In post-Covid times, museums are constantly looking for ways to explore new revenue streams and additional sources of income. Digital technology has the power to transform the role of museums and enable them to utilise their collections and assets in new and exciting ways. One of the prime examples of this on many museum professionals’ lips right now is the opportunity presented by Non-Fungible Tokens – otherwise known as NFTs.
But what exactly are NFTs and what can they do for museums?
At MuseumNext Digital Summit a panel of experts including Alistair Hudson (The Whitworth and Manchester Art Galleries), Bernadine Bröcker Wieder (Vastari), Frances Liddell (University of Manchester), Scott Smith (National Museums Liverpool) and Poppy Bowers (The Whitworth) discuss how NFTs could benefit the sector in the future, and what risks they could present.
What are NFTs?
NFTs are tokens that act as a certificate of authenticity for a digital asset, recorded on the blockchain. The digital asset itself is usually saved on permanent storage and what that digital token enables is that you can own it within your own personal wallet.
What it has enabled for digital artists especially is creating scarcity with digital assets but also the smart contracts that these tokens employ can allow for resale royalties when the object is sold in the future. NFTs also create a more direct connection between the creator of that digital certificate and whoever decides to buy it in a digital world.
As an example of how NFTs can be used, take for example the recent collector who purchased a work by Banksy. The work was minted as an NFT and then burnt so the physical asset no longer existed. Because the physical asset no longer existed, it made the NFT more valuable and it ultimately sold for $380,000.
NFTs have been active since the early 2010s but it’s only really now that this movement is starting to gain momentum – particularly since an NFT sold at Christie’s for $69 million.
NFTs in Action
In September 2018, as part of her PHD research at the University of Manchester, Frances Liddell began working with National Museums Liverpool on a project looking at how to use NFTs beyond their monetary value and more specifically, use them within museums and for community engagement. Working alongside Scott Smith, Head of Digital at National Museums Liverpool, initially the goal was to help bridge the gap between the museum audience and the blockchain through personal connection – essentially embedding personal relationships into an NFT. The NFT then becomes someone’s personal value or connection to an object rather than an image or a commodity.
As she explains within this panel discussion, adding extra metadata to the NFT helps to bolster a deeper connection. This project evidenced that there is more to a museum NFT than just commoditising the collection.
The Ancient Days of NFT
Poppy Bowers is the Exhibition Curator at The Whitworth and Lead Curator of the major new 2023 exhibition; Economics, the Blockbuster. Alongside Alistair Hudson, Director of The Whitworth and Manchester Art Gallery, they have been looking at innovative ways to use the mechanisms of finance, banking and economics as part of the exhibition – and in this case, NFTs.
As they explain within the panel discussion, their initial goal was to redirect the capital flows around NFTs into social capital. In this case, the aim was to create an NFT from the museum collection and use the proceeds of the sale to fund a Whitworth Community Fund. The art world has been complicit with money for a long time so the view was to embrace this and bring the collection into operational as well as representational use.
Managing the risks
There are of course risks associated with NFTs, as the panel explore. For example, the ethical consideration about data and the nature of trading digital representations of works as commodities. There is also the question of the intricacies of the technology: explaining what blockchain is and how NFTs work can quickly become elitist if the wrong language is used – as can so often happen with tech.
Copyright was also an issue. It’s important to be clear about what the museum is actually giving away. There is no physical ownership and people do need to understand that. There are risks with any technology but with new tech, there is naturally a sense of hesitation in the unknown. NFTs are commercialising aspects of a museum’s collection but in a non-traditional way that steps away from tea towels or prints so there are questions that need to be asked in the public domain to retain that sense of open-ended discussion.
The idea of decentralisation of a museum and their collections or relinquishing control through NFTs is important to recognise. But so, equally, are the risks of new technologies and the potential for scamming and blockchain fraud.
As a future revenue source for a museum, NFTs represent an interesting prospect. However, the world of cryptocurrency can challenge the ethics of museums when it comes to selling NFTs. The anonymity of crypto sales often means it’s difficult to know where the money is coming from.
In addition, there are environmental concerns to consider when dealing in blockchain technology. Ultimately, NFTs have the potential to harness decentralised digital technology to really enable museums to have a greater social effect in the world and empower institutions to do things on their own terms.
Interested in learning more about Museums and NFTs, read more here.