If you’ve been on Twitter for any length of time or follow a lot of contemporary artists and celebrities, you’ve probably heard of NFTs by now. Just the other day, scrolling through instagram, I saw that Ozzy Osbourne will be selling an almost 10,000 piece collection of non-fungible tokens launching January 20th, 2022. They will be called CryptoBatz and are NFT bats with the unique ability to “bite” another NFT in a user’s digital wallet and mutate with it to create other tokens. (Watch Ozzy Osbourne preview his new “CryptoBatz” NFT collection). The excitement around NFTs skyrocketed on March 11, 2021 when the digital artist Beeple sold an NFT for $69 million. It appears everyone is jumping in on the crypto craze (well not everyone, but we’ll get into that later) right now and it forces the question, what will the impact be on the art world?
Before we ask ourselves about the potential opportunity or risk of the inevitable, let’s first define some terms. First of all, according to the Washington Post, “an NFT, or non-fungible token, is a unique digital representation of a good — for our purposes, a work of art. It’s akin to a certificate of authenticity or a deed and it’s recorded on a blockchain (more on that momentarily). Typically (forget art for a minute), an NFT represents something in digital form that you might not previously have thought of as a good,” (Will NFTs Transform the Art World? Are They Even Art?). A blockchain can be defined as a publicly shared ledger that allows digital information to be recorded permanently without alteration and without the need for a third party site or institution. Most cryptocurrencies like bitcoin and Ethereum use blockchain technology. Sebastian Smee for the Washington Post writes, “cryptocurrencies are virtual currencies secured by cryptography, making them impossible to counterfeit or double-spend. Because they’re not issued by a central authority, they’re theoretically immune to government manipulation.” It is important to note here that, predating the launch of Ethereum by five months, in February 2015 conceptual artist Sarah Meyohas released the first tokenization of art on the blockchain: Bitchcoin. On her Bitchcoin website Sarah Meyohas states, “Bitchcoin proposed three ideas that are only now being seriously considered: using blockchain to track ownership of artwork, public fractional ownership of artwork, and blockchain itself as a medium,” (Bitchcoin, Sarah Meyohas). Blockchain technology, whether we like it or not, has a huge potential for immediate and lasting impacts on the art world. According to Justin Sun, a Chinese American tech entrepreneur who has spent millions on NFTs, NFT art sales in the first half of 2021 generated $546 million on more than 190,000 transactions (Washington Post). NFTs and blockchain technology might be the future for museums. As an artist, art historian, curator, or gallery owner, one must be asking themselves, what does this mean for me and what I do?
There are several ways that museums across the globe have already incorporated NFTs and blockchain technology. “Among the larger museums, the Uffizi in Florence sold an NFT authenticated digital rendition of Michelangelo’s “Doni Tondo,” (1504–1506) and the Hermitage Museum in Saint Petersburg has initiated plans to auction some of its most renowned masterpieces as NFTs. Recently, the British Museum announced plans to sell NFTs of 200 Hokusai artworks in tandem with its upcoming exhibition. Among others, ICA Miami acquired a Cryptopunk NFT while the Whitworth art gallery in Manchester sold a limited edition based on William Blake’s “The Ancient of Days” (1827),” (How Museums and NFTs Might Find Common Ground). It is important to note here that NFTs are not a new art medium. Sebastian Smee explains that NFTs are “financial instruments (that) make it easier to sell digital files by creating scarcity.” NFTs can also be divided into fractions and sold as shares, meaning their value could increase. Some see this as a way to democratize art ownership and investment. Smee provides an example of this in his article from early December when more than 28,000 buyers spent a total of $91.8 million to acquire 266,445 “shares” of a digital work called “The Merge”. Are NFTs the solution to museums current revenue problems? Some museums, like the British Museum and the Academy Museum of Motion Pictures have issued their own tokens and the Institute of Contemporary Art, Miami accepted an early NFT from a donor. (4 Reasons Museums Aren't Cashing in on NFTs). However, these are all exceptions, not rules, and there are still many issues with incorporating blockchain technology into the museum structure.
First of all, as you may have realized by now, NFTs and blockchain technology are complicated. That being said, museum staff are not equipped to facilitate this new technology into their systems. Also, most blockchain technology uses cryptocurrency which not a lot of museums are used to dealing with. In the article, “4 Reasons Museums Aren’t Cashing in on NFTs” the author also points out the fact that the NFT market values artists over institutions. “One underlying reason the market for NFTs tied to artwork has thrived is because buyers view purchasing and holding an NFT as a means to interact with and financially support the artist… More broadly, the ethos is one of decentralization, and NFT buyers are less likely to be enthusiastic about an intermediary joining the fray.” Not only that, but NFTs are also risky and museum boards may veto their charitable organization owning them due to their potential for dramatic loss. Museums have just begun widely embracing technology due to the pandemic, are they ready for this huge technological shift? Implementation of digital technology has seen resistance already. “Steeped in an organisational culture shaped by curators where the focus remains academic and rooted in the physical experience of art, adoption has been largely limited to creating digital archives of collections, egged on by the pandemic and the resultant need to raise social media engagement and online access.” (How Museums and NFTs Might Find Common Ground). Another obvious problem is the element of scarcity. Why do you need NFTs when you can screenshot a high quality photo from google images? Bernadine Bröcker Wieder points out this issue in her Apollo article, “Should Museums be dabbling in NFTs?”, writing, “To market limited-edition NFTs of public domain works is to confect scarcity where none exists. Prints of The Great Wave are held in museum collections all around the world and several of these institutions offer high-resolution digital files of The Great Wave freely available for download and unrestricted reuse by anyone, anywhere – no strings attached.” In his Washington Post article, Sebastian Smee further explains, “Creating an NFT does two things: It provides proof of ownership and it guarantees scarcity. The scarcity is really the key part. If you want to sell something that exists only digitally, the problem is that all things digital can be infinitely copied. NFTs don’t stop the copying. But they allow you to distinguish the copies from this one, notional “original.” And they prove, through the ledger, that you own it.” Even if the demand for NFTs in the art world are high, the sheer amount of NFTs flooding the market makes scarcity a big if. Another issue routinely raised with blockchain technology is it’s environmental impact due to the “proof of work” process that requires exuberant amounts of energy, however, most blockchains have since switched to the “proof of stake” process and are now publicizing themselves as carbon neutral or carbon negative. (Washington Post). Another huge issue with NFT art sales is the same problem museums are already trying to face head on, gender bias. A recent study shows that just 5 percent of NFT art sales went to confirmed women creators (L’Oreal Paris USA is Helping Women Artists Get In On the NFT Boom). If NFTs are here to stay, women creators must be recognized and celebrated. Once again, we find an original idea by a woman (Bitchcoin) being turned into a market that excludes her. There are so many countless instances of this happening in art already, do we need to pave the way for today’s boys club?
