And the Warhol? Can someone hang it on his or her wall?
Dominguez It’s currently in a vault in Switzerland. From an investor’s perspective, it’s best to store works of art in a place with optimal humidity, temperature, and light conditions, where it’s protected from damage and theft. That also lowers insurance premiums.
Ongoing storage costs and insurance premiums, by the way, are not continually billed to the owners of the tokens. That wouldn’t be efficient. Those costs are already included in the sale price. If a single person were to acquire a majority of the tokens beyond a certain threshold, he or she would be allowed to take the work of art home. Similar to a shareholder squeeze-out with stocks, the majority token holder could first buy out the few remaining tokens outstanding by paying a premium.
Abosch Management of this type of shared or “fractionalized” ownership seems complicated, but of course it’s not a new idea. There have already been times collectors have come together to jointly purchase a physical work of art from me. In some cases, it gets shipped around and hangs in a different living room every six months. Perhaps this works best when the number of owners is small.
Sadly, there are instances of my work ending up in a vault somewhere as the buyers speculate that the value will go up over time. I always think it’s a pity when a work of art disappears from view.
Dominguez If museums or galleries meet our guidelines and are approved by our insurers, they definitely would be eligible storage sites. Nothing, then, would stand in the way of a public exposition, in my opinion.
Speaking of galleries, should they be worried about the blockchain technology disintermediating them?
Abosch Blockchain technology has the potential to shift power from governments and institutions to the people. For the art market, this could mean that artists would have tools at their disposal to be able to circumvent galleries and sell their works of art directly to their clientele. That said, I believe that galleries will always play an important role in discovering young artists and giving them visibility.
Dominguez We, in fact, do try to connect buyers with sellers directly, not least with the aim of reducing commission fees. However, our sellers to date aren’t the artists themselves – not yet. At the moment, our efforts are directed more toward enlarging the buyer side of the art market. Through its transparent processes, our platform lowers barriers for new entrants.