What is Art Tokenization?

Karolina

22 Aug 2023
What is Art Tokenization?

Understanding Art Tokenization

The concept of art tokenization involves transforming tangible art pieces or exclusive digital artworks into a digital token present on a blockchain. This process allows the division of ownership rights of an artwork and facilitates their trade on digital platforms. Acting as evidence of authenticity and ownership, these tokens digitalize the artwork's value. They denote a fraction of the ownership, enabling multiple people to have stakes in a single art piece. This approach not only introduces liquidity to the traditionally illiquid art market but also democratizes it by making art investment accessible to a wider audience.

Art tokenization primarily aims to connect the conventional art world to contemporary financial technology. Art tokenization enhances accessibility, simplifies transfers, and expands the market for artworks. Moreover, since these tokens reside on a blockchain, they maintain a transparent provenance or history of ownership, aiding in the prevention of forgery and ensuring authenticity.

Defining NFTs

Non-Fungible Tokens (NFTs) are distinct digital tokens authenticated on a blockchain, mainly employed to signify ownership of an exclusive digital item or content. The term "non-fungible" signifies that each token is unique and irreplaceable, as opposed to cryptocurrencies like Bitcoin or Ethereum, which are fungible and exchangeable.

NFTs gained popularity in representing digital arts, collectibles, music, videos, etc. Acquiring an NFT allows the buyer to own a one-of-a-kind piece of digital content. This ownership can be retained, sold, or transferred similarly to physical assets.

A vital feature of NFTs is their role as a digital certificate of authenticity. Utilizing blockchain technology, each NFT establishes the originality and ownership of a digital object and makes it tamper-resistant. This characteristic makes NFTs particularly attractive in the realm of art, where an artwork's value greatly depends on its authenticity and provenance.

Tokenized vs Non-tokenized Art

In the evolving landscape of art and technology, a distinct divide between tokenized and non-tokenized art has emerged. Tokenized art, represented as digital tokens on a blockchain, offers a modern approach to verifying authenticity, fractional ownership, and providing an easily transferable record of provenance. This allows for a broader audience to invest in and own portions of artworks, potentially democratizing the often exclusive world of art ownership.

On the other hand, non-tokenized art remains rooted in traditional forms of ownership and trading, relying on physical possession, conventional galleries, and expertise for its valuation and authenticity. While this traditional form provides a tangible, often deeply personal connection between the artwork and its owner, it can also be encumbered by challenges of liquidity, accessibility, and the occasional ambiguity in provenance. Both realms, though different in their operations, underscore the profound value and significance of art in human culture, each catering to varied audiences and preferences.

Steps to Tokenize Art

1. Platform Selection. Choose a preferred blockchain platform, such as Ethereum, Flow, or Binance Smart Chain.

2. Digital Depiction. Produce a top-quality digital version of the artwork (high-resolution JPG, PNG, or 3D model).

3. Smart Contract Creation. Employ a smart contract development tool like OpenZeppelin or Remix to write the contract underpinning the NFT, which establishes rules for metadata, rarity, and other aspects.

4. Contract Deployment. Launch the smart contract on the blockchain using tools like MetaMask or Truffle and possibly incurring gas fees.

5. NFT Minting. Generate the unique NFT token by invoking a smart contract function and connecting it to the digital representation of the artwork; it will be stored in a digital wallet.

6. Marketplace Listing. Offer the tokenized art for sale or auction on NFT marketplaces such as OpenSea, Rarible, or Foundation.

7. Royalty Set-up. Many platforms allow royalty establishment so that every NFT resale earns the original artist a percentage as ongoing compensation.

8. Legal Consequences. Investigate possible legal ramifications associated with copyright and intellectual property rights before tokenizing.

9. Art Promotion. Leverage social media networks, artist communities, and other forums to publicize tokenized artwork and entice buyers.

By adhering to this process, artists can capitalize on blockchain technology to diversify revenue sources, expand their global reach, and secure authentication and provenance for their pieces.