Despite all of the potential risks and issues involved, museums, art organizations, and entrepreneurs are finding ways to potentially incorporate blockchain technology into the art world. In “A Conversation on Art, Museums, and Blockchain,” authors Stanley Sater and Rachel Wright point to the benefits of blockchain technology in museums licensing and copyrighting departments, “This is where blockchain and smart contracts come in: distributed ledger technology means transparent records of ownership, easily accessible to the licensor and licensee. With smart contracts, rights holders can clearly and directly communicate their terms, and both parties receive the security, trust, and verification through the record chain.” Incorporating blockchain technology into the museum cataloging system has great possibilities for the future of exhibitions and sharing art amongst museums and art galleries. Another way to incorporate blockchain technology is by tokenising the museum ticket, which can then turn buying a museum ticket into an act of micro-patronage. The benefit of crypto is transparency, which allows a museum visitor to see exactly what their money is going towards and could even allow visitors to directly support the artists exhibited. An additional level of transparency is added when discussing the provenance of an artwork. “Beyond its use as a currency, blockchain has the potential to help combat the stolen art and antiquity trade, by tracking domestic and transnational sales of art, and to end authenticity, or “provenance,” issues that plague the art world,” (Blockchain in the Art World). Unfortunately, this transparency might be the exact reason art dealers and auction specialists are veering away from NFTs. “Champions of NFTs think that the transparency and ease of buying and selling NFTs will eventually make dealers and auction houses redundant. They maintain that if everyone can see on a public ledger what something is worth and through whose hands it has passed, there will be less need for middlemen — who take a huge slice of the profits,” (Washington Post). The ability for NFTs to democratize museum funding and reach new audiences is a huge benefit, but are museums ready for that change?
NFTs and blockchain technology might have the potential to completely radicalize the museum structure, but with transparency being the main advantage, is the art world ready to embrace this change? As Meyohas concludes, ‘“The art world is driven by money,” she said. “People want to buy my art because they think they’ll be able to resell it.” But at least the art world tries also to be about something else, she said; namely, art. “It tries to keep the money in the backroom. You don’t display the prices in the front room…With crypto,” she continued, “it’s the opposite. The prices are the first thing you see. It becomes like a stock market culture. It’s part of a general trend of price discovery for everything. But is that good, to know the price of everything all the time?”’ (Washington Post). Is the resistance towards blockchain technology a reflection of the art world’s inability to be transparent, or does it point to a general fear of becoming obsolete? Diane Drubay in her article, “How Blockchain Can Impact Museums?”, discusses how a blockchain-based museum, like the Dutch startup Wunder, can be applied to physical museums. In this model, the museum collection would be owned by the public and managed by the museum. “We see more and more community-based museums popping-up and States disengaging from their museums. Is the future going to give our heritage back to people? Is that the time where the notion of “shared-museum” gets its meaning? We are talking about crowdsourcing and crowdfunding a museum or an exhibition but could we also talk soon about crowd-investing and crowd owning a museum? Is that the birth of total museum inclusion, complete circularity, where we see the beginning of peer-to-peer applied to the museum’s exhibitions and products?” This begs the question, are museums ready for total inclusion?
Sources:
https://news.artnet.com/art-world/biggest-controversies-2021-2049906
https://medium.com/@christina_steinbrecher/what-can-museums-do-with-nfts-e9fe8a1d9fdb
https://www.investopedia.com/terms/b/blockchain.asp
A Conversation on Art, Museums, and Blockchain Stanley Sater and Rachel Wright
https://medium.com/@christina_steinbrecher/what-can-museums-do-with-nfts-e9fe8a1d9fdb
https://www.theartnewspaper.com/2018/06/13/artists-as-cryptofinanciers-welcome-to-the-blockchain
https://theconversation.com/4-reasons-why-museums-arent-cashing-in-on-nfts-yet-171993
https://sgrlaw.com/ttl-articles/blockchain-in-the-art-world/
https://www.apollo-magazine.com/should-museums-be-dabbling-in-nfts/
https://www.washingtonpost.com/arts-entertainment/2021/12/18/nft-art-faq/
https://sarahmeyohas.com/bitchcoin/
https://www.artnews.com/art-news/news/sarah-meyohas-bitchcoin-salon-1234611660/