Cryptocurrencies and the Art Market

By Jennie Nadel

Following up on Center for Art Law's popular article on Blockchain and the Visual Arts, let us dive into the topic of cryptocurrencies and their potential applications in the art world.

Reminder: What is a Blockchain?

Blockchains are described as decentralized digital ledgers, or, in simpler terms, a digitized record of transactions. Don and Alex Trapscott, authors of Blockchain Revolution (2016), define the blockchain as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” The ledger is also “append only”, meaning that past entries in this online ledger can never be erased. If an earlier transaction does need to be changed, then the change is made but the entry shows the alteration made, similar to changing words in a Google Drive spreadsheet owned by many different people. The alteration is made, but the record of the alteration is apparent. Thus, the ledger can only ever get longer or “higher”. All of these transactions grouped in a set time period are then labeled a “block.” Once a block is properly verified a new block can be added on top to create a chain of blocks, or  “blockchain”. Blockchains can have many different applications depending on the type of data it stores. This video helps to visually understand the concept of blockchain technology. dB, chief technology officer at Artsy posts about the latest happenings at the intersection of blockchain technology and the art world on his website.