XVI. Trend or Emerging Medium? NFT’s Impact on Museums

When it comes to the world of art, the new, uncharted, and exclusive go to the top of the list. As creators expand the definition of art, incorporating digital mediums provides an opportunity to find success. Non-fungible tokens, NFTS, are one emerging way of buying and selling digital art that quickly rose in popularity to potentially transform the art world. Within museums, this new, uncharted frontier asks, how should museums adapt to include this form of blockchain art into collections? This paper will examine the history of digital art and connections to the current trend, the art world’s adoption of NFTs, applications in museums, and the issues and limitations of NFTs. It argues that NFTs are an emerging form of digital art with the potential to benefit artists and enhance museum collections. However, museums may have concerns about copyright, provenance, and their long-term significance.

Within the topic of NFTs there are several nuanced issues that this paper will not address. For information on the far-right extremism prevalent on NFT trading websites please read the linked article. This paper will also not address the environmental impact of NFTs. Many of the articles referenced in this paper mention this in their research; Andrew Chow and Julia Zorthian talk about this on page 43 of their Time article “NFTs and the Crypto Art Revolution.

History & Background

Academic research on NFTs is limited, and approaching the topic as a person without expertise in technology is complicated and nuanced. However, while popular discourse assumes the NFT market – and its associated discussions – are new, NFTs build on an existing framework for understanding digital art. Artists continually adopt new technologies, and museum collections serve as a resource in understanding how NFTs are connected to a history technology driven art.¹ Explaining the evolution of works with a technology-based medium aids in providing context as well as making them less intimidating. Looking at technology’s impact on works over the last century, the new form of exchanging digitally-based is a natural next step in the art world’s long participation in exploring a connection between technology.

In the second half of the 20th century, computer technologies and space exploration rapidly proliferated and popular culture reflected these advancements excitedly.² In the Buffalo AKG Art Museum virtual webinar with Assistant Curator at the Buffalo AKG Art Museum Tina Rivers-Ryan, “NFTs and the Future of Digital Art,” a cultural imagination in the 1960s focused on the way future civilizations would live radically different lives, and the art of this time reflected the cultural shift and suited a new way of life.³ At this time, an entire art movement expressed the joint participation of the collaboration of engineers and artists. Within the movement of art and technology the idea of “computer art” emerged.⁴ Artists began experimenting with computers to make art, most popularly, artists would write a software program, which generated an image and then output the image in one of two ways: send it to a plotter printer or a cathode ray tube screen and then photograph the screen.⁵ The first computer generated images were works on paper exhibited in 1965, which is the first time the art world incorporated computers into this idea of art.⁶ The idea of using both analog and digital machines to create art immediately captured the public imagination.⁷ Museums caught on to these ideas and in 1968 ICA London hosted a major survey of art and digital technology called Cybernetic Serendipity, which explored the capabilities of computations using displays of computer generated art, computer sculptures, computer films, and computer music.⁸

The big story of digital art happened at the end of the millennium with the creation of the world wide web which allowed artists to collaborate globally, by sharing and making work using the internet.⁹ In 1994, Douglas Davis created The World’s First Collaborative Sentence, a collaborative web-based project anyone could contribute a sentence to by loading a website.¹⁰ In 2012, The Whitney Museum of Art stepped up to steward preservation for the project and continues to exist in their collection in two versions: an archival and an active, which contributes to the project’s continued existence decades later.¹¹

The art and technology world received little recognition after the early 2000s, and art trends focused on obsolete technologies until the introduction of the concept of NFTs in 2014.¹² The artist Kevin McCoy and technologist Anil Dash are responsible for the work Quantum (2014), “a block-chain powered way for artists to own and monetize digital work, which laid the groundwork for what is now called Non-fungible tokens (NFTs).”¹³ While McCoy and Dash’s work was not immediately popular, in 2017 more people became interested in the idea that blockchain-based tokens could be used as assets for buying and selling unique tokens.¹⁴ The sector grew in popularity as more trading platforms emerged and ultimately reached its height starting in 2020 when the value of cryptocurrencies exploded in value.¹⁵ As investors invested large sums of fiat currency into the sector, they realized one of the few things to do with cryptocurrency aside from trading NFTs.¹⁶

NFTs sit at an unexpected confluence of the worlds of art and technology. The technology seems almost purposefully confusing because it results from years of blockchain technology and cryptocurrency trade. Blockchain is a decentralized system allowing users to “share records and data related to transactions across a distributed, decentralized network, using encryption to ensure the data is secure and immutable.”¹⁷ Public ledgers are created from transactions, which allow users to remain anonymous while maintaining transparent transaction history.

