Bitcoin: The game-changer for the art world?

The romanticised notion of the starving artist may be a cliché but the fact is, unless you are one of the Damien Hirsts of this world, many artists struggle to make ends meet purely from selling their artwork. Finding a platform to sell their work, to get publicity, and take their work to a global audience can prove insurmountable tasks to the new creative on the block. Apart from costs of materials, marketing, exhibition or selling space, not to mention time and effort, these days you also need to factor in the additional costs of credit card transactions, bank fees and currency exchange when trying to expand the market abroad.

This is where bitcoin is offering a lifeline and the art world is starting to take notice. Since Art4Bit stepped into the bitcoin ring in February providing a platform for artists to sell their work for alternative currencies, a growing number of artists are learning about how accepting bitcoin can help promote their work and increase their profit margins.

It is perhaps unsurprising that artists and creative types are turning to using a decentralised currency. Some of the characteristics of both are strikingly similar: transcending the barriers of language and not suffering from being devalued. It is a unique example of art and science uniting with a common goal: freedom.

Speaking to Carla from Art4Bit, she says, “Bitcoin was born as a free currency and we think artists could profit from this liberty. Bitcoin does not have boundaries, and in this way, art also would not.”

On the Art4Bit website, artists can display their work and sellers can purchase it directly from them online for digital currencies, with Art4Bit taking a small, random percentage of the cost (anything between two and 20 per cent.) Artists dictate their own price for the work and if required, Art4Bit can offer free advice from a consultant or lawyer to help them value their work, thus helping to “sustain artists in giving a value that they think is fair,” says Carla.

It is part of their mission for a more ethical art market to flourish. The lack of banking fees is a clear benefit and people looking to use Art4Bit as a way of getting noticed have been attracted by the without-borders approach the company promotes. “The internationalisation of their work seems to be one of the most important elements,” says Carla. “When they hear about bitcoin, they seem very open and faithful to its uses, even if they don’t know exactly what bitcoin is. They obviously want to understand.”

Despite in their own country of Italy, adoption of and interest in bitcoin is negligible, Art4Bit say there is “a slow increasing interest and knowledge about the use of bitcoin in the art field… There is opening discussion about how bitcoin can be used.”

Having just travelled around the world raising awareness of their site and promoting their ideas to artists, they have a good gauge of how open artists are to using a decentralised currency. “In both [Japan and Hungary] we found several artists who already knew about bitcoin and would like to collaborate with us,” Carla says. “We have also received interest from artists in India and the US who are ready to collaborate.”

There are plenty of other examples as well. The ecommerce site, Etsy, known for its vendors selling vintage, art, and handmade craft items, currently has just shy of 180 sellers accepting Bitcoin and a members’ community dedicated to those that use it. One such vendor is Tracy Smith who owns Vancouver Stain Glass.

She says right now she only has one item for sale, which can be bought with bitcoin but she is enthusiastic about the currency. “The reason I chose bitcoin is I used to be an accountant and have studied economics. I like that it is an independent source of trade, and is not reliant on countries, elections, economies or the markets. It is brilliant. I also read that the value of a bitcoin never goes down, only up. This is the same as art. The value never goes down. It is recession-proof.”

Designers, photographers and printing shops are also getting involved. In Barcelona, Tostadero recording studio offers 10 per cent off if you pay in bitcoins. Bitmagination allows photographers and designers to sell their work for bitcoins, promoting their philosophy of a free market.

In fact, Art4Bit believe bitcoin could be a game-changer in the art market. “Bitcoin could free art from geographical boundaries, making it easier to move, digitally and physically. The art market could also gain a more personal dimension,” says Carla.

The personal dimension comes from allowing artists to interact directly with the buyer. “We want to help artists have a favourable relationship with the public and with the buyers, very different to the methods of some art galleries,” Carla says, adding, “Artists could be free and at the same time, be more visible.”

Art4Bit, who are holding their first exhibition in Milan next month, believe the benefits do not just flow one-way, and art could also be mutually beneficial to bitcoin. “Art is one of the most valuable and least devalued goods and thanks to this, it can help bitcoin to stabilise and increase its worth,” explains Carla.

Suddenly the science of cryptography is uniting with art. Bitcoin and the Internet are starting to link people across the globe and nurture new markets in a very non-technical domain. 

By Louise @ Bitscan

How likely is a decentralised exchange for bitcoin?

There is no doubt that for some, bitcoin is more than just a currency, or a commodity, it is an ideology. Its fundamental characteristics of being decentralised and open-source, and its disruptive nature, appeal to the libertarians out there.

Yet, when it comes to exchanging bitcoins, the majority still have to go through a third party; one of the exchanges, or a broker, who all take their cut. Even the partly-decentralised exchange platform of local bitcoins still requires users to go through a company-owned website, so for some bitcoiners, and not just the purists, a fully decentralised exchange cannot come soon enough.

It is a topic, which will be discussed in a panel at next month’s European Bitcoin Conference taking place in Amsterdam. One of the panel members is Mike Hearn, software developer for Google and one of the brains behind much of the bitcoin technology for Android. When we interviewed him, we touched on his first introduction to bitcoin and his dealings with Satoshi (see our earlier post) during the very early days of the currency, but soon moved on to his thoughts about decentralised exchange.

The problem is that centralised exchanges are financial institutions, which have to interface with the banking system, the one system bitcoin tries to remove. However, “they’re not going anywhere,” Hearn says, stating that, “if you want to move large sums of money they are the best way to do that.”

A direct, peer-to-peer exchange system sounds good in theory but in practise, Hearn believes there are limitations, and it comes down to trust. “It becomes very difficult to do this swap in an entirely fraud-free way,” Hearn says. “Someone always has to go first, and whoever goes first risks losing out... You can’t swap money for bitcoins atomically.”

Hearn explored some way of instigating a decentralised exchange system using social networks at the London bitcoin conference last year.

However, he says not too much has developed since then because “the centralised exchanges are working.” Despite the banking system being “slow and expensive” he says, “It is hard to get around that as your money starts off in the banking system.”

In a bitcoin utopia, the main exchanges might be redundant but Hearn thinks that is a long way off becoming the reality. “It is not clear the decentralised exchange concept is going to work very well so for now I don’t see them going anywhere.” He refers to the fact that even if a person were to try to trade through a social network via the internet, every movement peer to peer, would go through the banking system with the banks taking a small fee. He also raises the risks of taking part in a decentralised exchange system. “The assumption is that banks won’t figure out what you’re doing, and why you’re suddenly sending and receiving wire transfers. What we’ve seen is people getting their bank accounts terminated because banks view them as a money transmitter and abusing the banking system.”

Of course, some people circumvent some of these problems by meeting up face to face to trade small amounts of cash but the issue is how to scale that up. “A decentralised exchange would marry the best of both worlds,” Hearn explains. “You could have the scale of a standard exchange but with the decentralisation of in-person trading.”

One UK company has announced its plans to create a decentralised exchange for fiat and crypto-currencies. Metalair is looking for investors and donors for what it claims will be a “double-spending proof, fully decentralised exchange mechanism” for its open-source software. It is also hoping to promote the adoption of all cryptocurrencies by providing an exchange for bitcoin and litecoin as well.

Despite Hearn believing the future of bitcoin is bright, he is not quite as enthusiastic about that of other alternative crypto-currencies. When asked about such digital currencies as Litecoin and Feathercoin, he seemed sceptical. “Most alt coins haven’t introduced any compelling technical changes and I don’t see any reason why they’d be competitive in the long-term,” he says.

Mike will be speaking at the European Bitcoin Convention, which takes place from September 26^th – 28^th. 

By Louise @ Bitscan