Cryptocurrency and the Future of Art
This article was originally published on Wonk Bridge
There is nothing that money buys so much as attention; whether it’s the sale of da Vinci’s Salvator Mundi for $450,000,000, or the tale of Bitcoin crashing and enjoying yet another phoenixian rebirth, nothing so captures the mind and the news cycle that orbits it than tales of supreme amounts of money changing hands.
So violently is much art wrested from public ownership by auction culture that it cannot but be interpreted as being, like trips on Elon’s rocket ship or a flat at One Hyde Park, the preserve of hyper-finance. Ironically enough, before industrialisation, art was linked intimately to banking just the same, and so much so that artistic patronage was even used by the Medici family to cleanse money ill-obtained via usurious means; it would seem little has changed on that score since. Having found an enormously profitable paradigm in the copyright-and-distribution model of the 20th century, the artistic industries were slow to adapt to the new media and associated social values of the Early Digital, and suffered commercial atrophy as a result; but with the burgeoning of the cryptocurrency, there is change afoot, one that threatens to at once fling artistic practice far into the future while at the same time doing something to revive that venerable phenomenon of the direct art-patron relationship.
Cryptoquesta?
The extraordinary value of single units of cryptocurrencies like Bitcoin is a compact of unit scarcity; in each cryptocurrency’s white paper (created prior to the currency’s launch and ledgering, to determine its limits) a pre-determined finitude of units is specified. In Bitcoin’s case, the supply limit is 21,000,000. With low demand, the value of each Bitcoin token (or Satoshi, as they were originally known, in honour of creator Satoshi Nakamoto) was causing few avalanches. As it rose, you could hear its rumbling from miles off, and those shrewdest and most fortuitous who got onboard earlier can now find themselves selling up for anywhere between £6,000 and £20,000 for a single unit.
So why have cryptocurrencies suddenly returned to our wider attention?
Well, there were certain internal incoherencies in the nature of early digital currency. First and foremost, it was not junctioned to tangible assets (it was once necessary to junction even paper money to the gold standard to shore up creditors’ faith in the robustness of the debt), which made merchants of all stripes reluctant to handle it; secondly, it is seven times more volatile than gold, and is volatile not merely economically but ontologically, as anything so digitally abstracted can, without the necessary protections, be hacked and illegally replicated. This flaw was proved back in 2010, with some 184 billion bitcoin tokens reaped from one transaction. The days when a Bitcoin would be declared more valuable than an ounce of gold, and the most stable alternative going to central bank controlled fiat money, seemed a long way off.
Now underpinned by the blockchain ledger, in which mutually anonymous processors in the chain scramble then piece back together numerical codes to verify transactions — the crypto element in the name — cryptocurrency is becoming a viable facilitator of transaction. Owing to its vastly extreme and mutually interlinked natures of volatility and scarcity, Bitcoin is unlikely to become the vogue currency changing hands at your local Spar, Walgreens or Meidi-Ya; but in specialist areas of the market, its security is a boon and its unpredictability not necessarily a fatal flaw. The art world is one such area.
Along Comes Richard Prince
The online gallery was among the first digital cultural institutions to characterise itself as heroically anti-industrial; in the late offings of the 20th century, they presented an alternative exhibition space for art graduates, allowing them to display without incurring the monstrous fees otherwise commanded by those dealers and curators keeping gate by the doorways of real-life galleries and other conventional industry channels. Minor legend has it that early-net profiteer David Bowie funded and/or operated one or two such sites in his spare time as the Millennium turned.
Earlier this year, the Distributed Gallery announced a “Ready Made Token”, a new auctionable series made with Ethereum — a pioneer in blockchain and distributed ledger technology — by Richard Prince. These tokens would be auctioned, with bids starting at 1 Ether (worth $650 at the time, and upwards of $1,000 as of this article’s being published). The Richard Prince angle proved to be an elaborate joke — the token was actually made by Olivier Sarrouy of University Rennes Deux, and the stunt was a paean to Richard Prince’s history of ‘appropriation art’ and his involvement in a lawsuit concerning photographs appropriated from Instagram. How else to treat such a man than to appropriate his name? Refunds were quickly offered to those who had successfully bid in the region of $2,600 for one of these limited edition Princeisms. Mr Prince himself, currently in the galleries with an exhibition named after the high-rising ‘Ripple’ currency, was nonplussed.
At the bottom of this merry fiasco was the kernel of an idea, one that subsequently made like hell for the Rare Digital Arts Video Festival, one that, it was suggested, could posit a contention against the infinite copyability of all digitised art and re-establish an incorruptible vertex of value in online artistic exchange.
Would it now be possible to take complex audio files, ‘original’ JPGs and GIFs, and the Adam copies of all the bitching-est memes and enshrine within them a value of authenticity by turning these files into “rare, tradeable blockchain assets”?
