How Web3 is reinventing the art and collectibles as we know it
Collecting and trading art and valuable memorabilia have been known for centuries. Some pieces are transferred from generation to generation, and their value rapidly increases. Authenticity and exclusivity are the backbones, providing real value to the art and collectibles industry. People are willing to pay high prices for objects (even if they’re not physically tangible) as long as they know that it is unique and original. Valuable and rare items are, unfortunately, very attractive to various scammers, and it’s essential that every piece of art or a collectible item is 100% protected.
The global art market was valued at 65.1 billion U.S. dollars in 2021. For collectibles, the market size was estimated at $402 billion in 2021 and is expected to cross $1 trillion by 2032. No doubt, the NFT market witnessed tremendous growth. Sales in the NFT industry currently outweigh those from the traditional art auction industry. According to DappRadar, last year NFT sales numbered about $23.1 billion, while traditional non-NFT art auction sales overstepped $16.8 billion. The most expensive NFT ever sold became The Merge, with almost 30,000 collectors pitching together for a total cost of $91.8 million.
NFTs change the art and collectibles world
According to a market report published by Verified Market Research, the NFT market will be worth $231 billion by 2030. NFT allows creating of a new type of digital asset that is unique and immutable, allowing trade as usual in art and collectibles.
The widespread use of NFTs in a variety of fields and spheres of life, such as art, sports, music, or video gaming, is a significant factor driving demand for them. Many brands are beginning to incorporate NFTs into their product offerings. Traditional art houses, galleries, and trading spaces are turning to NFTs, artists are incorporating NFTs as part of their production, and collectors seem to be jumping on NFT collections. But that’s only the beginning.
Sales in the NFT industry currently outweigh those from the traditional art auction industry.
According to a new art market report for 2022, a whopping 88% of high-net-worth traditional art collectors say they are interested in buying digital art in the form of NFTs. Activity in the digital art market is likely to remain strong as more traditional art collectors enter the space. According to artist Danielle Weber, who addressed at the Australia Blockchain Week conference, the NFT art sector has grown into a “beautiful cycle” because of the bond artists have with their fans.
While NFTs are mostly used for unique digital assets (a Bored Ape image or a sports video), the underlying technology could also identify a unique experience (e.g., that you attended an event) or a unique physical-world object. For example, Nike’s 2019 CryptoKick patent connects a physical pair of shoes to an NFT-based virtual twin, setting up a future in which owners of multiple sneaker NFTs might even “breed” them into custom kicks.
NFTs empower artists and nonprofits to explore and maximize their power for charitable giving. Some communities have launched NFTs to raise support for causes like cancer, the war in Ukraine, or human trafficking. Web3 and crypto worlds connect people who may have never met in the real world.
In Seattle, there’s already a first museum dedicated to NFTs. It aims to “pull back the curtain” on blockchain-based digital art and provides an outlet for artists, creators, and collectors to display their NFTs in a physical setting while educating the public about this new market for digital art.
There are already many NFT projects and platforms, and more of them will surface. Stay relevant and start with your own NFT collection now.
The future could feature NFTs for each of your purchases or experiences and transcend today’s narrow alternatives of Facebook check-ins or Reddit profile badges. Minting an NFT with each consumer transaction can create a dynamic digital point of contact specific to that transaction that can respond to a range of external events and signals. The possibilities for new and creative loyalty and after-sale engagement are endless.
FOR GALLERIES AND AUCTION HOUSES: NFTs offer immutable digital certificates of authenticity — a paperless experience
Paper certificates of authenticity used for items from the traditional art and collectibles industry are expensive. They bring significant environmental and labor costs and security risks as they can be copied or faked. Customers can also lose or damage these physical certificates.
NFTs or blockchain itself cannot connect physical artwork with its digital record. A special “Oracle” like Veracity Protocol is needed.
Veracity Protocol authenticates items using a smartphone camera, linking its unique material structure to an NFT and recording it in the blockchain with the associated proof of purchase. The product becomes the custodian of its own identity, and the decentralized records enable it to validate the product’s full history, including the certificate of origin and warranty conditions. This immutable digital certificate allows people to easily trade items without experts, and anyone can verify the product’s authenticity with just a smartphone camera.
NFTs establish uniqueness for digital assets. Similar to how physical collectibles (artwork, trading cards, or coins) retain their value due to the exclusiveness of the objects, NFTs allow creators to apply that exclusivity to digital assets.
FOR SELLERS: Web3 enables decentralization transactions
Thanks to Web3, you don’t need auction houses to sell artwork or collectibles. And you don’t need a middleman. Web3 offers transaction management in a decentralized way.
