NFT Fundraising: Ethical, Entrepreneurial, or Inappropriate?

Dr Frances Liddell
(2023)

Dr Frances Liddell (2023)

Dr Frances Liddell
(2023)

In his chapter ‘Ethical, Entrepreneurial, or Inappropriate? Business Practices in Museums’, James Gardner (2011) highlights how ethical discussions in museums focus primarily on collections and exhibitions however it is the ‘business side’ of these institutions that are increasingly creating tensions around ethics and integrity. This includes aspects of management such as governance, marketing, earned income, and fundraising, areas that Gardner notes are most pressured during financial difficulties, and which prompt alternative strategies that range from the ‘entrepreneurial’ to the ‘unethical’.

Whilst Gardner’s reflections focus on the early Millennium, his analysis remains critically important in the current climate of the cultural sector. Indeed, museums continue to face financial pressures fuelled by COVID-19 restrictive measures. A recent UNESCO (2021) report found that cultural institutions saw a revenue loss of an average of 40 to 60 percent during COVID-19, with the American Alliance for Museums finding that many US museums are still reporting pandemic-related financial losses (AAM, 2022). As Marek Prokůpek, Ellen Loots and Diana Betzler (2022) note, this financial precarity has been a catalyst for alternative and novel financial strategies, including the adoption of blockchain technology and non-fungible tokens (NFTs) as a fundraising tool.

In brief, NFTs are a type of digital token traded online using cryptocurrencies. They are recorded onto a blockchain, a distributed ledger technology, and managed through smart contracts, self-executing code deployed into a blockchain ledger (De Filippi, Wray, & Sileno 2021). Since 2017, these tokens have created an emerging decentralised art economy where artists can tokenise their artwork and sell it through NFT platforms without the need of traditional art intermediaries (Bailey, 2017; Reas, 2019; Sacks et al., 2015). In 2021 the technology gained traction in the arts sector, largely facilitated by the sale of Beeple’s Everydays: The First 5,000 Days at Christies, which led to an influx of artists and investment into the field. This also included early experiments from museums such as the Ufffzi, The British Museum, and the Whitworth, as well as ‘pranks’ such as the Global Art Museum, which took works from open access collections including the Rijksmuseum and the Cleveland Museum of Art and attempted to sell them as NFTs on Opensea (Liddell, 2021).

However, these early experiments created tensions across the arts sector. Whilst some viewed NFTs as a potential entrepreneurial approach to fundraising (Lu, 2021), others argued that NFTs were simply ‘scams’ fuelling a speculative and volatile market (Ledesma et al., 2021), similarly those in the OpenGLAM movement questioned whether NFTs were undermining the principles of the digital commons (Bröcker Wieder & McCarthy, 2021). So, what are NFTs to museums? Are they an entrepreneurial, inappropriate, or ethical practice?

ENTREPRENEURIAL?

As noted in Trendswatch (2021), cultural institutions are often slow to adopt new technologies, often using the luxury of time to wait and see how digital trends develop. But NFT fundraising indicates that some institutions are willing to experiment. They are showing a ‘museopreneurial’ mindset, an idea drawn from Brendan Ciecko (2019) who describes a ‘museopreneur’, as ‘one who embraces or assumes characteristics of an entrepreneur to advance their museum’s business model and general operation’.

Indeed, NFTs are a form of ‘disruptive innovation’, a tool said to be part of the ‘fourth industrial revolution’ that could challenge ways of working across different sectors (Swan, 2015; Tapscott & Tapscott, 2018). In this respect, NFT ‘museopreneurship’ represents potential disruption in the cultural sector, a technology that could challenge working models by opening a different market of audiences to museums, diversifying revenue streams, and creating a more sustaining business model.

The NFT market represents a new type of audience defined as the ‘crypto art community’, one that is largely dominated by millennials with a desire to collect digital art, who in some cases may have only recently gained an interest in the art field through the adoption of the technology (Gold et al., 2022; Petterson & Cocksey, 2021). Similarly, NFTs are a new revenue stream that could help to diversify the income of an institution and build financial resilience (Carroll & Stater, 2009). This is supported by resale rights, which are built into the underlying smart contract of an NFT and create additional income when the token is sold on the secondary market. Doing so can generate income beyond the initial campaign, potentially creating a more sustainable revenue model for museums.

INAPPROPRIATE?

Entrepreneurialism brings its own set of risks. For example, as Jen Harvie (2013) notes in her discussion on the ‘artrepreneur’, entrepreneurism risks producing an economy that is driven by individualism and productivity, creating a market that is more competitive, and that potentially undermines artistic and cultural value.

These risks are also apparent in areas of the NFT art market where the vision of a decentralised art economy has failed to be fully materialised due to the frenzy of speculation and capitalistic intent of certain players in the market. Instead, this has simply produced new intermediaries in the form of NFT platforms who control the smart contracts and audiences that individual artists have come to heavily rely upon. This reliance has become increasingly apparent with the growing contentions over resale rights. In the last year the social agreement between artist and platform has been eroded as NFT platforms such as LooksRare and Opensea make royalty fees optional to buyers in a bid to retain their volume of sales. In doing so, these platforms are prioritising the market over the artists, competition over collaboration, and financial over artistic value, all of which are hidden under the illusion of a decentralised art economy.

Similarly, these market dynamics bring unique challenges to NFT ‘museopreneurialism’. Firstly, museums that engage with these platforms also face losing the sustaining element to NFT fundraising since they too will lose their ability to gain income from secondary sales. Secondly, this market-driven dynamic may simply hasten the process of ‘economising’ in museums, an idea that describes a process where ‘behaviours, organizations, institutions and, more generally, objects are constituted as being “economic” (MacLeod, 2020). Therefore, NFT fundraising reduces an institution’s collections into a collection of economic goods, thus creating an economising effect that could compromise cultural value and push museums into being more self-serving, market-orientated, and lacking the ‘sensitivity [of] why they are non-profits’ (Gardner, 2011).

ETHICAL?

In its simplest form, a museum ethics reflects the ‘values on which museums found their operations’ (Papaioannou, 2013). As defined by various scholars, these values include social responsibility, transparency, accountability, integrity, guardianship and reciprocation (American Alliance of Museums, 2017; Besterman, 2006; Marstine, 2012; Marstine et al., 2015; Museum Association, 2022). However, the current market dynamic chases profit over creativity, creating an unequal market that raises questions over the appropriateness and ethical nature of museum practice.

But this market dynamic is not representative of the entire NFT field and there are many artists, platforms, and start-ups who are reflective of these ethical principles. For example, NFT platforms such as Teia, Art Blocks, and Objkt.com challenged the decision made by others to make resale rights optional by outwardly showing their support for artists on Twitter and enforcing resale rights on their platforms (Teia, 2022, Art Blocks, 2022, Objkt.com, 2022). In doing so, these platforms are committing to a more socially responsible market, one that supports artists over sales volume and promotes fair equity and accountability.

