While the founders of AnimeCoin (ANIME) call it the “most fair, transparent, secure, decentralized, and honest mastercoin on the crypto market,” it is also being dubbed as the weirdest cryptocurrency yet.
This article looks at what is AnimeCoin, how it works, and what it attempts to bank on.
Blockchain Facilitated Artwork Transactions
For centuries, artwork has been used as an alternative investment avenue. The return on investment on art is usually uncorrelated with the stock and bond markets, making it a suitable alternate investment medium. It has the potential to appreciate in value over time owing to its rarity and desirability. However, investing in art also comes with challenges of verifying its authenticity, copyright, rightful ownership, and true valuation.
AnimeCoin attempts to apply blockchain technology to address these issues and cater to the transactional needs of digital artwork.
The word “Anime” is of Japanese origin, and literally means a style of computer-generated or hand-drawn animation. AnimeCoin works as a platform that enables participants to distribute, sign, store, and exchange anime-related digital items on the blockchain.
ANIME is an emerging as a fork of ANI, a cryptocurrency network that was launched in early 2014 and which nimbly trades on cryptocurrency exchanges like Cryptopia and Yobit. After the hard fork, a new AnimeCoin, with the symbol ANIME, will commence trading and will be used in transactions on the newly split blockchain. The hard fork is scheduled to take place on May 30th, 2018. Existing ANI coin owners will automatically receive the new ANIME coins.
AnimeCoins can be purchased on the Cryptopia cryptocurrency exchange, or they can be obtained through mining, or by running a master node on the AnimeCoin network.
How Does Blockchain Help in Art Deals?
Art creators can use the AnimeCoin blockchain as a medium for creating and selling their digital art, without worrying about the complexities that are involved in real-world artwork sales, like safe storage, transport to galleries, intermediary commissions, and pitching to numerous promoters.
The underlying blockchain technology offers the necessary mechanism to maintain the details of genuine ownership, authenticity, and copyright for artwork. The creator, an AnimeCoin network participant, can issue the digital assets in the form of a named image on the AnimeCoin blockchain by paying a fee in AnimeCoin cryptotokens. There is a registration fee based on the size of the image file. These image files then are stored on the trustless and decentralized blockchain; users can also specify the number of copies they want to store. Think about it as creating one artwork that contains a decorated unicorn, and then making 10 copies which can be sold to various customers.
A “standard image similarity algorithm” works in the background that ensures that the accepted images are indeed unique. The algorithm works by comparing the digital parameters linked to the image, and uses a high amount of computational resources that are available with the master nodes of the AnimeCoin network. Images are verified by the blockchain network’s master nodes for their validity and authenticity before they are accepted into the exchange system.
The buyer of the digital artwork can purchase it using AnimeCoin tokens. Potential buyers are allowed to preview a low-resolution image on the network gallery, but can only access the original high-resolution image after a genuine purchase which moves the original from the common gallery to the buyer’s Animecoin wallet.
Continuing the above example of the decorated unicorn artwork – say, if an online content marketing company wants to purchase 3 copies of the available 10 to put one each as a logo on their website, as email signatures, and on their visiting cards. They can simply purchase 3 such copies of the same artwork.
Why Would Someone Trade Digital Artwork?
That’s a million dollar question, as piracy has become a global nuisance in the present world.
AnimeCoin proponents provide a comparison with a rare artifact, like the first published Spiderman comics. Though several paper copies and digital PDFs are available, the original copy still holds a high value of over $100,000. Blockchain-based AnimeCoin platform banks on this authenticity for offering the maximum value to the rightful owners.
Additionally, AnimeCoin network allows a creator to cash in on uniqueness and rarity in a short time, instead of waiting for their creation to age and achieve the status of a masterpiece. By creating a unique masterpiece, it can be sold to a global audience, who can instantly purchase it.
The Bottom Line
While AnimeCoin has been criticized for basing their launch on the thinly traded 4-year old ANI cryptocoin, the founders justify the decision with the synergy in the original concept of ANI that supported digital artwork. ANIME coin network attempts to improve upon the scalability issues, improved transaction processing speed and making the new network more robust. Time will tell how successful this attempt is.
Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns no cryptocurrencies.