By Mohammad Al-Simadi
U.S. Stock Markets are still dyed red amid the rapid spread of the coronavirus, the U.S. Stock Market lost $ 1.7 trillion during the last two trading sessions to witness its worst days in two years.
The market value of U.S. Technology companies fell by $ 237 billion during Monday’s trading session. Apple was the biggest loser in the session as its value decreased by $ 65 billion.
The second and third top losers were Microsoft and Google as their market Cap fell by 58 and 44 billion dollars respectively, followed by Amazon and Facebook by 43 and 27 billion dollars respectively as well.
The coronavirus quickly began to spread, reaching Europe, United States, and some countries in the Middle East, continuing its harvest of lives and money. The number of victims of the virus reached more than 2,700 people, hitting the Chinese dragon economy and raises concerns about the global economic situation.
The future of Art Market with Blockchain Technologies by vepkhia giorgadze
Along with blockchain technology, digital valuables emerged in the form of cryptocurrency and tokens, which is conditional on the limited quantity of the digital units, "it is possible for digital money to exist, then why should digital valuables not exist, such as antiques and art works?" -
This question was raised in early 2017, many discoveries were made in the process of searching for the answers, and the idea of a high-income business was born, after long and laborious work the idea became a business plan.
One interesting aspect about people is collecting, or otherwise being a collector. People can collect anything including things such as stamps, stickers, souvenirs, musical albums, posters, rare coins, antiques and artworks. There are copies that have the unit value of millions of US dollars. It is established that we can repeat the principles of collectable valuables in a digital form, as a result we will get digital valuables that have a collectable nature. The condition for the existence of such products is a limited quantity, which has been made possible through blockchain technology, since if the unit has intrinsic value; it is possible for limited ones to become highly valuable.
Total count according to The Art Market 2019, which was developed by Art Economics founder who is named Art Basel and by the order of UBS, the total value of the art market is 67.4 billion US dollars in 2019. At the same time, the share that went to dealerships through online salses was 57%, despite this fact the annual growth, did not exceed 8% of the total value. Under these conditions, blockchain technology is continuing to develop , this fact guarantees the growth of online sales in the art market. Currently, several dealers have created a system of selling art ownership rights using blockchain technology. It is based on selling tokens that are strengthened by art pieces that allow users to own a certain percentage of the artwork. There are
different models of similar types of sales, some of them are built on the Investment Fund model, where the revenue from the purchases of new artworks and to receive revenue from the sold-out tokens strengthens the tokens guarantee. However, there exist precedents that produce tokens that represent a number of square centimetres of specific artworks, which also allows for the ownership of a piece of art. Online sales of traditional art are related to certain risks. For the most part, this is because the experts believe that it is impossible to offer a high quality service to the potential buyers in order to ensure that the buyer is protected from buying a fake copy. Nevertheless, over time, more and more art is sold on internet auctions. According to the Insurance Company Hiscox, the turnover of online art sales exceeded 3.75 billion dollars in 2016. According to the same year's summary, the purchase of art increased by 65%, mostly due to the results of online sales. Price of art works did not exceed $ 5000. According to the survey, the main motivators for purchasing art were the emotions that were coming from purchasing the works; As well as regaining the amount of money spent by reselling the artwork or increasing the earnings through selling - the perspective of income. The desire to be a member of the art community also plays an important role
According to a survey, 46.9% of online art purchasers spend less than $ 1000 per year, 32.2% - 1000-5000 $, 9,2% - 5000-10 000 $, and 11,7% - More than $ 10 000.
According to statistics, China and the United States were named the leaders of the world art market. China has 40% of the world's market volume, USA - 38%. These two countries constitute 78% of the world market for art.
From the art market participants, we can outline some of the most important. Those are: auction houses, art galleries, painters and collectionars. In addition to these four, there are many more services in the art market in the world , however they play a far less important role in the world of art.
The art market is divided into two categories: primary and secondary. The artworks that are sold for the first time are on primary market, and the secondary market is for the reselling of the artworks.