These ideas are also exemplified in Transfer Gallery’s and Left.Gallery’s online exhibition Pieces of Me (2021) which was formed as a response to the hyper-commercialisation of art through NFTs. Pieces of Me explored the idea of ‘transacting with intention’, where the process of exchange is used to cultivate a more equitable system of finance (Pieces of Me, 2021a). This is imagined through the development of a ‘solidarity’ model where each work presented in the exhibition is produced by a different artist, but the proceeds of each sale is distributed on a 70/30 split where the artist(s) of the work receive 70 percent of the proceeds, and the other 30 percent is distributed to other stakeholders of the exhibition such as artists, technologists, and curators (Pieces of Me, 2021b). In doing so, this exhibition used the technology to create an equity-based model of remuneration that recognises the labour of every collaborator and distributes value based on different forms of investment. It demonstrated an alternative financial model using NFTs that is built on the desire for transparency, accountability, and fair equity.

Similar ideas are highlighted in the Whitworth’s Ancient of Days NFT project, which launched as part of the Economics the Blockbuster research project in July 2021. The project was an experiment into NFT fundraising that aimed to gain valuable insight into this emerging art ecosystem for the traditional art and culture sector and present this practice through an accessible and critical lens. The NFT consists of a new digital visualisation of William Blake’s original work developed by the imaging team at the John Rylands Research Institute using multispectral imaging (MSI) equipment. It was offered as an edition of 50 with an additional two tokens permanently retained by the gallery (Whitworth, 2021). These were available on the NFT platform Hic-et-Nunc on the Tezos blockchain,[1] which, at the time, was a more energy efficient blockchain than comparable chains (Tezos, 2022; Ethereum Foundation 2022). Each of these editions were sold for 999 Tez,[2] with the sale proceeds contributing to a community fund that supports socially beneficial projects in partnership with the Whitworth’s local communities. Like Pieces of Me, the Whitworth’s project engages in the idea of ‘transacting with intention’ by using the NFT market to support their local community and create a more reciprocal, sustainable, and distributed practice.

Together, these examples outline a new vision of the market that is characterised by fair equity, transparency, and social responsibility - ideas which highlight the emergence of a more ‘distributed’ art economy. Here, ‘distributed’ draws from Paul Baran’s (1964) work on distributed communication networks which describes a network where agency is shared equally among nodes in the network. In contrast, a ‘decentralised’ network describes a sharing of control but includes pockets of power, creating a network that is ‘de-centred’ but in an uneven manner. A ‘distributed’ art economy envisions a more egalitarian and dynamic market where each artist, gallery, and NFT platform holds equal agency.

These examples similarly highlight how museums might engage with this field in a way that is reflective of museum ethics. Indeed, museums could leverage the market to extract and distribute value, acting as mediators, where value flows in and beyond the institution (Dewdney et al., 2012; Liddell, 2022; Morse, 2014). In doing so, a museum works in a distributed manner where its engagement with the market is to support its local communities and its underlying mission. This produces a more dynamic fundraising model, one that is not centred on supporting the institution, but instead supports the values that an institution is founded on.

WHAT ARE NFTs TO MUSEUMS?

‘We don’t need new ethical standards, but we do need a clearer articulation of their application to business practices. And we need a stronger commitment to principle over expediency’. (Gardner, 2011: 294).

NFTs exist in a volatile and speculative market that could have implications in economising the museum. Therefore, the challenges faced in NFT fundraising relate to the socio-political underpinnings of the market where certain actors interact with the technology to cultivate a capitalistic and centralising ecosystem. The examples presented here represent an alternative paradigm that envisions a more equitable, transparent, and distributed market that leverages NFTs as a tool to support digital creativity, rather than digital profiteering. But these ideas are by no means new, indeed, these examples do not represent a new ethical standard, but a ‘clearer articulation’ of how current museum ethical standards might be applied to NFT practice. And as conversations around NFTs in museums continue, ideas such as ‘transactions with intention’, ‘distribution’, and ‘equity’ can provide a clearer understanding of what NFTs are, and what they could do for museums.

In his chapter ‘Ethical, Entrepreneurial, or Inappropriate? Business Practices in Museums’, James Gardner (2011) highlights how ethical discussions in museums focus primarily on collections and exhibitions however it is the ‘business side’ of these institutions that are increasingly creating tensions around ethics and integrity. This includes aspects of management such as governance, marketing, earned income, and fundraising, areas that Gardner notes are most pressured during financial difficulties, and which prompt alternative strategies that range from the ‘entrepreneurial’ to the ‘unethical’.

Whilst Gardner’s reflections focus on the early Millennium, his analysis remains critically important in the current climate of the cultural sector. Indeed, museums continue to face financial pressures fuelled by COVID-19 restrictive measures. A recent UNESCO (2021) report found that cultural institutions saw a revenue loss of an average of 40 to 60 percent during COVID-19, with the American Alliance for Museums finding that many US museums are still reporting pandemic-related financial losses (AAM, 2022). As Marek Prokůpek, Ellen Loots and Diana Betzler (2022) note, this financial precarity has been a catalyst for alternative and novel financial strategies, including the adoption of blockchain technology and non-fungible tokens (NFTs) as a fundraising tool.

In brief, NFTs are a type of digital token traded online using cryptocurrencies. They are recorded onto a blockchain, a distributed ledger technology, and managed through smart contracts, self-executing code deployed into a blockchain ledger (De Filippi, Wray, & Sileno 2021). Since 2017, these tokens have created an emerging decentralised art economy where artists can tokenise their artwork and sell it through NFT platforms without the need of traditional art intermediaries (Bailey, 2017; Reas, 2019; Sacks et al., 2015). In 2021 the technology gained traction in the arts sector, largely facilitated by the sale of Beeple’s Everydays: The First 5,000 Days at Christies, which led to an influx of artists and investment into the field. This also included early experiments from museums such as the Ufffzi, The British Museum, and the Whitworth, as well as ‘pranks’ such as the Global Art Museum, which took works from open access collections including the Rijksmuseum and the Cleveland Museum of Art and attempted to sell them as NFTs on Opensea (Liddell, 2021).

However, these early experiments created tensions across the arts sector. Whilst some viewed NFTs as a potential entrepreneurial approach to fundraising (Lu, 2021), others argued that NFTs were simply ‘scams’ fuelling a speculative and volatile market (Ledesma et al., 2021), similarly those in the OpenGLAM movement questioned whether NFTs were undermining the principles of the digital commons (Bröcker Wieder & McCarthy, 2021). So, what are NFTs to museums? Are they an entrepreneurial, inappropriate, or ethical practice?

ENTREPRENEURIAL?

As noted in Trendswatch (2021), cultural institutions are often slow to adopt new technologies, often using the luxury of time to wait and see how digital trends develop. But NFT fundraising indicates that some institutions are willing to experiment. They are showing a ‘museopreneurial’ mindset, an idea drawn from Brendan Ciecko (2019) who describes a ‘museopreneur’, as ‘one who embraces or assumes characteristics of an entrepreneur to advance their museum’s business model and general operation’.