The Advantages of Tokenizing Art

1. Enhanced Accessibility. By democratizing art ownership, tokenization of art enables broader access to investments in art pieces, regardless of a person's geographic location.

2. Economic Empowerment. Artists have the opportunity to tokenize their work and sell it directly to the public, facilitating higher profits by potentially bypassing intermediaries.

3. Authenticity & Provenance. Tokenized art allows for a secure and transparent record of ownership on the blockchain, ensuring the genuineness of the artwork and its complete ownership history.

4. Liquidity. Traditional art assets are often illiquid and time-consuming to sell, whereas digital tokenized art can be easily traded on platforms, resulting in increased liquidity.

5. Fractional Ownership. Dividing ownership of tokenized art into smaller shares enables multiple investors to own a portion of a single artwork, allowing average investors access to high-value pieces.

6. Worldwide Market. Tokenizing art permits artists to reach a global audience, which expands access for diverse investors and collectors.

7. Safe Transfers. Transferring ownership becomes more secure, transparent, and direct through the use of blockchain technology.

8. New Art Forms & Innovation. Artists are able to incorporate interactive components, augmented reality, and other inventive elements within their tokenized works, fostering the development of unique art genres and experiences.

The Profitability of Art Tokenization in 2023

Based on the rapid expansion of NFTs and significant interest in tokenized art, it appears that art tokenization is profitable in 2023. The following reasons contribute to its success:

  • Expanding Market. Leading up to 2023, there has been a noticeable surge in digital artists, collectors, and investors entering the NFT space—fueling market growth.
  • High-Value Sales. Numerous tokenized artworks and NFTs have sold for millions, garnering substantial media attention and reinforcing the value and potential of this sector.
  • Widespread Acceptance. Mainstream entities, galleries, and celebrities have begun to support art tokenization, bolstering demand and endorsing its importance.
  • Extended Collector Base. The digital nature of tokenized art, coupled with growth in online platforms, broadens the global collector base—artists are no longer limited to local or regional markets.
  • Technological Progress. As blockchain technology and NFT platforms evolve, creating and trading tokenized art becomes more streamlined and efficient—lowering barriers to entry.

Conclusion

Art tokenization, an elegant fusion of time-honored tradition and cutting-edge innovation, is undeniably revolutionizing the realm of art ownership, exchange, and admiration. With the art world poised at the intersection of technology and ingenuity, blockchain's capacity to democratize, fortify, and invigorate the art sector cannot be overlooked.

It is crucial to proceed with caution as the potential is truly enticing. As with any budding industry, challenges will arise, spanning from regulatory barriers to market oversaturation. But, the perpetual essence of art – its capacity to break barriers, motivate generations, and encapsulate human experiences – guarantees its importance whether it's in a physical gallery or on the blockchain.

Navigating the complexities and possibilities ushered in by art tokenization serves as a reminder that art, in every form, stands as a tribute to our shared culture and advancement. The merger of art and technology not only presents financial prospects but also lays the groundwork for a more inclusive, varied, and global artistic community.

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AI in Real Estate: How Does It Support the Housing Market?

Miłosz Mach

18 Mar 2025
AI in Real Estate: How Does It Support the Housing Market?

The digital transformation is reshaping numerous sectors of the economy, and real estate is no exception. By 2025, AI will no longer be a mere gadget but a powerful tool that facilitates customer interactions, streamlines decision-making processes, and optimizes sales operations. Simultaneously, blockchain technology ensures security, transparency, and scalability in transactions. With this article, we launch a series of publications exploring AI in business, focusing today on the application of artificial intelligence within the real estate industry.

AI vs. Tradition: Key Implementations of AI in Real Estate

Designing, selling, and managing properties—traditional methods are increasingly giving way to data-driven decision-making.

