Blockchain will enable Governments, Museums and Cultural Organisations to establish new streams of revenue. Nations with rich cultural heritage may experience a new economic boom in the near future. Here is how, why and who is working to realise it.
Since the latest release of the documentary inspired to one the most famous baroque painter Caravaggio titled “l’anima e il sangue” (“the soul and the blood”) something could change in Italy, this movie has been an unexpected success collecting 1,2 Million in only 3 days, winning several awards around the globe and several newspapers were talking about it. What does it mean? It means that people are interested to culture and all around the globe Italian culture can definitely be a good source of income, or better, can be optimised in a better way using modern strategies to promote it. This movie went through #40 Caravaggio’s paintings showing several stunning locations (like churches and historical buildings) in Rome and Naples.
The true is the following one: Italy is not gaining, how much it could do, on its assets, like its 54 sites already inserted in the world heritage list (UNESCO), the highest number by country in the world ?
Just as a reference, here below two of the major cultural sites in the Country:
– Archaeological Circuit “Colosseum, Roman Forum and Palatine Hill” has 6.181,70 visitors per year and earns € 41,440,839.00
– “Excavations of Pompeii” has 2,621.80 visitors per year and earns € 21,076,994.55
While, the total income that comes from Italian museums is growing fast year after year: € 193 million equal to 50 million of visitors in 2018 VS € 126 million equal to 38 million in 2013.
However, the vast Italian heritage requires also investments and dedicated funds. Associations like Mibact and Civicum have recently stated that the Italian Government spends up to 40 times the revenue coming from ticket selling.
Moreover, funds dedicated to preserve and valorise this heritage may shrink in the near future since the effort of the Italian Government to introduce new social tools and investments to foster the economic growth.
The Blockchain technology may offer a range of solutions aimed at addressing these challenges. Companies such as Brickchain Investments aims at registering, tokenizing and trading real estate assets on the Blockchain network. The broad objective of these companies is to create a liquid market for real estate assets, comparable to the well-known stock-market.
In a hypothetical scenario, how much Italy could gain by applying this methodology to the Colosseum in Rome?
The Journalist Sergio Ferraris has made a study to determine the possible economic evaluation of the Colosseum in Rome, concluding in a total of €267,4 M.
These calculations were based exclusively on a “material” profitability as if the Colosseum were a bolt without considering the cadastral value or the value of the brand, which some agencies estimate at €91 billion.
Thus, the Italian Government may decide to tokenize and trade 40% of the value of the Colosseum, receiving from the market more than € 100M of liquidity. Other collateral gains would include: the increased value of the asset due to its increased liquidity and the possibility to include this specific asset in the State balance sheet, lowering sensibly the debt/GDP ratio.
The Italian Government may decide to tokenize and trade 40% of the value of the Colosseum, receiving from the market more than € 100M of liquidity
While from the investor point of view, the affair would be interesting due to a certain number of reasons, such as: a net profit of € 38,2M per year shared, a solid investment that will increase its value over the years and the high margin to improve the economic performances of the site (e.g. the Tour Eiffel accounts for € 101,5M yearly only for ticket selling).
Moreover, the power of Blockchain would create “shares” of the Colosseum monument, giving the possibility of this investment equally to small and big institutional investors.
The scenario drawn in this article may be not to futuristic. Companies like Brickchain Investments aims to trade the first real estate assets by the end of the 2018, while other players are planning to do the same by 2019–2020.
People behind this article
Francesco Impari is the Director of Brickchain Investment ltd, a London based company dedicated to register, tokenize and trade real estate assets on the blockchain network, with an ICO scheduled for mid of October 2018.
Davide Leggeri is a management engineer with more than 8 years of experience in the real estate industry, mainly focused on asset management and investment activities. After having worked for the biggest Italian asset management company, during the last years, Davide is committed to help foreign investors in setting their local platform in Italy.