Part 4: The Best Ways Artists can use Smart Contracts
Artists: Embracing Future Technologies: Part 4
Smart contracts are a cutting-edge technology that is giving creatives and artists newfound control over their work. By leveraging blockchain technology, smart contracts enable artists to securely and automatically conduct transactions, eliminating intermediaries and reducing fees.
In this blog post, I'll provide more information about smart contracts and explain how they can empower artists to earn and protect their creative work. From streamlining royalty payments to safeguarding intellectual property rights, smart contracts are a new technology that offers artists a different way to do business.
Table of Contents
How are Smart Contracts Different to NFTs?
How Can Smart Contracts Benefit Artists?
What is the Process by which an Artist can create a Smart Contract?
Challenges and Limitations of Using Smart Contracts as an Artist
What are Smart Contracts?
At their core, smart contracts are self-executing computer programs that automatically enforce the terms of an agreement.
By using blockchain technology, these contracts can be deployed and run on a decentralised network, meaning there is no central authority overseeing the transaction. This eliminates the need for intermediaries, such as lawyers or agents.
Compared to traditional contracts, smart contracts offer several advantages, including increased efficiency, transparency, and security. Once a smart contract is deployed on the blockchain, it cannot be altered or tampered with, and the terms of the contract are visible to all parties involved.
The smart contract is also programmed to carry out its tasks automatically when certain conditions are met. For example, if the terms of the contract state that a payment is due upon the completion of a project, the smart contract will automatically release the payment to the contractor when the project is completed. This eliminates the need for manual intervention, which can be slow, expensive, and error-prone.
How are Smart Contracts Different to NFTs?
While both NFTs and smart contracts utilise blockchain technology, they serve different purposes.
NFTs (non-fungible tokens) are digital assets that represent ownership of a unique item or piece of content, such as a digital artwork or collectible. NFTs use smart contracts to automate the transfer of ownership and verify the authenticity of the item. For more information about NFTs, please read Part 5 of this blog series.
Smart contracts are not limited to NFTs and can be used for a wide range of transactions, including the automatic execution of payments and the establishment of licensing agreements.
In other words, NFTs are a specific use case for smart contracts, whereas smart contracts have a broader range of applications in decentralised transactions. Both NFTs and smart contracts have the potential to transform the art industry and empower artists, but they serve different purposes and should not be conflated.
How Can Smart Contracts Benefit Artists?
Smart contracts offer several key benefits to artists, particularly in the art industry where transactions can be complex and difficult to track. Some of the best ways smart contracts can benefit artists include:
Automating royalty payments and streamlining licensing agreements - Smart contracts can automate the payment of royalties to artists. Additionally, smart contracts can streamline the licensing process, making it easier for artists to grant permission to use their work.
Reducing transaction fees - Smart contracts enable artists to deal directly with buyers or collectors, cutting out intermediaries. This could give greater control over transactions.
Enhancing security and transparency - By running on a decentralised network, smart contracts are more secure and transparent than traditional contracts. Once a contract is deployed, it cannot be altered or tampered with, and all parties can view the terms of the contract.
Protecting artists' intellectual property rights and reducing instances of infringement - By using smart contracts to establish ownership and enforce licensing agreements, artists can protect their intellectual property and reduce instances of infringement or unauthorised use of their work. Smart contracts effectively act as a form copyright.
A real-life example includes:
Codex is a decentralised title registry for art collectables - Codex uses a set of open source smart contracts that enables artists to create digital records for real assets, such as paintings. They would then create a record for that painting on the blockchain that acts as a certificate for authenticity, containing information about ownership, materials used etc.
What is the Process by which an Artist can create a Smart Contract?
If you're an artist looking to take advantage of smart contracts, there are several steps you can take to get started. Here's a brief overview of the process:
Identify the transaction you want to automate - For example, you may want to set up a contract that automatically pays you royalties every time your artwork is sold.
Define the terms of the contract - Next, you'll need to define the terms of the contract, including the conditions that trigger payment, the payment amount, and any other relevant details. It's important to be as specific as possible to ensure the contract functions as intended.
Choose a smart contract platform - There are several smart contract platforms available, each with its own features and capabilities. Ethereum is one of the most popular platforms for creating smart contracts, but there are others, such as Solana, which has lower costs.
Write the contract - Once you've defined the terms and chosen a platform, you can write the contract using a programming language, such as Solidity for Ethereum. If you're not familiar with programming, you will want to consider working with a developer to write the contract for you.
Deploy the contract - After writing the contract, you'll need to deploy it on the blockchain using the chosen platform. Once the contract is deployed, it will be visible and accessible to all parties involved.
Challenges and Limitations of Using Smart Contracts as an Artist
While the benefits of smart contracts are significant, there are also challenges and limitations that artists should be aware of. Some of these challenges include:
Technical expertise - Smart contracts are built on blockchain technology and require a certain level of technical expertise to create and deploy. Artists who are not familiar with programming will need to seek the assistance of a developer or rely on existing smart contract templates.
Limited adoption - While the use of smart contracts is growing, it is still a relatively niche technology in the art industry. This means that not all buyers or collaborators will be familiar with the technology or willing to engage with it.
Cost - Developing and deploying a smart contract can be expensive, particularly for artists who are just starting out or working with limited resources.
Legal considerations - While smart contracts can automate certain aspects of a transaction, they may not be sufficient to meet all legal requirements. Artists should consult with legal professionals to ensure their contracts are legally binding and enforceable.
Embracing Future Technologies
Thank you for taking the time to read this blog post, I hope that it has provided you with valuable insights into the ways in which Smart Contracts can benefit artists.
For more information on some of the new technologies that artists could embrace, including some information on the ones mentioned in this post, please see the following links:
