‘It Provides a Competitive Advantage’: Why Dealer Stefania Minutaglio Is Embracing Cryptocurrency and Blockchain Technology
Italy's 11 [HH] Art Gallery is one of the first galleries that allows—and even encourages—collectors to pay using cryptocurrencies.
Though the art world may imagine itself, perhaps flatteringly, at the forefront of culture, when it comes to embracing new technologies, the industry often opts for a more quill-and-ink model than any new-fangled wizardry.
In recent years, however, many have recognized the legitimacy of cryptocurrencies and blockchain technologies, but while thought-provoking talks have been hosted and token masterworks have been purchased with the novel currencies, these technologies remain far from commonplace today. Reasons for the hesitation are numerous: cryptocurrencies are known to be notoriously mercurial—valuable one day, worthless the next—and remain opaque, both in value and use, to many. Another possible drawback? The blockchain technologies that undergird cryptocurrency transactions are public, perhaps allowing too much transparency for some.
Still, some are leading the way for the industry. Among them is Stefania Minutaglio, art dealer and head of 11 [HH] Art Gallery based in Rome and Miami, one of the few dealers to have embraced cryptocurrency.
On the eve of a new year, we spoke with Minutaglio about why she thinks cryptocurrency is the way ahead.11 [HH] Art Gallery is one of the very first in Italy to accept cryptocurrency. For someone largely unfamiliar with cryptocurrency, what does this mean exactly? Can you detail how you and your artists are paid? (And do the artists use cryptocurrency too?)
No doubt our gallery is a forerunner in terms of cryptocurrency in the art world. Our market is evolving fast and global; we may not like it, but we cannot ignore it. Yet we prefer to cover our eyes, and despite so much talk about it, only a few of us may affirm to actually understand what the digital revolution is.
In a nutshell, a cryptocurrency works through a technology called blockchain, basically, an ever-growing list of data called blocks, written in a public and distributed ledger. Each block is transparently validated by several thousand nodes around the world. The information contained in each block passing from one node to another in the chain cannot be altered, manipulated, or overwritten in any way. The blockchain system is as impregnable as a fortress and is not hackable. It seems like a Columbus’s egg—so brilliant and simple and easy.
I simply opened a wallet for the gallery after complying with all the anti-money laundering regulations. Now I can accept payments in crypto as easily as using Paypal. It’s not that different; you only need to use a public key, instead of an email in order to receive and send a payment. It’s fast and easy, though not all our artists wish to be paid in cryptos. Most of them still are unfamiliar with it. So when we receive payment in digital currency from our clients, we still pay our artists in fiat currency.What are the benefits of a cryptocurrency purchase for the gallery, the artist, and the collector?
In a nutshell, for galleries, trading in crypto will provide a competitive advantage that will soon make a difference. Who is left behind will no longer maintain their leadership on the market? But even the young emerging galleries will finally have a real advantage over the larger and more structured blue-chip galleries that have not been able to evolve.
For artists: cryptos are a far more ethical way to be paid and maintain control in the sales process. What is alluring to artists—and to us all—is the possibility of exchanging value without a centralized governance—without asking for anyone’s permission.
For collectors: cryptocurrencies and blockchain can actually democratize fine art investment, make due diligence easier, and reduce forgery.
Why did you decide to adapt to cryptocurrency? Do people seem hesitant to pay in?
I simply decided I couldn’t, and wouldn’t, be left behind. I realized how this revolution is deeply affecting our lives. The impact on a social level is much greater than on a financial level. We are re-shaping the perception of our reality, and re-defining our needs. Cryptocurrency and blockchain are increasingly becoming synonymous with democratization, creating a more ethical approach to the global economic system.
However, the average understanding is still limited. Many believe it to be unstable (and this is true) and unsafe (this is not true), others a passing fad (absolutely untrue). There actually are tangible risks that need to be worked on, mainly related to the large volatility of the exchange value with fiat currencies. Also, using cryptos implies skills that are not within everyone’s reach, even if opening a wallet and using an exchange platform is now extremely easy and becoming more and more user friendly.What are the drawbacks of cryptocurrency? What measures do you have to take into account considering its volatility?
As I said, there actually are tangible risks related to the large volatility of the exchange value with fiat currencies. The best option to combat volatility compared to exchanging with a fiat currency is precisely to avoid exchanging into fiat currency. Moving to cryptocurrencies requires a paradigm shift in thinking. The first prejudice to get rid of is the idea that a cryptocurrency is a digital equivalent of traditional currency, which you can “translate” at any moment. It’s not. A cryptocurrency is a store of value in itself and imposes a new perspective based not on the liquidity of cash, but on the interchangeability of value.
Some of our clients choose, for example, to exchange their assets (an artwork, in our case) for other assets within a specific blockchain-based ecosystem (called IDON) adding value to their properties, without passing anymore for a traditional currency.
What impact has the pandemic had on your gallery? Have you experienced any shifts in interest in cryptocurrency? If so, please explain?
Of course, the global pandemic has had a serious impact on my business. The “physical” gallery remained closed during the lockdown. Actually, we were closed for half of the year, and for the other half we received visitors by appointment only. This implies many consequences, starting with the dematerialization of personal relationships. But the perception of money has also dematerialized. There has been a significant development in digital payments since retailers have urged consumers to avoid cash in an attempt to minimize physical contact. The pandemic has opened the doors to a new perception of values and needs. How we manage money is an essential component of that perception.
Do most of your clients pay more traditionally?
Oh yes, definitely. Only a very, very small percentage of them pay in cryptos. A few early adopters are leading the way for many others to come. Perplexities remain among users, but soon we all will be familiar with it. And we will start to perceive our digital wallets as a reliable store of value.
Learn more about 11 [HH] Art Gallery with Artnet Gallery Network.
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