With Veracity Protocol’s solution, every item can be linked to a tamper-proof identity in the blockchain, enabling a trustable decentralized circular economy. Everyone would know the good’s origin, history, and fair trade compliance. We can see what markets and channels this product is authorized in and where it’s being distributed. Our solution can also enable trustless transactions where authenticity is automated. You don’t need to trust any party to know the item is authentic. Web3-enabled trade will provide full transparency and integrity.
In the Web3 economy, Veracity Protocol’s technology serves as the trust agent for products in primary and secondary markets and enables ownership transfer of the items and their associated NFTs.
FOR COLLECTORS: NFTs allow fractionalization of the art ownership
Rare pieces of art are often inaccessible to the average investor. But Unique Network, an NFT infrastructure, will give a wider base of investors a stake in some of the most valuable NFTs (e.g., CryproPunks or Bored Ape Yacht Club) by fractionalizing ownership to reinstate accessibility. The ownership of a CryptoPunk will be split among more than 56,000 addresses that have signed up for a share. This revolutionizes the art space — people don’t have to buy a whole piece but can own only a share. The same approach can apply to physical artwork for as long as you can immutably link the physical to its digital twin.
FOR ARTISTS: Smart contracts — a way to get paid for decades
In the past, when a painter created a piece of art, he was paid only when creating the painting. NFTs offer a fundamental change with the invention of smart contracts. Nowadays, artists can create a piece of art, create an immutable link with its digital certificate of origin, associate a smart contract to it, and every time the artwork is sold second-hand, the artist could get a share of the profit generated as its work grows in market value. This is a great way for artists or galleries to keep making a profit for decades.
FOR INSURANCE COMPANIES: Web3 can lower the risks of stealing items
Web3 brings new tools for insurance companies and lowers the risks of stealing items. Thanks to immutable digital certificates of ownership in the blockchain, you can know whether you’re buying an authentic or stolen piece. Web3 can help insurers reach new customers and address unmet customer needs.
As a collector, it is always stressful to lend your exclusive artwork for an exhibition. While showcasing your artwork worldwide is often increasing its market value, it is also a source of concern around security, insurance, and all the associated costs. Before shipping your painting, you will probably have to get an expert to confirm its authenticity, then, the exhibitor receiving the piece will want to authenticate it as well. When returned, the labor-intensive and expensive inspection and authentication process must be repeated. Veracity Protocol can help collectors gain peace of mind by protecting their artwork before sending it and authenticating it through its journey to the exhibition and back — all through a smartphone.
To create value for consumers and stay relevant in the decade to come, companies will have to expand to the Web3 world. Web3 also allows creators to make NFTs that have utility in virtual ecosystems and allows community building within different mediums. However, many companies don’t know how to integrate into this environment effectively with the least possible risk, which blockchains to use, or how to reach customers.
Veracity Protocol is the right partner to start with
NFTs or blockchain itself cannot connect physical artwork with its digital record. A special “Oracle” like Veracity Protocol is needed. Veracity Protocol offers an end-to-end physical Web3 tokenization solution (pNFT) that can help people link physical objects to the digital without needing external or embedded security elements. Our Computer Vision technology is able to capture an object’s material structure as a unique identifier to create a digital record. This ensures that the digital record would only be connected to the original physical object and that counterfeits or duplicates would be detected 100% of the time.
We offer a physical Web3 tokenization solution that easily links physical objects to the digital.
Once the product is digitalized, it’s processed into a physical NFT. As a result, the token economy can access any physical object we have identified and deemed verified. Without such advances, authenticity and provenance will always be questioned when creating physical NFTs.
Veracity Protocol’s technology is used in various use cases throughout the art and collectibles industry, from trading cards to coins. Because the technology works through smartphone cameras, individual traders and buyers can authenticate and verify physical objects, providing a sense of real-time trust and security in art and collectible marketplaces.
Our cooperation with Blockparty
The passion for the art industry and the belief in the Web3 economy are things that Blockparty and Veracity Protocol have in common. It was therefore natural that both companies collaborate to ensure the integrity of Blockparty’s artists and provide trust to the fans acquiring their physical and digital assets.
Blockparty is an NFT marketplace and storefront platform for creators and brands. Its Web3 tools allow creators and brands to create verifiably unique and connected items that bring utility and joy to their fans online and offline. Veracity Protocol is the underlying technology linking the physical object and its digital twin traded on the Blockparty marketplace. Thanks to our technology, creators can securely connect an NFT to a physical object and tokenize physical goods. Collectors can verify the authenticity of a physical object within their NFT collection and access all of its digital history with a simple scan.
This future is now, and the technology is proven. Stay ahead of the game! Veracity Protocol is always here to discuss this, so don’t hesitate to reach out at hello@veracityprotocol.org.
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Veracity Protocol is an award-winning startup that builds a Vision AI Standard to protect people and products in the digital world. The standard guarantees the highest level of trust and security for verifying the identity, authenticity, and integrity of physical objects using a smartphone.