The Death of the Bank
In its enterprise, potential and susceptibility to foible, there has always been something splenetically human about the institution of a bank. The simple, ruler-lined distrust a great many nurse for the banks of the world - the banks of London, New York, Athens and Caracas - conceals the more ouroboritic truth of the fact that it is the guiding principle of debt birthed and borne by banks that allows us to be human in our conception of the word; without its regulations, life would once again become resource-intensive, and a life guided by ethical practice, law, leisure and fair treatment would become untenable without the implementation of force.
The reason blockchain is feted by some is that it seems to have in its nature a freedom from the humanised vulnerabilities of the centralised reserve; it cannot be hacked, it cannot itself turn and steal the money invested in it, it cannot be turned from its course either by the bias bred by familiarity (as previously stated, none of the computers governing transactions through Bitcoin, for example, are aware of the identities of its fellows). Value may plummet and value may rise, but in crypto the path of debit is inerasably maintained through a body of ledgers too wide and interlinked to fail; thus the path of debit is allowed to be sacrosanct. Thus it really can be said without a smirk that a mostly abstracted encrypted system of ledger transactions constitutes value more steadily and securely than gold.
Could the dehumanisation of the mediator smooth the course of the human relationships that really counts in art; that which runs between the producer and the consumer? Sites like Artrium.co certainly believe so. Among all their metamodern, both-ironic-and-sincere invocations of a coming ‘Renaissance’ in art investment, there is something striking to be contended with in the business’ avowed possibility of a ‘very low-friction’ platform allowing the consistent safeguarding and promoting of artistic assets.
Elsewhere, the M.O of artbyte.me is as simple as can be:
“Using the emerging technology of digital currencies, it is the person-to-person way to support artists [sic].”
Person-to-person, heart-to-heart, ledger-to-ledger; the revolution runs at 270 degrees. The promise of the blockchain, as far as a the production of art is concerned, takes us back to those days of the patron.
The Patron
It stands to be said that the system of patronage was somewhat heartily disavowed in its day. Samuel Johnson described a patron as “one who looks with unconcern on a man struggling for life in the water, and, when he has reached the ground, encumbers him with help.” It is also wise to remember that patronage was the preserve of the very wealthy, and the art produced under its mechanics was often not primarily made to edify but to endorse prestige, as well as social and political positions. Thinking back to what we considered earlier of the Medicis, and considering once again the relationship between, for instance, Middle Eastern appetites for art and the way the golden goose of global criminality’s tracks wind, for all that there may be the promise of fabulous new revenue streams sweeping towards the art world, the promise of severe and quite possibly well-concealed moral compromise may be sweeping hither on the opposite wing, to say nothing of artistic compromise. The dispersion of capital to the masses did a great service in opening art to the service of social interrogation; under patronage such activity was forced into submission by the abiding interests of the patron, able to be carried only by sly indications worked in by the artists, readable only by scavenging art historians. But it is already more than feasible to use single, bulk transactions on cultural goods to circumvent auditing and get money into nefarious accounts; is it wise to promote a system that could make brown envelopes out of this as it can out of this?
Then there are the unavoidable convolutions and complications of converting between different cryptocurrencies to further scramble the picture; still, it hasn’t stopped the likes of the CryptoKitties, a series of collectible virtual felines, driving $52,000,000, or approximately 37,000 in Ether, in transactions. CryptoPunks look to be the next trend in line to profit thus; they’re flogging algorithmically crafted characters at 10 Ether apiece. Whether or not this is what Pater or Vasari had in mind when they spoke of art is perhaps besides the point; these successes affirm the basic plausibility of collectability-based commercial plans waged through cryptocurrency. This lattice is junctioned too to the ever-more-plausible concept of virtual wealth. Visit the likes of DADA.nyc and browse, and you realise that cryptoculture has already done something so true of so few ideal-driven market disruptions: it has created basic circuits of logistics that work. Visit Maecenas, and pay witness to the manner in which it is selling shares in blue-chip, high-end artworks through open blockchain, and appreciate how far up and across the spectrum of culture this brave new system of economics could roam.
Final Notes on Blockchain
Blockchain will, most fundamentally, re-realise the prospect of a ‘market’ for art beyond and below the high-end; this is the only thing about the subject that is more or less impervious to prediction. There is something in the nature of blockchain that seems to align it with the natural value humans, unless given access to back-doors, will ascribe to one another’s intellectual property; and this, as far as it goes, must sound good to the digital conservative (who, lest we forget, is but yesterday’s liberal). It may give rise to a class of young, ad hoc Digital Art Dealers who will succeed today’s playlist compilers and yesterday’s file sharers, playing the wilds of a see-sawing market to make a penny
The question, as ever, concerns scale and the likelihood that incorruptible techniques can be purposed for less than incorruptible ends. Blockchain’s commitment to provenance, authentication and remuneration offer hopes of their own. Regardless of the bigger questions, which as yet are too far out into the (ahem) ether to be read by my contemplative circuits, what we can say is that in the blockchain craze lays the potential for perhaps the broadest and most complete cultural ‘disruption’ in the limited history of the net.
