Paying for art with cryptocurrency is one of the latest and safest methods of investing in fine art while also ensuring a generous ROI in the long run.
We live in a rapidly-evolving world where many of the concepts that we have taken for granted for centuries now change before our very eyes. One of them is physical money, which we might soon see replaced by virtual currency.
The traditional financial markets have been accepting Bitcoin for a decade now. Other types of digital assets have also earned their place at the table in the meantime. Today, we can pay with cryptocurrency and digital tokens for almost anything from milk and honey to fine art and cultural creations.
If you are looking for a more secure way of purchasing art, you might want the revolutionary method of cryptocurrency payments. Read on to discover how it works, its benefits and if there are any risks to it!
What is Cryptocurrency?
Cryptocurrency refers to one or more units of digital assets that embody several functions like payment, transaction leverage, and the ability to control the issuance of other digital assets.
Some refer to cryptocurrency as a virtual alternative to fiat money that is part of a highly secure, peer-to-peer (P2P) framework also known as a blockchain.
This scalable system uses cryptography to secure transactions of digital assets between its users (peers). Every recorded transaction (block) becomes part of a chain of virtual transfers that cannot be modified or reversed. They take place without the need for approval from a central authority, and they take less time to receive confirmation than traditional banking transactions.
Cryptocurrency transactions are some of the safest and quickest forms of payment available at the moment.
Cryptocurrency is legal to hold, sell and buy in most countries across the world with various restrictions imposed by local governments. Its ease of use and an almost complete lack of transaction fees help increase its popularity steadily in numerous commercial activities.
Banks are opening more and more to the idea of cryptocurrency. It is in their interest to offer clients the option to open accounts in cryptocurrency, transfer it or use it for transactions. For many industry visionaries, cryptocurrency will drastically change the economy as we know it today.
What Kinds of Cryptocurrency Are Available?
The most popular cryptocurrency in the world is Bitcoin, and justifiably so. Bitcoin (BTC) is the original digital asset that rose from the ashes of the financial crisis of 2008. It promised to usher the financial markets into a new hip and virtual era.
Even if it lacked major support in the beginning, Bitcoin quickly rose to worldwide notoriety, and by the end of 2017, a single unit was worth around $19,000. Its history is marked by exhilarating ups and depressing downs, bubbles, and volatility. Simply put, this digital asset has many of the behaviors of traditional financial assets. The best part is that its regulation doesn’t fall in the hands of a central authority or a banking institution. Instead, it is the very owners who dictate its value. The more they use it, the higher it is prized, and the more stable it becomes.
Along with Bitcoin, other major cryptos feature scalability and volatility, such as Ethereum (ETH), Ripple’s XRP, Tezos (XTZ) and Litecoin (LTC). Their value oscillates regardless of the value of fiat currencies.
Stablecoins are another form of cryptocurrency that is pegged to the value of real-life money. The value of a stablecoin unit is equal or almost equal to the value of one US Dollar (USD), one Euro (EUR) or one Japanese Yen (¥).
Most of these cryptocurrencies are available for making various commercial transactions. Owning them opens the door wide open to a new way of paying for things quicker and with fewer fees.
How to Use Cryptocurrency to Buy Art
Buying art with cryptocurrency is easy. Investing in both is largely seen as a reliable investment with potentially high ROI. Art only increases in value as time goes by, and digital assets represent the future of financial transactions for many contemporary business overachievers like Elon Musk, Bill Gates and Jeff Bezos.
Using some of your digital assets or Bitcoin to purchase art is not something new. The practice has been around for years, and it involves successful examples. Many art galleries around the world are offering their clients the possibility to pay through cryptocurrency. Here at StanRagets.com, I’ve been accepting digital currencies like Doge, Bitcoin, Ethereum and other cryptocurrencies for the past 10 years.
The exchange process is simple and secure. First, you get a cryptocurrency wallet where you will store your cryptos. Next, you create an account on one of the many exchanges out there. You enter your data and the amount of money that you are willing to exchange and confirm the transfer. Other services, such as CoinPayments, are making the process even simpler.
Cryptocurrency transactions take place instantly or in just a matter of minutes, and they require very small fees or no fees at all. The same goes for when you use Bitcoin to buy art.
Is Using Cryptocurrency Safe for Buying Art?
Some people may shy away from the possibility of buying art with cryptocurrency. If they have very little information about digital assets or virtual transactions, they see it as risky.
The truth is that paying for art with Bitcoin or any other form of a digital asset is just as safe as paying with fiat money.
Cryptocurrencies are digital assets protected by a combination of cryptography and digital signatures that are impossible to break, erase or modify. Their existence is valid and verifiable. You can store them in wallets, which contain private keys of access that only the owner knows.
When you exchange fiat money for cryptocurrency, you make a safe and sound investment. And, when you exchange cryptocurrency for art you repeat and strengthen it. There are times when a certificate of authenticity can be included in the cryptocurrency payment, thus solidifying the transfer of the artwork and providing an additional level of protection for both the artist and the art buyer.
Just like any other financial market, the cryptocurrency industry has been hit by hacker attacks, (virtual) robberies and scandals. Where there is value, there will always be an entity trying to take it without paying the price tag.
However, when hacker attacks occur, they involve unsecured or obscure exchanges. Cryptocurrency users and owners rarely lose anything in the process.
Another myth says that Bitcoin is the favorite asset of criminals to use when laundering money. Fortunately, a little insight into the industry and a basic understanding of how cryptocurrency works will debunk this myth for most people out there.
On the contrary, every day there are more criminal attacks on fiat money and traditional currencies than on cryptocurrencies. Still, people use them willingly in the form of cash or credit cards.
What are the benefits of using cryptocurrency to purchase art?
The combination of cryptocurrency and art sale benefits everyone involved.
Firstly, every transaction increases the value of the digital asset used in the transfer. It means that both the buyer and the seller contribute to the long-term scalability and positive development of the digital coin.
Secondly, the artist or the art seller gets to enhance their pool of buyers and supporters. They get to reach more art enthusiasts and present their art to buyers who would otherwise not know about it.
But, the biggest advantages that result from purchasing art with cryptocurrency are for the buyer who gets to:
- Buy art online through nearly instant transactions
- Make easy art purchases by investing from their portfolio of cryptocurrencies
- Pay for art with smaller or no transaction fees at all
- Make international payments safely
- Take part in online auctions that only admit cryptocurrency owners
Last, but not least, when you pay for art with cryptocurrency, you have full privacy and control over the transaction. Banking institutions cannot demand or perceive commissions from the trade, and you get to take part in taking the art market to a whole new level.