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How Blockchain is Helping Bring Fine Art to Buildings

In 2018, a groundbreaking report from The Alan Turing Institute detailed how using blockchain would fundamentally improve the authentication and value of fine artworks. The report, The Art Market 2.0: Blockchain and Financialisation in Visual Arts, introduced the benefits of bringing digital ledger technologies to the UK art market, with the proposed potential for a soaring increase in art market liquidity and value. Since then, the use of blockchain to prove the provenance of artworks and enhance their worth has grown worldwide. It has also made acquiring fine art for buildings even more attractive for owners and developers looking to add this rarefied amenity to their properties.

As the New York City experiential website 6sqft noted, luxury apartment developers such as Aby Rosen, traditional brokerages like Douglas Elliman and more tech-forward ones like Compass see the value of art in attracting and selling to tenants. As architect Morris Adjimi says in the 6sqft story: “Art is more stimulating to me than the latest trends in architecture. Art is visceral and topical, it is much more immediate and it allows you to get into the zeitgeist of the time. In art, we see what is happening now, in architecture it takes a few years to show up.”

The 6sgft story further asserts that: More and more architects, developers, designers, and brokers believe in the powerful relationship between art and real estate. So much so, it is now understood that art sells real estate and real estate sells art.

In fact, discerning real estate developers and owners are becoming increasingly aware that adding fine artworks to their property can be a major differentiator and value-add in attracting tenants. The commercial real estate world is also part of the trend. It’s virtually impossible to walk into the lobby of any modern urban office building without seeing a painting, mural or sculpture adorning the lobby. The centrality of art to office buildings goes back at least to the early 1930s, when the Rockefellers commissioned (and later fired for his work being too politically radical to their taste) famed artist Diego Rivera to paint some of the murals in Rockefeller Center.

However, until recently, unless you were “as rich as Rockefeller,” as the old song goes, a variety of issues made it difficult and expensive for most owners to bring quality fine art into buildings. Part of the problem involved authenticating the artworks, which would help assure their value and cost-effectiveness. Here is where technology has inserted itself to solve the problem, as blockchain technologists have created platforms to bring transparency and increased liquidity to the marketplace for fine art in real estate.

In the last two years, the PropTech startup Alpha’a, an online, community-oriented platform offering tailor-made art collections for businesses across all industries, including the real estate sectors of hospitality, office, and co-working/living spaces, has addressed this complex challenge for property owners and developers.

Most recently, Alpha’a, has launched Alphaa.io, a simple certification solution that guarantees edition ownership, transactional history on the full chain of custody and easy trading. In short, Alphaa.io adds transparency to the art market through blockchain technology. The Alphaa.io extension is built on the platform of Hong Kong-based Block.one, a leader in providing high-performance blockchain solutions. Block.one’s EOS VC business unit was an early investor in Alpha’a, selecting the PropTech startup not only for growth funding but as a pilot in the expansion of its EOSIO blockchain ecosystem.

Real estate owners and developers also often share authenticity concerns when it comes to purchasing artwork for their property. However, in its short time of existence, Alpha’a has proven its abilities to such major real estate and design companies as Airbnb, Casaone, Convene, Gilt, The Yard, and Zola.

Founded by the Brazilian born, New York based duo of Manuela Seve and CPO Renata Thomé, Alpha’a makes artists’ works, primarily limited-edition prints, accessible to audiences around the world through cutting-edge technology. Alphaa.io is an extension of the founders’ mission to merge the technology and art worlds to make art more accessible to everyone.

Once an image of an artwork is uploaded to the platform, or a piece of art is purchased, each work automatically receives a unique, tokenized QR code. The QR code becomes an immutable part of the decentralized Alphaa.io blockchain, rendering it immune to fraudulent duplication or manipulation. A QR code on the back of the work links back to the platform and the owner can then login with his or her unique credentials in order to transfer ownership of that work. In effect, this means that the work and the corresponding non-fungible token must have the same owner in order to have any trading value.

“Authenticity means different things to different people. As there is no industry-wide standard, I find it difficult to know how much a piece of art is worth, but I want to buy things which are going to hold their value,” said Isabel Serai, architect at Dado Castello Branco in Sao Paulo, Brazil, and a fine art collector.

Working as an advisor to the Alpha’a team, Fritz Dietl, founder of Dietl International, the largest logistics provider in the United States devoted entirely to the special needs and requirements of shipping artwork, will liaise between the Alphaa.io platform and top-tier galleries around the world, helping the galleries take advantage of this new technology.

In its short history, Alpha’a has spearheaded initiatives with notable names in contemporary art such as Ernesto Neto, Jarbas Lopes, Alex Andre Arrechea and Nelson Leirner and boasts a network of more than 7,000 artists.

Such successes have drawn the interest of the highly regarded and experienced early stage PropTech VC firm MetaProp, which selected Alpha’a for its globally competitive accelerator cohort of 2019-2020.

“We have seen rapidly expanding interest in our platform from the global artist community on the supply side and our similarly increasing user/buyers in real estate and business in general throughout the Americas and Europe on the demand side,” said Ms. Seve. “Entering the new year, we want to bring our technology to the larger real estate community to make it easier for them to invest in art. Unfortunately, there are a lot of fakes out there. If we are able to eliminate risk to building owners and managers I think we will see increased investment in art.” Having more art in our buildings, in our lives, brings a pretty obvious benefit to all of us. Now there is even more reason to believe that a great piece of art can help bring value to a building itself, not just those lucky enough to enjoy it.

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Propmodo is a global multimedia effort to explore how emerging technologies affect our built environment.

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