In spring this year Hong Kong’s art community celebrated the end of travel restrictions by holding an “art spring”, with exhibitions and cultural events including Art Basel (main picture), Art Central, HK Walls and other art collective events at venues such as the Tai Kwun and the Fringe Club.
The concurrent Museum Summit also dealt with matters related to art and culture. Recognising the potential of digitising art, a series of Web3-related events followed such as FOMO, WOW Summit, Web3 Festival, Digital Economy Summit and IP Licensing Show.
The 14th Five Year plan laid out the roadmap for Hong Kong to become the key intellectual property (IP) hub and art hub, a number of studies and reports provided by Hong Kong think tanks such as Our Hong Kong Foundation and Smart City Consortium have collectively advocated the cultural and art industries will play an important role for GDP growth and the need for adopting new technologies will become important.
Art ID Standard consortium, an international standard organisation based in Morocco draws its members from auction houses, logistics firms, insurers, valuers, blockchain companies, software companies, galleries, art dealers, curators. The Art ID Standard has already deployed the first beta standard of their Decentralised ID meta data standard for members to deploy, creating a digital infrastructure to ensure the provenance of art.
Daniel Chun, a member of the Hong Kong Trade Development Council (HKTDC) Electronics & Electrical Appliances Industries Advisory Committee, is also a member at the ART ID Standard Governance and Technical committee.
He said the Art ID Standard promotes Decentralised ID (DID) governed by the W3C Internet organisation. The DID model aligns with earlier concepts of certificate authorities and digital certificates used to identifying enterprises and computer servers, except that the verifiable credentials being used for providing credentials are now stored in decentralised servers.
Art Authentication and beyond
Distributed digital technologies such as blockchain should not be limited to the consumption side; one objective of the Art ID Standard is to establish basic protocols to authenticate art and collectibles and protect the IP of its creator or owner, Mr Chun said. A standard, would let service providers rely on the same metadata definitions as the key infrastructure to conduct further trade, insurance, valuation, collaterals, fractional ownership, asset tokenization or any liquidity or auction events.
Augmented and virtual reality, digital collectible protocols and Web3 immersive technologies are driving strong growth in the art industry. There has been a significant increase in recent years for pop art and affordable art, and Hong Kong being an international traveling, financial and logistics hub will be best suited for capturing these growing markets, he said.
The ART ID Standard with its metadata definitions and new regulatory regime in virtual assets will complement each other to support tokenisation of art and collectibles, he said. Asset gives art collectors or funds liquidity while cutting due diligence processing and paperwork costs. This removes many of the problems associated with traditionally valuable but illiquid assets.
Hong Kong financial regulators have also indicated that the virtual assets service providers may operate in Hong Kong under a new licensing regime that lets specific licensed entities apply for a license. The FinTech sector will support Web3 ecosystem growth and the art market ecosystem in Hong Kong. Both ecosystems are inter-related with the most obvious linkages being community building and liquidity, the less obvious ones are the actual application of the use of the blockchain and non-fungible token (NFTs) technology for supporting royalty payments for artists, performers and curators.
One ART ID Standard member, ARCUAL.art – a blockchain company invested by ART BASEL and Luma Foundation was recently exhibiting in Art Basel Hong Kong and shared that they foresaw Hong Kong becoming one the most important art hubs that could transform using blockchain and smart contract technologies to solve a problem in attribution of commission and profit in secondary market and building the trust fabric for the art markets in China.