From your favorite museum with love #NFT

Since the NFT boom was crystallized by the Christie’s auction of Beeple’s ‘Everydays — The First Five Thousand Days’, art market players from artists, galleries, auction houses to cultural institutions all want a share in the crypto-driven market places. Museums are no outliers. Legacy museums even took the lead in tokenizing their iconic masterpieces as an additional revenue stream. Instead of merely selling another piece of artwork in a digital format, perhaps museums can yield a greater benefit of NFT by incorporating it in their operations, business development, fundraising initiatives, educational activities, and curatorial strategies.

Da Vinci for sale

Museums draw local and international visitors by their collections. Tourists flock to museums listed in guide books to see famous masterpieces first-hand. The concept of art scarcity has been the driving force of museum visits. That is also probably one of the reasons museums do not usually loan their iconic pieces. Museums’ auras shine brighter than auction houses because they act as custodians holding on to unique masterpieces for the public good.

In March 2021, Global Art Museum was one of the first NFT sellers on OpenSea offering tokenized versions of artworks housed in some museums. They were, namely, the Rijksmuseum, Cleveland Museum of Art, Art Institute of Chicago, and Birmingham Museums Trust.[1] However, since the official museums disassociated with that NFT seller, clarifying it does not have permission to sell those NFTs,[2] no bid had been reported and it reflected negatively on the seller’s reputation.

In contrast, when the legacy museums offered the official NFTs of their collections, consumers in crypto communities followed closely online to track when the next drops would be, even traditional collectors set up their digital wallets to ensure they would not miss bidding on their favorite masterpieces. This May, the Uffizi and a series of big-name Italian museums minted their very first ‘Digital Art Works’ (DAW)[3] for public sale on crypto marketplace. The Uffizi tokenized ‘Tondo Doni’ by Michelangelo, accompanied by a certificate of authenticity signed by the museum director, as well as a physical print. Next in line to go on Cinello will be ‘Venus’ by Botticelli and ‘Bacchus’ by Caravaggio. In September, Russia’s Hermitage Museum put on NFT sale Da Vinci’s ‘Madonna Litta’, Giorgione’s ‘Judith’, Van Gogh’s ‘Lilac Bush’, Monet’s ‘Corner of the Garden at Montgeron’, and Kandinsky’s ‘Composition VI’.[4] Like the Uffizi, the Hermitage also provided an authentication endorsed by its museum director. However, it is worth-noting for each artwork offered on Binance, the Russian state museum produced 2 NFT copies, retaining 1 NFT as the museum’s own asset. Closely followed by the British Museum, Hokusai’s ‘The Great Wave’ are offered in 2 NFTs only because of its rarity; while other 200 works by the same artist will be sold on LaCollection.io in editions of 1000 or 10,000.[5]

This phenomenon reinforces our concept of art market. An artwork values higher the scarcer it becomes. An official endorsement by recognized authorities enhances a work’s authenticity. More believable the provenance attracts more interests from buyers. Even a brand-new form of art with a new pool of collectors do not seem to have shaken off the conventional notion of art buying and collecting.

Ownership by emotional engagement

To topple the concept of owning an artwork in monetary terms, the National Museums Liverpool launched an alternative community project. By inviting participants to reflect on their connections with their personal objects, they were also invited to pick an artefact from the museum collection to connect with.[6] In the end, the museum gifted their NFT artefacts to those who demonstrated the strongest emotional engagement.

This initiative does not only demonetize the traditional notion of ownership, it is an effort of democratization and enhancement of accessibility. Rewarding community members by their emotional connections with the museum collection could not have come in timelier in a social media age, where users express their voices with ‘likes’ and emojis. In this way, cultural institutions can foster a stronger sense of belonging among the audience who are becoming more and more social-media conscious.

NFT curatorial strategies

Given the implications of NFT on copyright and other legal issues are far from certain, museums have been thinking creatively to reserve their rights in NFT works sold. As mentioned above, when the Hermitage mints an artwork to sell on a marketplace, it keeps one NFT work in its depository.

The Whitworth Gallery at Manchester University is the first British museum to accredit NFT. It invited artists to produce digital multispectral image of William Blake’s relief etching ‘Ancient of Days’[7], which then became the NFT works for sale. To minimize the carbon footprint[8] from minting, it particularly chose a greener marketplace called Hic et Nunc. A museum’s endorsement of a marketplace can have a branding effect. If more cultural institutions sign up for a greener minting process, it can push existing marketplaces to study and research for methods reducing environmental impact. Such a move lifts up the cultural institution’s public image, and conveys a strong message that NFT art can find ways to go green.

Most of the buzz around the NFT boom in the museum sector so far has been on their tokenization of existing masterpieces and selling on marketplaces. Perhaps more attention should be drawn to how museums should strategize their acquisition plans, against the backdrop of a blooming digital art scene. More established digital artists have already been solicited by auction houses[9] to ensure a certain financial return on their future NFT auctions. The auction houses would hold artists famous in traditional artworks to their core, waiting to exploit on their first digital art creation.