Indeed, NFTs are a form of ‘disruptive innovation’, a tool said to be part of the ‘fourth industrial revolution’ that could challenge ways of working across different sectors (Swan, 2015; Tapscott & Tapscott, 2018). In this respect, NFT ‘museopreneurship’ represents potential disruption in the cultural sector, a technology that could challenge working models by opening a different market of audiences to museums, diversifying revenue streams, and creating a more sustaining business model.

The NFT market represents a new type of audience defined as the ‘crypto art community’, one that is largely dominated by millennials with a desire to collect digital art, who in some cases may have only recently gained an interest in the art field through the adoption of the technology (Gold et al., 2022; Petterson & Cocksey, 2021). Similarly, NFTs are a new revenue stream that could help to diversify the income of an institution and build financial resilience (Carroll & Stater, 2009). This is supported by resale rights, which are built into the underlying smart contract of an NFT and create additional income when the token is sold on the secondary market. Doing so can generate income beyond the initial campaign, potentially creating a more sustainable revenue model for museums.

INAPPROPRIATE?

Entrepreneurialism brings its own set of risks. For example, as Jen Harvie (2013) notes in her discussion on the ‘artrepreneur’, entrepreneurism risks producing an economy that is driven by individualism and productivity, creating a market that is more competitive, and that potentially undermines artistic and cultural value.

These risks are also apparent in areas of the NFT art market where the vision of a decentralised art economy has failed to be fully materialised due to the frenzy of speculation and capitalistic intent of certain players in the market. Instead, this has simply produced new intermediaries in the form of NFT platforms who control the smart contracts and audiences that individual artists have come to heavily rely upon. This reliance has become increasingly apparent with the growing contentions over resale rights. In the last year the social agreement between artist and platform has been eroded as NFT platforms such as LooksRare and Opensea make royalty fees optional to buyers in a bid to retain their volume of sales. In doing so, these platforms are prioritising the market over the artists, competition over collaboration, and financial over artistic value, all of which are hidden under the illusion of a decentralised art economy.

Similarly, these market dynamics bring unique challenges to NFT ‘museopreneurialism’. Firstly, museums that engage with these platforms also face losing the sustaining element to NFT fundraising since they too will lose their ability to gain income from secondary sales. Secondly, this market-driven dynamic may simply hasten the process of ‘economising’ in museums, an idea that describes a process where ‘behaviours, organizations, institutions and, more generally, objects are constituted as being “economic” (MacLeod, 2020). Therefore, NFT fundraising reduces an institution’s collections into a collection of economic goods, thus creating an economising effect that could compromise cultural value and push museums into being more self-serving, market-orientated, and lacking the ‘sensitivity [of] why they are non-profits’ (Gardner, 2011).

ETHICAL?

In its simplest form, a museum ethics reflects the ‘values on which museums found their operations’ (Papaioannou, 2013). As defined by various scholars, these values include social responsibility, transparency, accountability, integrity, guardianship and reciprocation (American Alliance of Museums, 2017; Besterman, 2006; Marstine, 2012; Marstine et al., 2015; Museum Association, 2022). However, the current market dynamic chases profit over creativity, creating an unequal market that raises questions over the appropriateness and ethical nature of museum practice.

But this market dynamic is not representative of the entire NFT field and there are many artists, platforms, and start-ups who are reflective of these ethical principles. For example, NFT platforms such as Teia, Art Blocks, and Objkt.com challenged the decision made by others to make resale rights optional by outwardly showing their support for artists on Twitter and enforcing resale rights on their platforms (Teia, 2022, Art Blocks, 2022, Objkt.com, 2022). In doing so, these platforms are committing to a more socially responsible market, one that supports artists over sales volume and promotes fair equity and accountability.

These ideas are also exemplified in Transfer Gallery’s and Left.Gallery’s online exhibition Pieces of Me (2021) which was formed as a response to the hyper-commercialisation of art through NFTs. Pieces of Me explored the idea of ‘transacting with intention’, where the process of exchange is used to cultivate a more equitable system of finance (Pieces of Me, 2021a). This is imagined through the development of a ‘solidarity’ model where each work presented in the exhibition is produced by a different artist, but the proceeds of each sale is distributed on a 70/30 split where the artist(s) of the work receive 70 percent of the proceeds, and the other 30 percent is distributed to other stakeholders of the exhibition such as artists, technologists, and curators (Pieces of Me, 2021b). In doing so, this exhibition used the technology to create an equity-based model of remuneration that recognises the labour of every collaborator and distributes value based on different forms of investment. It demonstrated an alternative financial model using NFTs that is built on the desire for transparency, accountability, and fair equity.

Similar ideas are highlighted in the Whitworth’s Ancient of Days NFT project, which launched as part of the Economics the Blockbuster research project in July 2021. The project was an experiment into NFT fundraising that aimed to gain valuable insight into this emerging art ecosystem for the traditional art and culture sector and present this practice through an accessible and critical lens. The NFT consists of a new digital visualisation of William Blake’s original work developed by the imaging team at the John Rylands Research Institute using multispectral imaging (MSI) equipment. It was offered as an edition of 50 with an additional two tokens permanently retained by the gallery (Whitworth, 2021). These were available on the NFT platform Hic-et-Nunc on the Tezos blockchain,[1] which, at the time, was a more energy efficient blockchain than comparable chains (Tezos, 2022; Ethereum Foundation 2022). Each of these editions were sold for 999 Tez,[2] with the sale proceeds contributing to a community fund that supports socially beneficial projects in partnership with the Whitworth’s local communities. Like Pieces of Me, the Whitworth’s project engages in the idea of ‘transacting with intention’ by using the NFT market to support their local community and create a more reciprocal, sustainable, and distributed practice.

Together, these examples outline a new vision of the market that is characterised by fair equity, transparency, and social responsibility - ideas which highlight the emergence of a more ‘distributed’ art economy. Here, ‘distributed’ draws from Paul Baran’s (1964) work on distributed communication networks which describes a network where agency is shared equally among nodes in the network. In contrast, a ‘decentralised’ network describes a sharing of control but includes pockets of power, creating a network that is ‘de-centred’ but in an uneven manner. A ‘distributed’ art economy envisions a more egalitarian and dynamic market where each artist, gallery, and NFT platform holds equal agency.

These examples similarly highlight how museums might engage with this field in a way that is reflective of museum ethics. Indeed, museums could leverage the market to extract and distribute value, acting as mediators, where value flows in and beyond the institution (Dewdney et al., 2012; Liddell, 2022; Morse, 2014). In doing so, a museum works in a distributed manner where its engagement with the market is to support its local communities and its underlying mission. This produces a more dynamic fundraising model, one that is not centred on supporting the institution, but instead supports the values that an institution is founded on.

WHAT ARE NFTs TO MUSEUMS?

‘We don’t need new ethical standards, but we do need a clearer articulation of their application to business practices. And we need a stronger commitment to principle over expediency’. (Gardner, 2011: 294).