Breakthroughs in Customer Service

AI-powered chatbots and virtual assistants are revolutionizing how companies interact with their customers. These tools handle hundreds of inquiries simultaneously, personalize offers, and guide clients through the purchasing process. Implementing AI agents can lead to higher-quality leads for developers and automate responses to most standard customer queries. However, technical challenges in deploying such systems include:

  • Integration with existing real estate databases: Chatbots must have access to up-to-date listings, prices, and availability.
  • Personalization of communication: Systems must adapt their interactions to individual customer needs.
  • Management of industry-specific knowledge: Chatbots require specialized expertise about local real estate markets.

Advanced Data Analysis

Cognitive AI systems utilize deep learning to analyze complex relationships within the real estate market, such as macroeconomic trends, local zoning plans, and user behavior on social media platforms. Deploying such solutions necessitates:

  • Collecting high-quality historical data.
  • Building infrastructure for real-time data processing.
  • Developing appropriate machine learning models.
  • Continuously monitoring and updating models based on new data.

Intelligent Design

Generative artificial intelligence is revolutionizing architectural design. These advanced algorithms can produce dozens of building design variants that account for site constraints, legal requirements, energy efficiency considerations, and aesthetic preferences.

Optimizing Building Energy Efficiency

Smart building management systems (BMS) leverage AI to optimize energy consumption while maintaining resident comfort. Reinforcement learning algorithms analyze data from temperature, humidity, and air quality sensors to adjust heating, cooling, and ventilation parameters effectively.

Integration of AI with Blockchain in Real Estate

The convergence of AI with blockchain technology opens up new possibilities for the real estate sector. Blockchain is a distributed database where information is stored in immutable "blocks." It ensures transaction security and data transparency while AI analyzes these data points to derive actionable insights. In practice, this means that ownership histories, all transactions, and property modifications are recorded in an unalterable format, with AI aiding in interpreting these records and informing decision-making processes.

AI has the potential to bring significant value to the real estate sector—estimated between $110 billion and $180 billion by experts at McKinsey & Company.

Key development directions over the coming years include:

  • Autonomous negotiation systems: AI agents equipped with game theory strategies capable of conducting complex negotiations.
  • AI in urban planning: Algorithms designed to plan city development and optimize spatial allocation.
  • Property tokenization: Leveraging blockchain technology to divide properties into digital tokens that enable fractional investment opportunities.

Conclusion

For companies today, the question is no longer "if" but "how" to implement AI to maximize benefits and enhance competitiveness. A strategic approach begins with identifying specific business challenges followed by selecting appropriate technologies.

What values could AI potentially bring to your organization?
  • Reduction of operational costs through automation
  • Enhanced customer experience and shorter transaction times
  • Increased accuracy in forecasts and valuations, minimizing business risks
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Want to implement AI in your real estate business?

Nextrope specializes in implementing AI and blockchain solutions tailored to specific business needs. Our expertise allows us to:

  • Create intelligent chatbots that serve customers 24/7
  • Implement analytical systems for property valuation
  • Build secure blockchain solutions for real estate transactions
Schedule a free consultation

Or check out other articles from the "AI in Business" series

AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

Gracjan Prusik

11 Mar 2025
AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

AI Revolution in the Frontend Developer's Workshop

In today's world, programming without AI support means giving up a powerful tool that radically increases a developer's productivity and efficiency. For the modern developer, AI in frontend automation is not just a curiosity, but a key tool that enhances productivity. From automatically generating components, to refactoring, and testing – AI tools are fundamentally changing our daily work, allowing us to focus on the creative aspects of programming instead of the tedious task of writing repetitive code. In this article, I will show how these tools are most commonly used to work faster, smarter, and with greater satisfaction.

This post kicks off a series dedicated to the use of AI in frontend automation, where we will analyze and discuss specific tools, techniques, and practical use cases of AI that help developers in their everyday tasks.

AI in Frontend Automation – How It Helps with Code Refactoring

One of the most common uses of AI is improving code quality and finding errors. These tools can analyze code and suggest optimizations. As a result, we will be able to write code much faster and significantly reduce the risk of human error.

How AI Saves Us from Frustrating Bugs

Imagine this situation: you spend hours debugging an application, not understanding why data isn't being fetched. Everything seems correct, the syntax is fine, yet something isn't working. Often, the problem lies in small details that are hard to catch when reviewing the code.