NFTs are most commonly purchased using the breakout application from blockchain technology is blockchain currency, which is also known as cryptocurrency or crypto. In exchange for allowing their computers’ incorporation as a pathway for distribution of blockchain computing, people are rewarded with “fungible tokens,” a non-unique exchangeable asset.¹⁸ The tokens are identical and interchangeable, equivalent to any government-funded currency.

The non-fungible tokens (NFTs) are a form of receipts used to transfer either symbolic or legal ownership over an associated digital asset.¹⁹ Original artworks and parts of a limited series are both forms of NFTs, both relying on a unique identifier, similar to how those in the art world collect signed and numbered prints. The token itself usually doesn’t contain the data that makes up that digital asset, it is purely a record of ownership and authenticity. The most important part of this token being “its existence on the tamper-resistant digital public ledger.”²⁰ To save space and money on the blockchain, many NFTs contain a URL that points to the data “constituting a digital item being tied to the blockchain—if that link breaks, or the host account isn’t renewed, you own … nothing.”²¹

For clarity, an NFT is not artwork, rights to an artwork, or an exclusive version of a JPG. It is a unique digital identifier and metadata that is recorded in a blockchain, and that certifies authenticity and ownership and allows digital art to appear in this gallery’s format, but remain secure. For the purposes of this conversation a complete understanding of NFTs is necessary, but it’s easier to follow what is next with this information. Much of what now passes as cryptoart, a referring to the exchange erroneously suggests NFTs themselves are an artistic medium, which is ahistorical because NFTs are typically more reflective of internet culture than contemporary art.²²

The Artist, The Art World, & Museums’ Adoption

Since the breakout of NFTs within the crypto world the traditional art world has moved toward adoption. NFTs offer the promise of greatly expanding the ability of artists to package conceptual or digital works in a way that more easily allows them to be bought and sold.²³ The secure digital format of NFTs offers the potential for museums to be alleviated from the labor-intensive process of provenance tracking. As curators move towards providing more digitally curated exhibitions, NFTs provide examples and opportunities in virtual gallery spaces. Together, artists and museums can work together to expand digital practices within the art world and find new ways for audiences to access art.

Optimists see NFTs as an opportunity for the artists not shown or exhibited in either the traditional contemporary art world or the digital art community to achieve success.²⁴ An example of a crypto artist is Andrew Benson, a Los Angeles-based artist, has been experimenting with psychedelic, glitchy digital video work for years; however, Benson did not have much success selling his work until a friend working for a NFT platform asked him to submit his digital work. While initially speculative, the artist agreed to send over a video. The piece, “which looks something like a kinetic, colorful Rorschach” sold for $1,250 ten days later.²⁵ After the success of his original sale, Benson sold ten more works in the same price range. The artist now is considering a future where he is sustained through his artistry, and has said, “Seeing this work find a context and a place where it matters makes me want to think like an artist more.”²⁶ Hearing anecdotal success stories about living artists constructs an image of this technology being beneficial for living artists. Enthusiasts see a vast, unlimited future for living artists who can continue to benefit from future sales of their work, which frees them from the traditional means of buying and selling art where this is not the case.

Museums’ serve their communities and foster diversity through their collections.²⁷ Within the many definitions of what exactly that means, one interpretation is supporting experimenting artists. Before NFTs were trending, museums supported the art community by purchasing the works. Artist Harm van den Dorpel sold minted editions of his work in 2015 and became the first to sell them to museums.²⁸ The Museum of Applied Arts, MAK, in Vienna, Austria acquired 20 editions of 100 versions for their collection.²⁹ Much like The Whitney Museum did with Davis’s web-based project, MAK saw this emerging form of art as a stewardship opportunity and continue preservation of the works in their collections.

Figure 2

In addition to purchasing from artists, museums are also taking existing works within their own collections and minting them for development. The Italian-based Unit museum sold “a hybrid offering of limited edition LED reproductions [of Unit’s collection items] in period-style wooden frames, each accompanied by a unique NFT” as a major fundraiser for the institution.³⁰ The exhibition successfully made sales ranging from €100,000 to €500,000 per piece, with about fifty percent of sales proceeds going back to the licensing museums.”³¹ Typically, museums are restricted from generating revenue from selling off objects in their collections, but museum stores commonly sell off object reproductions for resources. As a result, Unit found freedom within the emerging technology as a way around museum restrictions. Profiting from the photorealistic LED reproductions in period frames was successful for the museum, but its implications for the future of digital collections is still unknown.

Copyright and Legal Issues, Provenance, & Preservation (the fun stuff)

While focusing on the positive aspects of NFTs creates the idea that this digital asset is both beneficial to artists and collectors, there are several concerns about NFTs. For one thing, in 2022, crypto does not seem to be a reliable investment. Because crypto art is closely tied to the rest of the crypto market, the value is dependent on the fluctuations of cryptocurrencies.³² As institutions in the service of society, museums have a responsibility to invest in collection items that are likely to have long-term cultural value; something which cannot currently be said about NFTs. Nevertheless, the trend has not diminished completely and could see another spike in the future.

In a new market with few signs of stability, museum staff are also forced to establish their own policies and procedures. Each sale of an NFT is recorded on the blockchain’s public ledger, which has the potential for museum professionals to precisely trace the provenance of each artwork.³³ However, because the token typically only contains record of ownership and not the data of the digital asset, “most of the assets they point to are not securely archived, effectively divorcing the concept of ownership from the responsibilities of stewardship and reducing it to bragging rights.”³⁴ Within provenance tracking, museums require clear title and complete transfer of ownership to accept works. However, there are no determinations on its long-term success. Museums spent centuries growing the capacity to determine an object’s authenticity, and have an obligation to maintain public trust, whereas, “NFT minters are under no such obligation to explain why they issued an authenticator for a piece of work.”³⁵ Museum professionals, who typically are not crypto experts, then are still obligated to investigate each transaction and research the provenance of each work. Museums are also risking losing the public trust by acquiring works from sources not yet proven as trusted.

One solution museums have begun to establish as a solution is a separate written document, which could integrate into NFTs as a standard requirement for minting a work.³⁶ The document, called a smart contract, should “properly indicate the code comprising NFTs provides the barest of foundational structures” containing simple descriptions and mandatory language.³⁷ Currently, the data encrypted into an NFT is limited to the title, the creator or minter of the NFT, how many NFTs with the same content exist, the functionality facilitating the recording of transactions of the NFT, a link to the content, and a built-in resale royalty, which is contingent on the future transaction occurring on the same marketplace.³⁸ Articulating in a separate document mandatory language around how a creator’s work is to be viewed, displayed, sold, maintained, and generally used alleviates some worries around authenticity, because of the limited content and function of NFTs.³⁹ Before contracts are written, the collecting institutions and creators need to fully understand NFTs, the limitations, and copyright laws to then have clear procedures and standardized documents in place; simple, right?⁴⁰ The best option currently is specifically drafted agreements tailored to each individual NFT and attached to the NFT the same way that the files that constitute the artistic content are attached.⁴¹ Nonetheless, if the solution is separate documentation to prove the authenticity of an NFT, which an NFT supposedly is already, then the asset becomes convoluted.

Another concern associated with legal ownership is copyright infringement. The Rijksmuseum in Amsterdam provides open access to their collections and encourages audiences to download the images.⁴² With their decision, the museum gained a global audience, infinitely larger than what they could support using their physical space alone. Unsurprisingly, works from the Rijksmuseum collection have been found on NFT Marketplaces. A group calling itself Global Art Museum unveiled a collection of NFTs based on paintings from famous institutions, including the Rijksmuseum.⁴³ By taking images from the museum’s digitally available collections, the group minted blockchain versions of them. The language they used in the listing suggested the museum authorized the group and proceeds benefited the museum, but the institutions had established no partnership. While the Rijksmuseum does not require permission for creative uses of its collection, other museums do not take the same stance and have to contend with the same infringement opportunities.

When copyright infringements do occur, enforcing intellectual property rights for works on the blockchain is a bit more complicated.⁴⁴ Normally, if there is an infringement concern regarding information online, the copyright holder can submit a take-down request to the web hosting service. If the request is granted, the web hosting service simply removes the content from their servers. NFTs are coded into a decentralized system, the entire network needs to be re-coded, which is not as easy.⁴⁵ Standards and protocols are still in development, but until the articulated agreements and case laws happen, there are no reliable remedies.⁴⁶

While becoming popular, others are worried about access to this world and long-term value of the asset. Many artists of color and women artists already feel disadvantaged within the art field and some see the process of minting as a barrier. For some artists, the most difficult part of the traditional art world is the need for artists to have galleries or a mediator in order to become successful. NFTs are marketed as egalitarian, freeing artists to sell directly to consumers, and no longer need the specific pedigrees to create a career for themselves. Artists can make their art freely accessible on the internet while still monetizing it, like the artist Andrew Benson whose art is linked above. The potential accessibility is an interesting value congruence with museums as collection digitization becomes popular in the field.

Opponents also argue against NFTs’ ability to provide opportunity to new artists. Itzel Yard, a Peruvian artist, points out “White men have the advantage from the start in crypto; it’s obvious that they’re the first to build up the space.”⁴⁷ As the digital asset moves toward mainstream adoption, there is a lack of balance between those focused on accruing wealth and those focused on equality. Most NFT collectors seem motivated more by financial opportunity or fandom than by connoisseurship and appear unaware that digital art is an expansive field with a decades-long history. Yard agrees, “There’s a lot of collectors that think about this as a business and they see white men as the more secure investment.”⁴⁸ Much like the traditional art world, the safest art investment is big-name, white, male artists and the vast majority of the market is limited to selling works for under $100.⁴⁹

One of the reasons white men seem to always have been an early-adopter of technology is the financial barriers to enter. It costs money and requires tech savvy to sell an NFT, which could prevent some creators from joining in on the action. Many believe young artists of color in particular will be left out, as they have long been marginalized in the traditional world of art.⁵⁰ While Yard has risen to become a success story in the digital community overwhelmingly populated by white men, she advocates for others who have already hit the glass ceiling. As many cultural heritage institutions are concerned with issues of accessibility and representation, considering how NFTs reinforce systemic inequality is important.

Does this Technology Make the World Better?

While museum’s wrestle with finding the best way to serve their communities and democratize their collections, NFTs offer a potential solution. From displaying digital art in gallery spaces, to monetizing the museum’s collection, museums are going to continue learning more of the possibilities of NFTs. Artists, too, are learning about how to find success on the blockchain. Joining together with the finance and technology worlds, NFTs are a new and vast investment. The potential impacts of NFTs in museums is vast as the traditional art world integrates blockchain technologies.

Ultimately, the technology itself is not harmful; mediums are merely an extension of ourselves. The result of this technology simply expands the limitations of humanity. In this way, NFTs are exposing a disconnect between museums, the art world, and the field of technology. While trying to integrate contemporary art, museum staff must make decisions about emerging issues such as NFTs and see if there is some way to transform this commodity into a collection item that reflects the values of the institution, meets the legal and ethical standards, and holds long term value in terms of community accessibility. For now, any claims about long-term effects to the art world can only be speculative, but as NFTs become more common, museums need to create a set of standard practices and procedures to address emerging issues. Most importantly, museums have the opportunity to influence best practices and standards in the NFT field.

Notes

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1. Tina Rivers Ryan,“Token Gesture,” Artforum. ↩︎

2. Buffalo AKG Art Museum, “NFTs and the Future of Digital Art with Assistant Curator Tina Rivers Ryan,” 9:40. ↩︎

3. ibid., 10:00. ↩︎

4. ibid., 12:15. ↩︎

5. ibid., 13:00. ↩︎

6. ibid., 14:20. ↩︎

7. ibid., 15:00. ↩︎

8. ibid., 15:10. ↩︎

9. ibid., 22:35. ↩︎

10. ibid., 24:00. ↩︎

11. Douglas Davis: The World’s First Collaborative Sentence Launched 1994, Restored 2013,” Whitney Museum of American Art. ↩︎

12. Buffalo AKG Art Museum, “NFTs and the Future of Digital Art with Assistant Curator Tina Rivers Ryan,” 36:52. ↩︎

13. “Anil Dash & Kevin McCoy,” The Webby Awards. ↩︎

14. Buffalo AKG Art Museum, “NFTs and the Future of Digital Art with Assistant Curator Tina Rivers Ryan,” 37:25. ↩︎

15. ibid., 38:50. ↩︎

16. ibid., 39:19. ↩︎

17. Elizabeth Merritt, “NFTs, Cryptocurrency, and Museum Practice,” Center for the Future of Museums Blog (American Alliance of Museums). ↩︎

18. ibid. ↩︎

19. Buffalo AKG Art Museum, “NFTs and the Future of Digital Art with Assistant Curator Tina Rivers Ryan,” 3:40. ↩︎

20. Andrew R. Chow and Julia Zorthian, “NFTs and the Crypto Art Revolution,” in Time Magazine, 38. ↩︎

21. Elizabeth Merritt, “NFTs, Cryptocurrency, and Museum Practice,” Center for the Future of Museums Blog (American Alliance of Museums). ↩︎

22. Tina Rivers Ryan,“Token Gesture,” Artforum. ↩︎

23. Joel Ferree, Jeffrey Blair, and Sarah Conley Odenkirk,“NFTs and the Museum Part 2: Legal Issues for Acquisitions,” LACMA Unframed. ↩︎

24. Buffalo AKG Art Museum, “NFTs and the Future of Digital Art with Assistant Curator Tina Rivers Ryan,” 4:30. ↩︎

25. Andrew R. Chow and Julia Zorthian, “NFTs and the Crypto Art Revolution,” in Time Magazine, 41. ↩︎

26. ibid., 41. ↩︎

27. “Museum Definition,” 2022, International Council of Museums. ↩︎

28. Buffalo AKG Art Museum, “NFTs and the Future of Digital Art with Assistant Curator Tina Rivers Ryan,” 45:00. ↩︎

29. ibid., 45:15. ↩︎

30. Scott Reyburn, “Museums Are Cashing In on NFTs,” The New York Times. ↩︎

31. ibid. ↩︎

32. Joel Ferree, Jeffrey Blair, and Sarah Conley Odenkirk,“NFTs and the Museum Part 2: Legal Issues for Acquisitions,” LACMA Unframed. ↩︎

33. Andrea Ledesma, Jeremy Munro, Erin Canning, and Claire Blechman, “MCN Insights: NFTs Are a Scam,” MCN. ↩︎

34. Tina Rivers Ryan, “Token Gesture,” Artforum. ↩︎

35. Andrea Ledesma, Jeremy Munro, Erin Canning, and Claire Blechman, “MCN Insights: NFTs Are a Scam,” MCN. ↩︎

36. Joel Ferree, Jeffrey Blair, and Sarah Conley Odenkirk,“NFTs and the Museum Part 2: Legal Issues for Acquisitions,” LACMA Unframed. ↩︎

37. ibid. ↩︎

38. ibid. ↩︎

39. ibid. ↩︎

40. ibid. ↩︎

41. ibid. ↩︎

42. “Now in Rijksstudio.” Rijksmuseum. ↩︎

43. Sarah Cascone, “A Collective Made NFTs of Masterpieces Without Telling the Museums That Owned the Originals. Was It a Digital Art Heist or Fair Game?” Artnet News. ↩︎

44. Joel Ferree, Jeffrey Blair, and Sarah Conley Odenkirk,“NFTs and the Museum Part 2: Legal Issues for Acquisitions,” LACMA Unframed. ↩︎

45. ibid. ↩︎

46. ibid. ↩︎

47. Andrew R. Chow and Julia Zorthian,“Nfts Are Thriving—Can the Artists Thrive Too?” TIME Magazine, 46. ↩︎

48. ibid., 46. ↩︎

49. Buffalo AKG Art Museum, “NFTs and the Future of Digital Art with Assistant Curator Tina Rivers Ryan,” 45:00. ↩︎

50. Andrew R. Chow and Julia Zorthian,“Nfts Are Thriving—Can the Artists Thrive Too?” TIME Magazine, 46. ↩︎