NFTs exist in a volatile and speculative market that could have implications in economising the museum. Therefore, the challenges faced in NFT fundraising relate to the socio-political underpinnings of the market where certain actors interact with the technology to cultivate a capitalistic and centralising ecosystem. The examples presented here represent an alternative paradigm that envisions a more equitable, transparent, and distributed market that leverages NFTs as a tool to support digital creativity, rather than digital profiteering. But these ideas are by no means new, indeed, these examples do not represent a new ethical standard, but a ‘clearer articulation’ of how current museum ethical standards might be applied to NFT practice. And as conversations around NFTs in museums continue, ideas such as ‘transactions with intention’, ‘distribution’, and ‘equity’ can provide a clearer understanding of what NFTs are, and what they could do for museums.

In his chapter ‘Ethical, Entrepreneurial, or Inappropriate? Business Practices in Museums’, James Gardner (2011) highlights how ethical discussions in museums focus primarily on collections and exhibitions however it is the ‘business side’ of these institutions that are increasingly creating tensions around ethics and integrity. This includes aspects of management such as governance, marketing, earned income, and fundraising, areas that Gardner notes are most pressured during financial difficulties, and which prompt alternative strategies that range from the ‘entrepreneurial’ to the ‘unethical’.

Whilst Gardner’s reflections focus on the early Millennium, his analysis remains critically important in the current climate of the cultural sector. Indeed, museums continue to face financial pressures fuelled by COVID-19 restrictive measures. A recent UNESCO (2021) report found that cultural institutions saw a revenue loss of an average of 40 to 60 percent during COVID-19, with the American Alliance for Museums finding that many US museums are still reporting pandemic-related financial losses (AAM, 2022). As Marek Prokůpek, Ellen Loots and Diana Betzler (2022) note, this financial precarity has been a catalyst for alternative and novel financial strategies, including the adoption of blockchain technology and non-fungible tokens (NFTs) as a fundraising tool.

In brief, NFTs are a type of digital token traded online using cryptocurrencies. They are recorded onto a blockchain, a distributed ledger technology, and managed through smart contracts, self-executing code deployed into a blockchain ledger (De Filippi, Wray, & Sileno 2021). Since 2017, these tokens have created an emerging decentralised art economy where artists can tokenise their artwork and sell it through NFT platforms without the need of traditional art intermediaries (Bailey, 2017; Reas, 2019; Sacks et al., 2015). In 2021 the technology gained traction in the arts sector, largely facilitated by the sale of Beeple’s Everydays: The First 5,000 Days at Christies, which led to an influx of artists and investment into the field. This also included early experiments from museums such as the Ufffzi, The British Museum, and the Whitworth, as well as ‘pranks’ such as the Global Art Museum, which took works from open access collections including the Rijksmuseum and the Cleveland Museum of Art and attempted to sell them as NFTs on Opensea (Liddell, 2021).

However, these early experiments created tensions across the arts sector. Whilst some viewed NFTs as a potential entrepreneurial approach to fundraising (Lu, 2021), others argued that NFTs were simply ‘scams’ fuelling a speculative and volatile market (Ledesma et al., 2021), similarly those in the OpenGLAM movement questioned whether NFTs were undermining the principles of the digital commons (Bröcker Wieder & McCarthy, 2021). So, what are NFTs to museums? Are they an entrepreneurial, inappropriate, or ethical practice?

ENTREPRENEURIAL?

As noted in Trendswatch (2021), cultural institutions are often slow to adopt new technologies, often using the luxury of time to wait and see how digital trends develop. But NFT fundraising indicates that some institutions are willing to experiment. They are showing a ‘museopreneurial’ mindset, an idea drawn from Brendan Ciecko (2019) who describes a ‘museopreneur’, as ‘one who embraces or assumes characteristics of an entrepreneur to advance their museum’s business model and general operation’.

Indeed, NFTs are a form of ‘disruptive innovation’, a tool said to be part of the ‘fourth industrial revolution’ that could challenge ways of working across different sectors (Swan, 2015; Tapscott & Tapscott, 2018). In this respect, NFT ‘museopreneurship’ represents potential disruption in the cultural sector, a technology that could challenge working models by opening a different market of audiences to museums, diversifying revenue streams, and creating a more sustaining business model.

The NFT market represents a new type of audience defined as the ‘crypto art community’, one that is largely dominated by millennials with a desire to collect digital art, who in some cases may have only recently gained an interest in the art field through the adoption of the technology (Gold et al., 2022; Petterson & Cocksey, 2021). Similarly, NFTs are a new revenue stream that could help to diversify the income of an institution and build financial resilience (Carroll & Stater, 2009). This is supported by resale rights, which are built into the underlying smart contract of an NFT and create additional income when the token is sold on the secondary market. Doing so can generate income beyond the initial campaign, potentially creating a more sustainable revenue model for museums.

INAPPROPRIATE?

Entrepreneurialism brings its own set of risks. For example, as Jen Harvie (2013) notes in her discussion on the ‘artrepreneur’, entrepreneurism risks producing an economy that is driven by individualism and productivity, creating a market that is more competitive, and that potentially undermines artistic and cultural value.

These risks are also apparent in areas of the NFT art market where the vision of a decentralised art economy has failed to be fully materialised due to the frenzy of speculation and capitalistic intent of certain players in the market. Instead, this has simply produced new intermediaries in the form of NFT platforms who control the smart contracts and audiences that individual artists have come to heavily rely upon. This reliance has become increasingly apparent with the growing contentions over resale rights. In the last year the social agreement between artist and platform has been eroded as NFT platforms such as LooksRare and Opensea make royalty fees optional to buyers in a bid to retain their volume of sales. In doing so, these platforms are prioritising the market over the artists, competition over collaboration, and financial over artistic value, all of which are hidden under the illusion of a decentralised art economy.

Similarly, these market dynamics bring unique challenges to NFT ‘museopreneurialism’. Firstly, museums that engage with these platforms also face losing the sustaining element to NFT fundraising since they too will lose their ability to gain income from secondary sales. Secondly, this market-driven dynamic may simply hasten the process of ‘economising’ in museums, an idea that describes a process where ‘behaviours, organizations, institutions and, more generally, objects are constituted as being “economic” (MacLeod, 2020). Therefore, NFT fundraising reduces an institution’s collections into a collection of economic goods, thus creating an economising effect that could compromise cultural value and push museums into being more self-serving, market-orientated, and lacking the ‘sensitivity [of] why they are non-profits’ (Gardner, 2011).

ETHICAL?

In its simplest form, a museum ethics reflects the ‘values on which museums found their operations’ (Papaioannou, 2013). As defined by various scholars, these values include social responsibility, transparency, accountability, integrity, guardianship and reciprocation (American Alliance of Museums, 2017; Besterman, 2006; Marstine, 2012; Marstine et al., 2015; Museum Association, 2022). However, the current market dynamic chases profit over creativity, creating an unequal market that raises questions over the appropriateness and ethical nature of museum practice.