Let’s take a look at an example:

function fetchData() {
    fetch("htts://jsonplaceholder.typicode.com/posts")
      .then((response) => response.json())
      .then((data) => console.log(data))
      .catch((error) => console.error(error));
}

At first glance, the code looks correct. However, upon running it, no data is retrieved. Why? There’s a typo in the URL – "htts" instead of "https." This is a classic example of an error that could cost a developer hours of frustrating debugging.

When we ask AI to refactor this code, not only will we receive a more readable version using newer patterns (async/await), but also – and most importantly – AI will automatically detect and fix the typo in the URL:

async function fetchPosts() {
    try {
      const response = await fetch(
        "https://jsonplaceholder.typicode.com/posts"
      );
      const data = await response.json();
      console.log(data);
    } catch (error) {
      console.error(error);
    }
}

How AI in Frontend Automation Speeds Up UI Creation

One of the most obvious applications of AI in frontend development is generating UI components. Tools like GitHub Copilot, ChatGPT, or Claude can generate component code based on a short description or an image provided to them.

With these tools, we can create complex user interfaces in just a few seconds. Generating a complete, functional UI component often takes less than a minute. Furthermore, the generated code is typically error-free, includes appropriate animations, and is fully responsive, adapting to different screen sizes. It is important to describe exactly what we expect.

Here’s a view generated by Claude after entering the request: “Based on the loaded data, display posts. The page should be responsive. The main colors are: #CCFF89, #151515, and #E4E4E4.”

Generated posts view

AI in Code Analysis and Understanding

AI can analyze existing code and help understand it, which is particularly useful in large, complex projects or code written by someone else.

Example: Generating a summary of a function's behavior

Let’s assume we have a function for processing user data, the workings of which we don’t understand at first glance. AI can analyze the code and generate a readable explanation:

function processUserData(users) {
  return users
    .filter(user => user.isActive) // Checks the `isActive` value for each user and keeps only the objects where `isActive` is true
    .map(user => ({ 
      id: user.id, // Retrieves the `id` value from each user object
      name: `${user.firstName} ${user.lastName}`, // Creates a new string by combining `firstName` and `lastName`
      email: user.email.toLowerCase(), // Converts the email address to lowercase
    }));
}

In this case, AI not only summarizes the code's functionality but also breaks down individual operations into easier-to-understand segments.

AI in Frontend Automation – Translations and Error Detection

Every frontend developer knows that programming isn’t just about creatively building interfaces—it also involves many repetitive, tedious tasks. One of these is implementing translations for multilingual applications (i18n). Adding translations for each key in JSON files and then verifying them can be time-consuming and error-prone.

However, AI can significantly speed up this process. Using ChatGPT, DeepSeek, or Claude allows for automatic generation of translations for the user interface, as well as detecting linguistic and stylistic errors.

Example:

We have a translation file in JSON format:

{
  "welcome_message": "Welcome to our application!",
  "logout_button": "Log out",
  "error_message": "Something went wrong. Please try again later."
}

AI can automatically generate its Polish version:

{
  "welcome_message": "Witaj w naszej aplikacji!",
  "logout_button": "Wyloguj się",
  "error_message": "Coś poszło nie tak. Spróbuj ponownie później."
}

Moreover, AI can detect spelling errors or inconsistencies in translations. For example, if one part of the application uses "Log out" and another says "Exit," AI can suggest unifying the terminology.

This type of automation not only saves time but also minimizes the risk of human errors. And this is just one example – AI also assists in generating documentation, writing tests, and optimizing performance, which we will discuss in upcoming articles.

Summary

Artificial intelligence is transforming the way frontend developers work daily. From generating components and refactoring code to detecting errors, automating testing, and documentation—AI significantly accelerates and streamlines the development process. Without these tools, we would lose a lot of valuable time, which we certainly want to avoid.

In the next parts of this series, we will cover topics such as:

Stay tuned to keep up with the latest insights!