentralised open source world where many more will be able to become part of this exhilarating market.”
In an interview with the BBC, Ms Dadiani explained the process through which her clients could buy art from her gallery using Bitcoin. “I give the client my public key [a long string of letters and numbers] and they use that to send Bitcoin to my account from their digital wallet or Bitcoin exchange.”
Blockchain is the network (or digital ledger) that cryptocurrencies are managed from and it is used by the Dadiani Fine Art gallery as the method of payment. “Blockchain is a borderless, open source, decentralised peer-to-peer network that governments cannot shut down,” Dadiani says. “For me, the blockchain is going to be the biggest thing since the internet.”
Right to Left: “KELLY-ANNE DAVITT: BEACH BALLS AND MELONS”, “NORMAN TOYNTON: PEGGING REALITY” & “THE NOISE: MIKE O’CONNOR”
One of the first exhibitions at the Dadiani Fine Art gallery to be opened up to investors using cryptocurrencies is The Noise by Mike O’Connor, which features six sculptures that use the exhausts from classic Formula One cars. The sculptures are expected to sell for between £25,000 and £35,000.
The attraction of using cryptocurrencies for investing in art is clear when you look at the privacy benefits. FXCM discussed cryptocurrency in-depth with the site detailing how Bitcoin offers a degree of privacy (although it can be traced) as the Bitcoin addresses (for both client and seller) are randomly generated strings of letters and numbers. This would be appealing for art collectors who may want to keep the amount they spent on art a private matter.
Alongside individuals buying works of art, there is a push to use cryptocurrency for the co-ownership of high-valued artworks. Marcelo Garcia Casil, the chief executive and co-founder for Maecenas, is setting up a venture, forecasted to be launched next year, that could permit art owners to sell shares (up to 49%) on the artworks they own. Investors who don’t want full ownership, or those who simply cannot afford million dollar artworks from known artists, will be able to buy shares of the work using cryptocurrency. Shareholders would be able to trade their shares on the exchange once the artworks are sold at auction.
How widespread using cryptocurrency to buy art becomes, will be determined in the next few years. It has the potential to completely change the art market. If it doesn’t take off then The Block Bills series shows that instead of being used to buy art, it could be used as art.