But this market dynamic is not representative of the entire NFT field and there are many artists, platforms, and start-ups who are reflective of these ethical principles. For example, NFT platforms such as Teia, Art Blocks, and Objkt.com challenged the decision made by others to make resale rights optional by outwardly showing their support for artists on Twitter and enforcing resale rights on their platforms (Teia, 2022, Art Blocks, 2022, Objkt.com, 2022). In doing so, these platforms are committing to a more socially responsible market, one that supports artists over sales volume and promotes fair equity and accountability.

These ideas are also exemplified in Transfer Gallery’s and Left.Gallery’s online exhibition Pieces of Me (2021) which was formed as a response to the hyper-commercialisation of art through NFTs. Pieces of Me explored the idea of ‘transacting with intention’, where the process of exchange is used to cultivate a more equitable system of finance (Pieces of Me, 2021a). This is imagined through the development of a ‘solidarity’ model where each work presented in the exhibition is produced by a different artist, but the proceeds of each sale is distributed on a 70/30 split where the artist(s) of the work receive 70 percent of the proceeds, and the other 30 percent is distributed to other stakeholders of the exhibition such as artists, technologists, and curators (Pieces of Me, 2021b). In doing so, this exhibition used the technology to create an equity-based model of remuneration that recognises the labour of every collaborator and distributes value based on different forms of investment. It demonstrated an alternative financial model using NFTs that is built on the desire for transparency, accountability, and fair equity.

Similar ideas are highlighted in the Whitworth’s Ancient of Days NFT project, which launched as part of the Economics the Blockbuster research project in July 2021. The project was an experiment into NFT fundraising that aimed to gain valuable insight into this emerging art ecosystem for the traditional art and culture sector and present this practice through an accessible and critical lens. The NFT consists of a new digital visualisation of William Blake’s original work developed by the imaging team at the John Rylands Research Institute using multispectral imaging (MSI) equipment. It was offered as an edition of 50 with an additional two tokens permanently retained by the gallery (Whitworth, 2021). These were available on the NFT platform Hic-et-Nunc on the Tezos blockchain,[1] which, at the time, was a more energy efficient blockchain than comparable chains (Tezos, 2022; Ethereum Foundation 2022). Each of these editions were sold for 999 Tez,[2] with the sale proceeds contributing to a community fund that supports socially beneficial projects in partnership with the Whitworth’s local communities. Like Pieces of Me, the Whitworth’s project engages in the idea of ‘transacting with intention’ by using the NFT market to support their local community and create a more reciprocal, sustainable, and distributed practice.

Together, these examples outline a new vision of the market that is characterised by fair equity, transparency, and social responsibility - ideas which highlight the emergence of a more ‘distributed’ art economy. Here, ‘distributed’ draws from Paul Baran’s (1964) work on distributed communication networks which describes a network where agency is shared equally among nodes in the network. In contrast, a ‘decentralised’ network describes a sharing of control but includes pockets of power, creating a network that is ‘de-centred’ but in an uneven manner. A ‘distributed’ art economy envisions a more egalitarian and dynamic market where each artist, gallery, and NFT platform holds equal agency.

These examples similarly highlight how museums might engage with this field in a way that is reflective of museum ethics. Indeed, museums could leverage the market to extract and distribute value, acting as mediators, where value flows in and beyond the institution (Dewdney et al., 2012; Liddell, 2022; Morse, 2014). In doing so, a museum works in a distributed manner where its engagement with the market is to support its local communities and its underlying mission. This produces a more dynamic fundraising model, one that is not centred on supporting the institution, but instead supports the values that an institution is founded on.

WHAT ARE NFTs TO MUSEUMS?

‘We don’t need new ethical standards, but we do need a clearer articulation of their application to business practices. And we need a stronger commitment to principle over expediency’. (Gardner, 2011: 294).

NFTs exist in a volatile and speculative market that could have implications in economising the museum. Therefore, the challenges faced in NFT fundraising relate to the socio-political underpinnings of the market where certain actors interact with the technology to cultivate a capitalistic and centralising ecosystem. The examples presented here represent an alternative paradigm that envisions a more equitable, transparent, and distributed market that leverages NFTs as a tool to support digital creativity, rather than digital profiteering. But these ideas are by no means new, indeed, these examples do not represent a new ethical standard, but a ‘clearer articulation’ of how current museum ethical standards might be applied to NFT practice. And as conversations around NFTs in museums continue, ideas such as ‘transactions with intention’, ‘distribution’, and ‘equity’ can provide a clearer understanding of what NFTs are, and what they could do for museums.

In his chapter ‘Ethical, Entrepreneurial, or Inappropriate? Business Practices in Museums’, James Gardner (2011) highlights how ethical discussions in museums focus primarily on collections and exhibitions however it is the ‘business side’ of these institutions that are increasingly creating tensions around ethics and integrity. This includes aspects of management such as governance, marketing, earned income, and fundraising, areas that Gardner notes are most pressured during financial difficulties, and which prompt alternative strategies that range from the ‘entrepreneurial’ to the ‘unethical’.

Whilst Gardner’s reflections focus on the early Millennium, his analysis remains critically important in the current climate of the cultural sector. Indeed, museums continue to face financial pressures fuelled by COVID-19 restrictive measures. A recent UNESCO (2021) report found that cultural institutions saw a revenue loss of an average of 40 to 60 percent during COVID-19, with the American Alliance for Museums finding that many US museums are still reporting pandemic-related financial losses (AAM, 2022). As Marek Prokůpek, Ellen Loots and Diana Betzler (2022) note, this financial precarity has been a catalyst for alternative and novel financial strategies, including the adoption of blockchain technology and non-fungible tokens (NFTs) as a fundraising tool.

In brief, NFTs are a type of digital token traded online using cryptocurrencies. They are recorded onto a blockchain, a distributed ledger technology, and managed through smart contracts, self-executing code deployed into a blockchain ledger (De Filippi, Wray, & Sileno 2021). Since 2017, these tokens have created an emerging decentralised art economy where artists can tokenise their artwork and sell it through NFT platforms without the need of traditional art intermediaries (Bailey, 2017; Reas, 2019; Sacks et al., 2015). In 2021 the technology gained traction in the arts sector, largely facilitated by the sale of Beeple’s Everydays: The First 5,000 Days at Christies, which led to an influx of artists and investment into the field. This also included early experiments from museums such as the Ufffzi, The British Museum, and the Whitworth, as well as ‘pranks’ such as the Global Art Museum, which took works from open access collections including the Rijksmuseum and the Cleveland Museum of Art and attempted to sell them as NFTs on Opensea (Liddell, 2021).

However, these early experiments created tensions across the arts sector. Whilst some viewed NFTs as a potential entrepreneurial approach to fundraising (Lu, 2021), others argued that NFTs were simply ‘scams’ fuelling a speculative and volatile market (Ledesma et al., 2021), similarly those in the OpenGLAM movement questioned whether NFTs were undermining the principles of the digital commons (Bröcker Wieder & McCarthy, 2021). So, what are NFTs to museums? Are they an entrepreneurial, inappropriate, or ethical practice?

