We have already learned how to register our authorship in the block chain. Now we have two options, either to commercialize the artwork by the usual means, or tokenize it to give it a digital existence. Let’s see how this last option works.
Token and artwork
The creation of signs that represent real objects is a common and ancient practice. The ownership papers of a house, the shares of a company, the checks, online sales… all these business practices are based on the exchange of signs, and their value lies in the confidence that the issuer of the sign to respect its link to the real object of the exchange.
The same thing happens with the blockchain, with the technological advantages that digitization implies. However, trust in the issuer (or in the current holder) of the token is still necessary, so that the trade of the sign respects the link with the real object it represents.
If an artist tokenizes his artwork, he has to take responsibility for joining token and artwork. For example, if you sell the work, you must also transmit the token to the buyer, and if the work is destroyed, the token must also be destroyed. In the same way, the buyer of the work must guard the token, just as if it were the property papers.
If the connection of token and work is broken, we would be in a case of fraud. For example, if the owner of the work puts the token on sale, and sells it, but refuses to send the work to the buyer. One must be careful in this, since in the digital economy it is easier to protect oneself in anonymity in order to refuse to fulfill the acquired commitments. The buyer of a token, as the online consumer in general, should take extreme precautions and verify the honesty of the seller.
Advantages of tokenization
That said, let’s look at the main advantages of tokenizing an artwork.
First, the blockchain provides a good guarantee of authenticity of the work that is purchased. The seller, although not the artist, can always demonstrate the chain of custody of the token and how the token he sells is really the one that the artist has created to represent his artwork. No doubt he could send the seller a fake, but at least he must have previously acquired the original, which makes the scam very difficult.
Second, the marketing of the token is greatly facilitated and the intermediaries are eliminated. The tokens are immediately marketable. In fact, anyone can place purchase orders on any token, at any time, and the seller can accept them or simply ignore them. For its part, the seller can place a sales order at the price it deems appropriate, and wait quietly for someone to accept it, while enjoying the artwork. You can also organize a public auction in the terms you decide (term, minimum price, etc.), without paying commissions to auction houses.
In the event of the sale, the token holder automatically receives the money, the token is transmitted automatically to the buyer, and all that remains is to send the artwork by courier….
Let’s see now the steps to follow to tokenize an artwork in the Ardor blockchain.
Suppose we have already registered the artwork for copyright purposes. We will use the same Ardor account to create the token, referring to the authoring record file.
We search our data in the Data Cloud, open it and save the hash.
Then we go to “Assets / Issue Asset” and issue the token of the artwork.
If it is a unique work (a painting, a sculpture, etc.), we will issue a single and indivisible unit of the token, called singleton asset. If it were a work with several copies (a series of engravings, for example) we would issue a normal asset with as many units as there are copies. In our case, the original painting of the card Haechi, is a unique work.
We have to make sure to include in the description of the asset all the relevant details about the work. First, your authoring record, that is, the hash that we have copied from the Data Cloud. And also physical details such as dimensions, materials used, artistic technique, etc.
Once the token is created, we can put it on sale immediately. Let’s see two basic ways:
We place a sell order in the Ardor Asset Exchange. We can put it in Ignis, AEuro or Bitswift, or in several of them at the same time. In this example, we will put the artwork on sale in AEuro for a price of € 200.
Now it is our job to publicize the artwork with our media, so that the interested public knows that the work is for sale and how to buy it. The Asset ID must always be included in the information, to prevent buyers from falling into false token scams with the same name. In this case, we should advertise that we sell the card Haechi with the Asset ID 9853049584803280708.
If any buyer accepts the price, we will receive the € 200 automatically, and the token will be transmitted to your Ardor account also instantly. Remember then to also send the actual painting by courier!
Instead of publishing a sale offer at a certain price, we can simply announce the public auction of the artwork with a specific term and at a minimum price. For example, we could announce that the card Haechi, with Asset ID 9853049584803280708, will be sold to whoever offers the highest price before November 15, provided that this price is higher than 200 €.
In that case interested buyers will place purchase orders at the price they want, knowing that only the highest will be accepted.
On November 15 we can find an Order Book with several offers, and we just need to select the highest one, accept it, and get in touch with the buyer (via message from Ardor) to indicate the address to send the card to physical.