In the context of market circulation, the artworks will become a product that distinguish themselves in the art market by their specificity.
1. Unlike any other sector, even the most talented artists rarely achieve success and become famous. The reason for this is that without the relevant specialist (art dealer), painters can’t represent themselves on the art market, this is due to the fact that they do not have the relevant knowledge, especially in the field of marketing;
2. The market value of the product is less dependent on the consumer value placed on it and the public opinion. All expensive paintings are not necessarily good for interior decoration. Also, experts' opinion about the design of the art may vary;
3. The value of artwork very similar may vary. For example, the painting that includes the author's signature may be more valuable than the same painting without the signature.
4. There is no exact assessment system that can determine the quality of the art;
5. Unlike any other product, art is not created for commercial purposes, the artist is not oriented on market demands
while in the process of artwork creation;
6. Artists need mediators (art dealers) to facilitate the sale of their artwork. Also art dealers need artists because they
can not create art without them. These two subjects are intertwined with each other and succeed only through close
collaboration.
7. The real value of artwork does not depend on the cost of the art. One of the reasons for this is branding. A branded
painter's painting can be sold for hundreds of thousands or millions of dollars at a brand auction, even if it is a simple,
shadowed painted canvas.
8. The the objective of art is not only the cost, but also the personal value it possesses. That not only includes the cost
associated with it but exceeds it.
Several projects work on the integration of blockchain technology into traditional art markets. Namely the releases of the tokens that are backed up by expensive paintings, but such projects have nothing in common with ArtActive. Therefore, they cannot be considered as competitors.
Market analysis of collectible items:
Collecting is the systematized collection of items that have common characteristics, have internal value and belong to a particular owner, organization or state. Due to a wide range of collectible items, it is impossible to calculate their exact market capitalization because all collectible item fields have their own market capitalization. For example, there is a collectible coin market which differs from the collectible car market,collectible guns market, as well as medals, postage stamps, plants, animals, hunting equipment, travel souvenirs and many more. It is impossible to determine the total value of such items, but for the collectors it will be interesting to fill their collection with thematic collective digital assets.
Digital Art:
Technological development gifted the modern world with the possibilities of computer graphics, which are widely used in almost every aspect of our life. Many industries have been formed, the results of their work have become a part of our everyday life, but in addition to the commercial component there is digital art which in modern times has several varieties. The main charm of digital art is that it reflects the epoch of technological progress in which we live. Arts lovers believe that "brushes and paints" are much more complete than at any stage of human history. There are devices created that have replaced the traditional art designs that hang on the wall. For example, special monitors on which different images are displayed. The image is managed by a phone or a computer, which has access to digital drawings online, from where the image is displayed on the monitor. In this way, digital arts have adapted to possess a decorative function.
Copyright:
The person who owns the original file is the owner of the artwork but they cannot protect the file from being copied, this is because each artwork or file can be copied an unlimited number of times without spending any money. The best example of protecting your art is the publication of a reduced copy, in this case only the author holds the file of the full resolution art. The design of the digital art is easy to change and it is very difficult to define it, in fact it can be practically impossible. Due to this problem digital art is mostly used in commercial projects, this prevents the artist from carrying out certain ideas and selling them. That's why there is no such thing as a digital art market like traditional art has it.
Digital Art Market Analysis:
These days, there are more than 40,000 000 registered users of the digital social network - DeviantArt and in this social network there are more than 325,000,000 digital artworks that have no intrinsic value. The market is integrated into the social network where artists sell copies of their works for various commercial purposes, for prints or for to use in designs, which does not allow the sale of the work, and therefore such a trading model does not include the principles of collecting and artwork trading.
40,000 000 artists today have the desire but do not have the opportunity to turn their work into a full-fledged visual digital asset. Projects that are listed in the competition paragraph do not allow this. The project is oriented on this niche and that will be the strongest part of the project that in ArtActive it is considered maximal financial communication.