ENTREPRENEURIAL?

As noted in Trendswatch (2021), cultural institutions are often slow to adopt new technologies, often using the luxury of time to wait and see how digital trends develop. But NFT fundraising indicates that some institutions are willing to experiment. They are showing a ‘museopreneurial’ mindset, an idea drawn from Brendan Ciecko (2019) who describes a ‘museopreneur’, as ‘one who embraces or assumes characteristics of an entrepreneur to advance their museum’s business model and general operation’.

Indeed, NFTs are a form of ‘disruptive innovation’, a tool said to be part of the ‘fourth industrial revolution’ that could challenge ways of working across different sectors (Swan, 2015; Tapscott & Tapscott, 2018). In this respect, NFT ‘museopreneurship’ represents potential disruption in the cultural sector, a technology that could challenge working models by opening a different market of audiences to museums, diversifying revenue streams, and creating a more sustaining business model.

The NFT market represents a new type of audience defined as the ‘crypto art community’, one that is largely dominated by millennials with a desire to collect digital art, who in some cases may have only recently gained an interest in the art field through the adoption of the technology (Gold et al., 2022; Petterson & Cocksey, 2021). Similarly, NFTs are a new revenue stream that could help to diversify the income of an institution and build financial resilience (Carroll & Stater, 2009). This is supported by resale rights, which are built into the underlying smart contract of an NFT and create additional income when the token is sold on the secondary market. Doing so can generate income beyond the initial campaign, potentially creating a more sustainable revenue model for museums.

INAPPROPRIATE?

Entrepreneurialism brings its own set of risks. For example, as Jen Harvie (2013) notes in her discussion on the ‘artrepreneur’, entrepreneurism risks producing an economy that is driven by individualism and productivity, creating a market that is more competitive, and that potentially undermines artistic and cultural value.

These risks are also apparent in areas of the NFT art market where the vision of a decentralised art economy has failed to be fully materialised due to the frenzy of speculation and capitalistic intent of certain players in the market. Instead, this has simply produced new intermediaries in the form of NFT platforms who control the smart contracts and audiences that individual artists have come to heavily rely upon. This reliance has become increasingly apparent with the growing contentions over resale rights. In the last year the social agreement between artist and platform has been eroded as NFT platforms such as LooksRare and Opensea make royalty fees optional to buyers in a bid to retain their volume of sales. In doing so, these platforms are prioritising the market over the artists, competition over collaboration, and financial over artistic value, all of which are hidden under the illusion of a decentralised art economy.

Similarly, these market dynamics bring unique challenges to NFT ‘museopreneurialism’. Firstly, museums that engage with these platforms also face losing the sustaining element to NFT fundraising since they too will lose their ability to gain income from secondary sales. Secondly, this market-driven dynamic may simply hasten the process of ‘economising’ in museums, an idea that describes a process where ‘behaviours, organizations, institutions and, more generally, objects are constituted as being “economic” (MacLeod, 2020). Therefore, NFT fundraising reduces an institution’s collections into a collection of economic goods, thus creating an economising effect that could compromise cultural value and push museums into being more self-serving, market-orientated, and lacking the ‘sensitivity [of] why they are non-profits’ (Gardner, 2011).

ETHICAL?

In its simplest form, a museum ethics reflects the ‘values on which museums found their operations’ (Papaioannou, 2013). As defined by various scholars, these values include social responsibility, transparency, accountability, integrity, guardianship and reciprocation (American Alliance of Museums, 2017; Besterman, 2006; Marstine, 2012; Marstine et al., 2015; Museum Association, 2022). However, the current market dynamic chases profit over creativity, creating an unequal market that raises questions over the appropriateness and ethical nature of museum practice.

But this market dynamic is not representative of the entire NFT field and there are many artists, platforms, and start-ups who are reflective of these ethical principles. For example, NFT platforms such as Teia, Art Blocks, and Objkt.com challenged the decision made by others to make resale rights optional by outwardly showing their support for artists on Twitter and enforcing resale rights on their platforms (Teia, 2022, Art Blocks, 2022, Objkt.com, 2022). In doing so, these platforms are committing to a more socially responsible market, one that supports artists over sales volume and promotes fair equity and accountability.

These ideas are also exemplified in Transfer Gallery’s and Left.Gallery’s online exhibition Pieces of Me (2021) which was formed as a response to the hyper-commercialisation of art through NFTs. Pieces of Me explored the idea of ‘transacting with intention’, where the process of exchange is used to cultivate a more equitable system of finance (Pieces of Me, 2021a). This is imagined through the development of a ‘solidarity’ model where each work presented in the exhibition is produced by a different artist, but the proceeds of each sale is distributed on a 70/30 split where the artist(s) of the work receive 70 percent of the proceeds, and the other 30 percent is distributed to other stakeholders of the exhibition such as artists, technologists, and curators (Pieces of Me, 2021b). In doing so, this exhibition used the technology to create an equity-based model of remuneration that recognises the labour of every collaborator and distributes value based on different forms of investment. It demonstrated an alternative financial model using NFTs that is built on the desire for transparency, accountability, and fair equity.

Similar ideas are highlighted in the Whitworth’s Ancient of Days NFT project, which launched as part of the Economics the Blockbuster research project in July 2021. The project was an experiment into NFT fundraising that aimed to gain valuable insight into this emerging art ecosystem for the traditional art and culture sector and present this practice through an accessible and critical lens. The NFT consists of a new digital visualisation of William Blake’s original work developed by the imaging team at the John Rylands Research Institute using multispectral imaging (MSI) equipment. It was offered as an edition of 50 with an additional two tokens permanently retained by the gallery (Whitworth, 2021). These were available on the NFT platform Hic-et-Nunc on the Tezos blockchain,[1] which, at the time, was a more energy efficient blockchain than comparable chains (Tezos, 2022; Ethereum Foundation 2022). Each of these editions were sold for 999 Tez,[2] with the sale proceeds contributing to a community fund that supports socially beneficial projects in partnership with the Whitworth’s local communities. Like Pieces of Me, the Whitworth’s project engages in the idea of ‘transacting with intention’ by using the NFT market to support their local community and create a more reciprocal, sustainable, and distributed practice.

Together, these examples outline a new vision of the market that is characterised by fair equity, transparency, and social responsibility - ideas which highlight the emergence of a more ‘distributed’ art economy. Here, ‘distributed’ draws from Paul Baran’s (1964) work on distributed communication networks which describes a network where agency is shared equally among nodes in the network. In contrast, a ‘decentralised’ network describes a sharing of control but includes pockets of power, creating a network that is ‘de-centred’ but in an uneven manner. A ‘distributed’ art economy envisions a more egalitarian and dynamic market where each artist, gallery, and NFT platform holds equal agency.

