Kepeng.io, DENPASAR – Blockchain-based tokens are currently used as a method of buying and selling digital art. Tokens can be used to establish the origin and allow owners to verify their ownership of a work of art. In addition, blockchain technology is also used as a system to refute and at the same time prove the authenticity of a work of art.
A token in the context of a blockchain is a transferable digital asset or a representation of an asset. Tokens are widely used, for example, to create cryptocurrencies. Tokens are also used to sell and buy digital art and assets. In the former use case, the tokens are called interchangeable and in the latter case, they are not interchangeable. However, there are many possible uses for non-exchangeable tokens in combination with physical arts.
Based on the presentation of the socialization material on Tokens and Blockchain Technology by I Gusti Agung Gede Bayu “Banyuning” to representatives of the Tangeb Carving Art Vocational School Art Teacher, Banyuning said in the case of digital art, tokens usually contain information about art or assets. Such tokens will contain relevant information about the artwork and may be transferred along with the artwork during sale or transfer. The tokens can exist only on the blockchain, or the artwork can also contain references to the tokens associated with the artwork.
Since transactions on the blockchain can be verified and timestamped and tokens can be transferred securely between owners, the use of tokens in combination with physical art creates some interesting use cases. “Discussions about blockchain often involve the terms coins and tokens. Coins are blockchain native cryptocurrencies, while tokens are digital assets or cryptocurrencies built on an existing blockchain,” said Banyuning.
Tokens are smart contracts. Tokens are typically compliant with protocol standards to aid interoperability. This interoperability allows websites and other services to interact easily with various tokens. The common protocol standards on Ethereum are ERC-20 and ERC-721.
Banyuning explained that tokens can be roughly divided into exchangeable and non-exchangeable tokens. Fungible tokens are tokens that are interchangeable and indistinguishable from similar tokens. Meanwhile, non-fungible tokens are unique and can be distinguished from tokens of the same type.
The ERC-20 protocol describes smart contracts for tokens that are interchangeable and are typically used to build cryptocurrencies on the Ethereum blockchain. Then, the ERC-721 protocol describes smart contracts for non-exchangeable tokens that are used for things like selling and trading digital assets and collectibles. “Both ERC-20 and ERC-721 contracts manage multiple tokens in a single contract instance. This means that once a contract is implemented on the Ethereum network, it can be used to create multiple tokens of the same type,” added Banyuning.
Banyuning reiterates that token details are stored in contract storage, which in the case of ERC-20 tokens means details such as how many tokens each account has, whereas ERC-721 contracts can store more detailed information about each individual token. “Non-exchangeable tokens, such as the ERC-721 token, are usually used to buy and sell digital assets,” he said.
Seeing so many artists in Bali, the introduction of this token is very potential to be conveyed to them, considering the advantages offered and this token can be used as a digital asset. Verification of owner and origin is an inherent trait of tokens and will provide value when used in combination with physical art. Therefore, the use of blockchain technology is offered with a decentralized and secure system for maintaining asset data.
Then, art appraisal is highly dependent on the authenticity of the art, and using tokens as proof of authenticity will bring financial value to the art owner. With tokenization in blockchain technology, it will maintain the existence of data for each incoming artwork so that the authenticity of the work is proven. “Reducing the possibility of counterfeiting will also give buyers confidence in the authenticity of the art they buy and improve the image of the art world in general,” concluded Banyuning.