U.K. art gallery Dadiani Syndicate has partnered with blockchain platform Maecenas to auction off Andy Warhol’s 14 Small Electric Chairs (1980). It will be the world’s first art auction from an internationally-renowned artist in the form of cryptocurrencies.
Warhol’s 14 Small Electric Chairs will be listed on Maecenas’ blockchain platform on June 20, 2018. Maecenas will enable fractional ownership of the artwork. Forty-nine percent of the ownership of the painting will be available for auction.
The painting is, currently, worth $5.6 million — approximately 730 Bitcoin. When buyers purchase a part of the painting, they will receive a digital certificate that will remain on the Ethereum blockchain. The certificate represents their fractional ownership of the artwork.
Buyers can purchase the certificate using Bitcoin, Ethereum, ART tokens, or fiat currency. These currencies will be converted to ART tokens and placed into a smart contract during the auction. According to the press release, the smart contract running on the Ethereum blockchain will determine the final price of the artwork.
Maecenas CEO Marcelo Garcia Casi said:
“We’re making history. This event markets the first-ever artwork to be tokenised and to be sold using blockchain technology. We are proud to be pioneers in this space – this is the result of many years of hard work. This Warhol is the first artwork of many more to come. We’re starting this exciting journey alongside our strategic partner Dadiani, who not only fully supports our vision, but also will play a key long-term role in helping us transform the art market.”
Blockchain Technology Goes Beyond FinTech Into the Realm of Art
While blockchain is often associated with cryptocurrencies and FinTech, it also can revolutionize fine art investments. That is the goal of Maecenas, which is a global blockchain platform that aims to democratize access to fine art for everyone.
The reserve price of Warhol’s 14 Small Electric Chairs will start at $4 million. Any buyer participating will need to undergo “know your customer” (KYC) and anti-money laundering (AML) practices. The information will help the parties ensure that all purchases follow financial rules and regulations.
Warhol’s 14 Small Electric Chairs belongs to a larger body of work known as the 1980 Reversal series. The artwork is considered one of Warhol’s most iconic and well-known artworks along with his Marilyn Monroe, Dollar Bill, and Tomato Soup Can pieces.
Dadiani Syndicate founder Eleesa Dadiani stated:
“For the first time ever high-value, blue-chip artworks will be available for everybody to own utilising the unique technology platform developed by Maecenas. You can now own a piece of history! This is not a divisive strategy but a win-win for all…Our shared vision is being implemented in the most exciting way – now we both look forward to embracing the resulting evolution of art investment.”
Purchasing Art With Cryptocurrencies
While it may be the most expensive artwork that will be purchased using cryptocurrencies, it’s not the first. According to Forbes, four paintings were purchased using cryptocurrencies in January 2018 at the Art Stage in Singapore.
South China Morning Post reported that Singapore’s largest art fair created a system known as Aditus in January. Aditus allows a variety of payment options including the decision to pay using cryptocurrencies. While it sounds like a positive step forward for the art and cryptocurrency community, there are certain drawbacks.
Art sellers would need to reset the cryptocurrency value of the artwork constantly. Cryptocurrencies remain highly volatile, which would impact their price.
Despite this problem, Singapore-based collector Joe Nash does not see it as much of a problem. He believes that paintings can be set in other currencies like Euro and US or Australian dollars. “It is easy to check the real-time exchange rate against cryptocurrencies,” Nash said.