In reality, Museum of Applied Arts in Vienna was the first-ever museum to acquire digital art in Bitcoin[10] back in 2015. The Hammer Museum held a blockchain-inspired exhibition in 2017 called ‘Simon Denny show’.[11] While the UCCA Center for Contemporary Art in Beijing held its first-ever NFT exhibition this March,[12] the Hermitage will open its first in the 4th quarter of 2021.[13] A lot more strategizing can go in the curatorial side of this blooming new art form. This is also the occasion for museums and cultural institutions to play a leading role in the art market in terms of educating and defining NFT art.

NFT fundraising

NFTs are not just art. NFTs can be a source of funds. Because the IRS defines cryptocurrencies as ‘properties’, there incurs no capital gains tax, resulting in 20–30% higher donations and tax deductions.[14] The existence of donor-advised funds also enables belated grant of donations.[15]

The donation to MoMA this March was not the first-ever attempt in NFT donation. The Great Lakes Science Center in Cleveland pioneered the use of cryptocurrencies in their operations as early as 2018.[16] Besides accepting crypto donations, they also make available their ticketing in cryptocurrencies.[17] They provided training to staff and installed QR codes around their establishment. This July, Miami’s Institute of Contemporary Art acquired the NFTCryptoPunk 5293 by Larva Labs through donation.[18]

A future for art

NFT has opened up an additional revenue stream for museums and cultural institutions. Apart from minting and selling digital masterpieces, being a unique token of value, the potentials are endless. As alluring as NFT art is to traditional art buyers and cryptocurrency holders, cultural institutions should find new ways to connect with tech-savvy audiences and reach out to global patrons.

When NFT is still finding its place within all of digital art, maybe this quote from the Hermitage museum director sums up the current status quo well, ‘NFT is a philosophy, a brand-new aesthetic of possession… (which) commands a sense of actual ownership, and… a sense of belonging to a great museum.’[19]

While a museum does not necessarily be ‘great’ to leverage on NFT, and ownership can be virtual, let’s not forget tokenization does not have to be tied with the possession of cryptocurrencies. NFT does not only pose an occasion to rethink our concepts of ownership and possession, it points acutely to what it means to create, see and experience art.

Footnotes:

This article is first published in the Fall 2021 issue of the American Bar Association Section of International Law’s Art & Cultural Heritage Law Committee’s newsletter.

[1] Jim Richardson, NFT “Art Heist” sees famous artworks sold online, Museum Next (Mar. 13, 2021) https://www.museumnext.com/article/nft-art-heist-museums/.

[2] Id.

[3] Francesca Pini, Michelangelo ha un gemello digitale e la Venere di Botticelli è crittografata, Corriere della Sera (May 14, 2021, 8:21 AM)

https://www.corriere.it/sette/cultura-societa/21_maggio_14/michelangelo-ha-gemello-digitale-venere-botticelli-crittografata-a6ff9d50-b307-11eb-a8d8-6fa95675e8be.shtml?awc=9462_1633908289_10677efe472559af30be0880a892e27e#.

[4] Hugh Renolds, Russia’s largest museum experiments with NFT, Cointribune (Sept. 11, 2021, 2:15 PM)

https://www.cointribune.com/en/columns/the-nft-column/russias-largest-museum-experiments-with-nft/.

[5] Redazione Digital Art Rights, British Museum Sells NFTs Including Hokusai’s “The Great Wave”, Cryptnomist (Sept. 29, 2021) https://en.cryptonomist.ch/2021/09/29/british-museum-nfts-hokusai-the-great-wave/.

[6] Crypto Connections: Exploring the Personal, National Museums Liverpool, https://www.liverpoolmuseums.org.uk/collections/cryptoconnections (last visited Nov. 12, 2021).

[7] Anindya Sen, How Museums and NFTs Might Find Common Ground, Hyperallergic (Sept. 30, 2021) https://hyperallergic.com/680464/how-museums-and-nfts-might-find-common-ground/.

[8] Id.

[9] Richard Whiddington, ‘How Sotheby’s And Pak’s Partnership Tapped The Power Of NFTs’, NFTs And Cultural Institutions: A Guide To The Crypto Space For Museums And The Arts, Jing Culture & Commerce (May 4, 2021)

https://jingculturecommerce.com/downloads/nfts-and-cultural-institutions/.

[10] Min Chen, ‘When Crypto and Cultural Institutions Meet’, NFTs And Cultural Institutions: A Guide To The Crypto Space For Museums And The Arts, Jing Culture & Commerce (May 4, 2021)

https://jingculturecommerce.com/downloads/nfts-and-cultural-institutions/.

[11] Id.

[12] Id.

[13] Id.

[14] Richard Whiddington, ‘How Cryptocurrency Could Work For Museums’, NFTs And Cultural Institutions: A Guide To The Crypto Space For Museums And The Arts, Jing Culture & Commerce (May 4, 2021)

https://jingculturecommerce.com/downloads/nfts-and-cultural-institutions/.

[15] Id.

[16] Id.

[17] Id.

[18] Fei Lu, ‘A Historical Marker’: A Historical Marker, How ICA Miami Is Thinking About NFTs, Jing Culture & Commerce (Jul. 22, 2021) https://jingculturecommerce.com/ica-miami-nft-alex-gartenfeld/.

[19] Renolds, supra note 4.

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