Crypto currencies:
According to Forbes, today's ICO market counts as a traditional collector’s niche, whose market capitalization is equals to 450 billion dollars at this time. The collector’s interest was always high in society, blockchain technology and preventing changes to the information in the decentralized registry provides many new possibilities for the collectibles market.
According to Coinmarketcap data, at the moment of the projects creation, there are more than 1500 crypto assets in trading circulation and the number of platforms went higher than 8800. The total capitalization of crypto currency is equal to 450 billion US dollars, but this number is a fallen number, at its peak this figure was equal to 900 billion us dollars.
Bitcoin has earned the cryptosystems trust and is trusted by investors and traders (it is referred to as cryptogold), with the capitalization of 35% of total cryptofield at this time. This figure used to be much higher, 85% in 2015, 80% in 2016, 72% in the beginning of 2017, but the reduction of its share of the total capitalization is caused by the trust increasing in other crypto activities. The reduction of this number does not weaken the image and trust of Bitcoin, but on the contrary, it makes it firmer during the initial stages of cryptofields development.
On an average day , 20 000 000 000 USD is going to be exchanged, of which about 80% is coming from the top ten stock exchanges, with 12,000 transactions per hour and the average value of an agreement being $ 10 000.
It is practically impossible to find the number of crypto currency user’s active today, but according to the published data, the number of Bitcoin wallets alone has exceeded 100 million. From this we may deduce that 20% of the wallets (20 000 000) are active. By the rough estimates, the number of crypto currency users has reached 85,000 000. The majority of consumers are small and medium investors. Because crypto currencies' capabilities are less commonly used in payment systems. Therefore, most of their turnover is tender and investment deals. The results of the research largely reflect the requirement of investment and capital investment’s demand for assets that have trends to increase in value. The ability to create and invest in such assets will result in realization of the project ArtActive.
Market share:
The project has the potential to take important positions in the listed industries, at least 1% of market share, which equals a very large amount of money. By considering the project's innovative component and the unforeseen risk factors at this stage, it is impossible to determine exactly how large the projects income will be after 1-2 years, although the minimum rate of profit is not less than 10 000 000 $. In case of success and positive development of crypto currency markets it is not impossible that the requirement to capitalize in short a short periods of time might increase to hundreds of millions of dollars. If the project fails, it will still be possible to withdraw the double the amount that was originally invested.
Regulations:
Today, the digital assets market regulations are actively discussed throughout the world, many models have been developed, but there is no country where country regulations prohibit digital art. As for the ICO stages, ICO projects are prohibited in some countries, but the citizens of said countries have the opportunity to invest in similar projects.
The ICO stage is a necessary condition for identifying buyers in order to be protected from transactions with terrorists and with people on the FBI's blacklist.
Products and services
The company's production is 100 000 000 ArtCarat registered in ArtActive. ArtCarat is somewhat of an art exchange internal crypto currency but can be considered as a component of the artwork. The fact that artworks are ensured by ArtCarat,crosses a picture in which the artworks is partially characterized by a financial bond of assets in its composition. On the other hand, mostly artworks artistic value influences the artworks financial value and the author’s image, while the number of ArtCarats reflects the status of artworks. From the economic point of view, owning a large number of ArtCarat’s gives the owner the opportunity to make an influence on the nature of the art exchange,so it was decided to sell 65% of ArtCarat's beforehand in order to create equal conditions in the market and for the project authors to receive less financial privileges on the exchange. 5% will be distributed to company’s partners and team members. The remaining 30%, which remain in the ownership, will be locked through clever contracts, and their unlocking will take place in stages over 3 years.
Under art exchange conditions, artworks are considered as products that are created by users. There will also be created works that have a decorative function. For example: Wallpapers for mobile phones and computers, can also be perceived as collectible items, unique collectible cryptocoins representing countries and cities, horoscope collectibles, crypto planet of solar system related collectibles, animals, plants and many other products with 3D or 2D images. These products will be produced by users, for which they will need ArtCarats.
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