These examples similarly highlight how museums might engage with this field in a way that is reflective of museum ethics. Indeed, museums could leverage the market to extract and distribute value, acting as mediators, where value flows in and beyond the institution (Dewdney et al., 2012; Liddell, 2022; Morse, 2014). In doing so, a museum works in a distributed manner where its engagement with the market is to support its local communities and its underlying mission. This produces a more dynamic fundraising model, one that is not centred on supporting the institution, but instead supports the values that an institution is founded on.

WHAT ARE NFTs TO MUSEUMS?

‘We don’t need new ethical standards, but we do need a clearer articulation of their application to business practices. And we need a stronger commitment to principle over expediency’. (Gardner, 2011: 294).

NFTs exist in a volatile and speculative market that could have implications in economising the museum. Therefore, the challenges faced in NFT fundraising relate to the socio-political underpinnings of the market where certain actors interact with the technology to cultivate a capitalistic and centralising ecosystem. The examples presented here represent an alternative paradigm that envisions a more equitable, transparent, and distributed market that leverages NFTs as a tool to support digital creativity, rather than digital profiteering. But these ideas are by no means new, indeed, these examples do not represent a new ethical standard, but a ‘clearer articulation’ of how current museum ethical standards might be applied to NFT practice. And as conversations around NFTs in museums continue, ideas such as ‘transactions with intention’, ‘distribution’, and ‘equity’ can provide a clearer understanding of what NFTs are, and what they could do for museums.

In his chapter ‘Ethical, Entrepreneurial, or Inappropriate? Business Practices in Museums’, James Gardner (2011) highlights how ethical discussions in museums focus primarily on collections and exhibitions however it is the ‘business side’ of these institutions that are increasingly creating tensions around ethics and integrity. This includes aspects of management such as governance, marketing, earned income, and fundraising, areas that Gardner notes are most pressured during financial difficulties, and which prompt alternative strategies that range from the ‘entrepreneurial’ to the ‘unethical’.

Whilst Gardner’s reflections focus on the early Millennium, his analysis remains critically important in the current climate of the cultural sector. Indeed, museums continue to face financial pressures fuelled by COVID-19 restrictive measures. A recent UNESCO (2021) report found that cultural institutions saw a revenue loss of an average of 40 to 60 percent during COVID-19, with the American Alliance for Museums finding that many US museums are still reporting pandemic-related financial losses (AAM, 2022). As Marek Prokůpek, Ellen Loots and Diana Betzler (2022) note, this financial precarity has been a catalyst for alternative and novel financial strategies, including the adoption of blockchain technology and non-fungible tokens (NFTs) as a fundraising tool.

In brief, NFTs are a type of digital token traded online using cryptocurrencies. They are recorded onto a blockchain, a distributed ledger technology, and managed through smart contracts, self-executing code deployed into a blockchain ledger (De Filippi, Wray, & Sileno 2021). Since 2017, these tokens have created an emerging decentralised art economy where artists can tokenise their artwork and sell it through NFT platforms without the need of traditional art intermediaries (Bailey, 2017; Reas, 2019; Sacks et al., 2015). In 2021 the technology gained traction in the arts sector, largely facilitated by the sale of Beeple’s Everydays: The First 5,000 Days at Christies, which led to an influx of artists and investment into the field. This also included early experiments from museums such as the Ufffzi, The British Museum, and the Whitworth, as well as ‘pranks’ such as the Global Art Museum, which took works from open access collections including the Rijksmuseum and the Cleveland Museum of Art and attempted to sell them as NFTs on Opensea (Liddell, 2021).

However, these early experiments created tensions across the arts sector. Whilst some viewed NFTs as a potential entrepreneurial approach to fundraising (Lu, 2021), others argued that NFTs were simply ‘scams’ fuelling a speculative and volatile market (Ledesma et al., 2021), similarly those in the OpenGLAM movement questioned whether NFTs were undermining the principles of the digital commons (Bröcker Wieder & McCarthy, 2021). So, what are NFTs to museums? Are they an entrepreneurial, inappropriate, or ethical practice?

ENTREPRENEURIAL?

As noted in Trendswatch (2021), cultural institutions are often slow to adopt new technologies, often using the luxury of time to wait and see how digital trends develop. But NFT fundraising indicates that some institutions are willing to experiment. They are showing a ‘museopreneurial’ mindset, an idea drawn from Brendan Ciecko (2019) who describes a ‘museopreneur’, as ‘one who embraces or assumes characteristics of an entrepreneur to advance their museum’s business model and general operation’.

Indeed, NFTs are a form of ‘disruptive innovation’, a tool said to be part of the ‘fourth industrial revolution’ that could challenge ways of working across different sectors (Swan, 2015; Tapscott & Tapscott, 2018). In this respect, NFT ‘museopreneurship’ represents potential disruption in the cultural sector, a technology that could challenge working models by opening a different market of audiences to museums, diversifying revenue streams, and creating a more sustaining business model.

The NFT market represents a new type of audience defined as the ‘crypto art community’, one that is largely dominated by millennials with a desire to collect digital art, who in some cases may have only recently gained an interest in the art field through the adoption of the technology (Gold et al., 2022; Petterson & Cocksey, 2021). Similarly, NFTs are a new revenue stream that could help to diversify the income of an institution and build financial resilience (Carroll & Stater, 2009). This is supported by resale rights, which are built into the underlying smart contract of an NFT and create additional income when the token is sold on the secondary market. Doing so can generate income beyond the initial campaign, potentially creating a more sustainable revenue model for museums.

INAPPROPRIATE?

Entrepreneurialism brings its own set of risks. For example, as Jen Harvie (2013) notes in her discussion on the ‘artrepreneur’, entrepreneurism risks producing an economy that is driven by individualism and productivity, creating a market that is more competitive, and that potentially undermines artistic and cultural value.

These risks are also apparent in areas of the NFT art market where the vision of a decentralised art economy has failed to be fully materialised due to the frenzy of speculation and capitalistic intent of certain players in the market. Instead, this has simply produced new intermediaries in the form of NFT platforms who control the smart contracts and audiences that individual artists have come to heavily rely upon. This reliance has become increasingly apparent with the growing contentions over resale rights. In the last year the social agreement between artist and platform has been eroded as NFT platforms such as LooksRare and Opensea make royalty fees optional to buyers in a bid to retain their volume of sales. In doing so, these platforms are prioritising the market over the artists, competition over collaboration, and financial over artistic value, all of which are hidden under the illusion of a decentralised art economy.

Similarly, these market dynamics bring unique challenges to NFT ‘museopreneurialism’. Firstly, museums that engage with these platforms also face losing the sustaining element to NFT fundraising since they too will lose their ability to gain income from secondary sales. Secondly, this market-driven dynamic may simply hasten the process of ‘economising’ in museums, an idea that describes a process where ‘behaviours, organizations, institutions and, more generally, objects are constituted as being “economic” (MacLeod, 2020). Therefore, NFT fundraising reduces an institution’s collections into a collection of economic goods, thus creating an economising effect that could compromise cultural value and push museums into being more self-serving, market-orientated, and lacking the ‘sensitivity [of] why they are non-profits’ (Gardner, 2011).

