The art market continues with rocking crypto romance

The closest thing most people have to owning a world-famous work of art is to buy a cheap poster from a gallery, but art dealers are determined to use technology to attract new collectors.

Anaida Schneider, a former banker from Switzerland, is among the proponents of new ownership models — for a small fee, investors can buy a digital part of a painting and share in the profits when she sells it.

“Not everyone has a million dollars to invest,” she told AFP. “So I came up with the idea of ​​forking, like a mutual fund, but on the blockchain.”

Each buyer receives an NFT, the unique digital tokens that are created and stored on the blockchain, the computer code that underlies cryptocurrencies.

Although crypto assets have been routed this year with plummeting values, collapsing projects and widening scandals, the NFT art sector has weathered the storm better than other parts of the crypto world.

NFT artworks accounted for about $2.8 billion in sales last year, and the rate has declined only slightly in the first half of this year, according to analyst firm NonFungible.

Collectors and artists are among the most eager to experiment with technology, even if it means owning just a piece of a digital copy of a painting.

A fifth of 300 collectors surveyed by the Art+Tech Report website stated that they had already dealt with so-called fractional ownership.

Schneider’s Liechtenstein-based company Artessere is offering squares featuring paintings by Soviet artists, including Oleg Tselkov and Shimon Okshteyn, for 100 or 200 euros ($100 or $200) each.

She gives herself 10 years to resell them.

Schneider owns the paintings she sells, avoiding legal complications, but attempts to offer novel digital ownership regimes for publicly owned works are proving more difficult.

Thirteen Italian museums recently signed contracts with Cinello, a company that sells limited edition digital reproductions, to offer ownership of digital replicas of masterpieces.

The buyer will receive a high-resolution digital one-off for projection onto a screen and a certificate from the museum, which will receive half of the proceeds.

The company held a splashy exhibition in London in February, showcasing digitized works by Renaissance masters such as Raphael, Leonardo and Caravaggio. Since then it has sold a handful of them.

However, Italy’s culture ministry was reportedly upset that a replica of Michelangelo’s ‘Doni Tondo’ sold for around €240,000, but the Uffizi Gallery in Florence received less than a third of the proceeds.

A ministry spokesman was quoted in multiple media outlets last month as saying the issue is “complex and unregulated” and urging museums not to sign new contracts related to NFTs.

Cinello boss Francesco Losi wasn’t happy with the characterization, telling AFP, “We don’t sell NFTs.”

Buyers can ask for an NFT that suits their image, but the company said they have their own patented system for securing property, which they call DAW.

Cinello said it had digitized more than 200 works and its sales had generated €296,000 in additional revenue for Italian museums.

But the firm’s difficulties in Italy underscore the mixed blessings of NFTs – they bring publicity but also suspicion.

The NFT sector — which covers everything from avatars in computer games to million-dollar cartoon monkeys — is riddled with scams, counterfeit works, thefts and car washes.

Losi said he was aware that NFTs could be used “wrongly” and wasn’t sure what future they would have in the art world.

Anaida Schneider emphasized that her project is protected by law in Liechtenstein, as the tiny principality was among the first jurisdictions to pass a law regulating blockchain companies in 2019.

In addition, she said her insurance would cover damage to the artworks and she also factored in the possibility that the paintings would decline in value, though she declined to give specific details.

“I hope it never happens,” she said. “For me it is very important to bring this idea to the market.”