The British Museum is one of the few museums to utilize NFTs.
In Covid-19 times, public museums around the world are facing considerable financial pressure due to lockdowns and unaccommodating government budgets.
For some museums, the non-fungible token (NFTs) industry has provided some shelter from the storm. Various art institutions ranging from dealerships like Unit London to museums like the Belvedere Museum, the Whitworth Museum and the British Museum are already on board. However, despite the lucrative returns the NFT marketplace offers, few museums have jumped on the Ethereum bandwagon.
There is a multitude of reasons for museums to be apprehensive. First, NFTs are uncertain and volatile. Like other cryptocurrencies, NFTs, including ones issued by celebrities, are risky. Many NFTs have lost considerable value over short periods of time. Many museums are hesitant to rely on something so precarious to generate money.
To some charities or other not-for-profit organizations, owning something like an NFT may even seem inappropriate. As a result, museum boards may compel the museum to liquidate any NFTs they receive or mint.
In a similar vein, are NFTs in line with museums’ goals? NFTs are neither physical nor are they original works of art. Having said all of this, NFTs are still fresh and more museums may be open to them in the near future.
Second, NFTs sideline institutions, for they value the artists themselves, eschewing the role of the intermediary. A basic ethos of NFTS is decentralization and this allows buyers to directly support the artist via small contract royalties.
A museum would be seen as an intermediary, an obstacle to the spirit of freedom in the NFT industry. Even if a museum sees the potential for good returns and wants in, there are two questions raised: “Does monetization impede public access to collections?” and “Are there agreements in place to ensure the income generated is properly reinvested?”
These two questions must be answered in order for a museum to enter the NFT fray.
The third major issue is regarding the ambiguity of NFTs’ value. The NFT is separate from the original artwork. Even after NFTs are minted and sold, the owners of the original art piece are still the owners of the original art piece. In other words, the original artist is not necessarily poised to profit from the NFT minted from her or his art.
Furthermore, NFTs, like art itself, are subjective in their value. Indeed, some original artists have minted and profited successfully from their own NFTs, but the waters become muddier when a museum or another intermediary enters the picture.
In terms of value, for example, like a book with an original autograph from the author versus the same book without the autograph, an artist-minted NFT could yield more value and interest from collectors as opposed to an NFT minted by a museum. Furthermore, even when a museum has precious original art exhibits, there is no guarantee of revenue if the museum starts minting.
Lastly, NFTs are very hard to understand! Folks managing and working in museums are experts in art, art history and curation. NFTs are much more related to cryptocurrency than to art. However, NFTs are arguably more complicated than its crypto-siblings like Bitcoin and Ethereum, due to the fact each NFT constitutes a distinctive asset. Museum staff might be overwhelmed by trying to calculate how a NFT should be valued and minted among other NFT activities.
On top of all of that, NFTs are traded via cryptocurrencies, a medium museums do not usually conduct transactions in. If that was not enough, there are numerous insurance and legal questions that need to be addressed, and many museums are wary of jumping into an industry that is so strange and new.
On January 27, 2022, in Seattle, two former tech executives, Jennifer Wong and Peter Hamilton, opened the first museum devoted to NFTs. In this brick-and-mortar environment, NFTs are shown on Samsung-donated high resolution screens and are available through QR codes.
Despite their optimism about the project, due to the freshness of the NFT industry, Wong admits, “We’re not experts, and we’re here to learn as much as anyone. We’re counting on feedback and support from NFT enthusiasts to grow the vision.”
The sensory experience plays into it. It does not have to be images on screens alone. At the Miami Art Week, artists were showcasing installations along with their NFTs. Wong and Hamilton chose to open a museum over a gallery because they wanted it to be an educational experience. They felt that unless you were an NFT expert, there was too much context missing for viewers to appreciate, in order to go beyond simply enjoying the visuals and possibly buying an NFT.
In order “to preserve the statehood and history of Ukraine”, according to Alex Bornyakov, Ukraine’s Deputy Minister of Digital Transformation, Ukraine will open an NFT museum. It will be called, “Meta History: Museum of War.” Not only is this a political and historic conservation effort, it is a fundraising mechanism to help Ukraine in its time of need.
As of now, the first three days of the war have been documented. As of March 30, NFTs went on sale starting at 0.15 ETH (about $475). In a time of misinformation and disinformation, this “warline” or timeline of events will serve as a tool of education.
One of the biggest criticisms the NFT industry consistently faces is its enormous carbon footprint. However, there are “greener” options available. For example, the Whitworth museum achieved eight sales of 50 William Blake print based-NFTs each priced at 999 units of “green” cryptocurrency tezos (about $3,290).
A Mixed Bag
As time goes on, innovation will improve and there will be less and less environmental, financial and legal uncertainty. However, for the time being, there is considerable hesitancy by museums to engage with the NFT realm, despite the strong potential for profitable returns.