ETHICAL?

In its simplest form, a museum ethics reflects the ‘values on which museums found their operations’ (Papaioannou, 2013). As defined by various scholars, these values include social responsibility, transparency, accountability, integrity, guardianship and reciprocation (American Alliance of Museums, 2017; Besterman, 2006; Marstine, 2012; Marstine et al., 2015; Museum Association, 2022). However, the current market dynamic chases profit over creativity, creating an unequal market that raises questions over the appropriateness and ethical nature of museum practice.

But this market dynamic is not representative of the entire NFT field and there are many artists, platforms, and start-ups who are reflective of these ethical principles. For example, NFT platforms such as Teia, Art Blocks, and Objkt.com challenged the decision made by others to make resale rights optional by outwardly showing their support for artists on Twitter and enforcing resale rights on their platforms (Teia, 2022, Art Blocks, 2022, Objkt.com, 2022). In doing so, these platforms are committing to a more socially responsible market, one that supports artists over sales volume and promotes fair equity and accountability.

These ideas are also exemplified in Transfer Gallery’s and Left.Gallery’s online exhibition Pieces of Me (2021) which was formed as a response to the hyper-commercialisation of art through NFTs. Pieces of Me explored the idea of ‘transacting with intention’, where the process of exchange is used to cultivate a more equitable system of finance (Pieces of Me, 2021a). This is imagined through the development of a ‘solidarity’ model where each work presented in the exhibition is produced by a different artist, but the proceeds of each sale is distributed on a 70/30 split where the artist(s) of the work receive 70 percent of the proceeds, and the other 30 percent is distributed to other stakeholders of the exhibition such as artists, technologists, and curators (Pieces of Me, 2021b). In doing so, this exhibition used the technology to create an equity-based model of remuneration that recognises the labour of every collaborator and distributes value based on different forms of investment. It demonstrated an alternative financial model using NFTs that is built on the desire for transparency, accountability, and fair equity.

Similar ideas are highlighted in the Whitworth’s Ancient of Days NFT project, which launched as part of the Economics the Blockbuster research project in July 2021. The project was an experiment into NFT fundraising that aimed to gain valuable insight into this emerging art ecosystem for the traditional art and culture sector and present this practice through an accessible and critical lens. The NFT consists of a new digital visualisation of William Blake’s original work developed by the imaging team at the John Rylands Research Institute using multispectral imaging (MSI) equipment. It was offered as an edition of 50 with an additional two tokens permanently retained by the gallery (Whitworth, 2021). These were available on the NFT platform Hic-et-Nunc on the Tezos blockchain,[1] which, at the time, was a more energy efficient blockchain than comparable chains (Tezos, 2022; Ethereum Foundation 2022). Each of these editions were sold for 999 Tez,[2] with the sale proceeds contributing to a community fund that supports socially beneficial projects in partnership with the Whitworth’s local communities. Like Pieces of Me, the Whitworth’s project engages in the idea of ‘transacting with intention’ by using the NFT market to support their local community and create a more reciprocal, sustainable, and distributed practice.

Together, these examples outline a new vision of the market that is characterised by fair equity, transparency, and social responsibility - ideas which highlight the emergence of a more ‘distributed’ art economy. Here, ‘distributed’ draws from Paul Baran’s (1964) work on distributed communication networks which describes a network where agency is shared equally among nodes in the network. In contrast, a ‘decentralised’ network describes a sharing of control but includes pockets of power, creating a network that is ‘de-centred’ but in an uneven manner. A ‘distributed’ art economy envisions a more egalitarian and dynamic market where each artist, gallery, and NFT platform holds equal agency.

These examples similarly highlight how museums might engage with this field in a way that is reflective of museum ethics. Indeed, museums could leverage the market to extract and distribute value, acting as mediators, where value flows in and beyond the institution (Dewdney et al., 2012; Liddell, 2022; Morse, 2014). In doing so, a museum works in a distributed manner where its engagement with the market is to support its local communities and its underlying mission. This produces a more dynamic fundraising model, one that is not centred on supporting the institution, but instead supports the values that an institution is founded on.

WHAT ARE NFTs TO MUSEUMS?

‘We don’t need new ethical standards, but we do need a clearer articulation of their application to business practices. And we need a stronger commitment to principle over expediency’. (Gardner, 2011: 294).

NFTs exist in a volatile and speculative market that could have implications in economising the museum. Therefore, the challenges faced in NFT fundraising relate to the socio-political underpinnings of the market where certain actors interact with the technology to cultivate a capitalistic and centralising ecosystem. The examples presented here represent an alternative paradigm that envisions a more equitable, transparent, and distributed market that leverages NFTs as a tool to support digital creativity, rather than digital profiteering. But these ideas are by no means new, indeed, these examples do not represent a new ethical standard, but a ‘clearer articulation’ of how current museum ethical standards might be applied to NFT practice. And as conversations around NFTs in museums continue, ideas such as ‘transactions with intention’, ‘distribution’, and ‘equity’ can provide a clearer understanding of what NFTs are, and what they could do for museums.

NOTES

[1] Hic-Et-Nunc discontinued in November 2021 and transitioned to become Teia Community. During this time the Ancient of Days NFT was transferred to Objkt.com - https://objkt.com/asset/hicetnunc/168856

[2] This equates to £631.37 (27th June 2023)

REFERENCES

AAM. (2021, February 1). TrendsWatch: Navigating a Disrupted Future. American Alliance of Museums. https://www.aam-us.org/programs/center-for-the-future-of-museums/trendswatch-navigating-a-disrupted-future/

AAM. (2022, February 8). Museum Field Experiencing Compounding Financial Losses, New Survey Reveals. American Alliance of Museums. https://www.aam-us.org/2022/02/08/museum-field-experiencing-compounding-financial-losses-new-survey-reveals/

Art Blocks (2022) https://twitter.com/artblocks_io/status/1600963494119354368

American Alliance of Museums. (2017, December 12). AAM Code of Ethics for Museums. American Alliance of Museums. https://www.aam-us.org/programs/ethics-standards-and-professional-practices/code-of-ethics-for-museums/

Bailey, J. (2017, December 27). The Blockchain Art Market is Here. Artnome. https://www.artnome.com/news/2017/12/22/the-blockchain-art-market-is-here

Baran, P. (1964). On Distributed Communications Networks. IEEE Transactions on Communications Systems, 12(1), 1–9. https://doi.org/10.1109/TCOM.1964.1088883

Besterman, T. (2006). Museum Ethics. In A Companion to Museum Studies (pp. 431–441). John Wiley & Sons, Ltd. https://doi.org/10.1002/9780470996836.ch26

Bröcker Wieder, B., & McCarthy, D. (2021, October 25). Should museums be dabbling in NFTs? Apollo Magazine. https://www.apollo-magazine.com/should-museums-be-dabbling-in-nfts/

Carroll, D., & Stater, K. (2009). Revenue Diversification in Nonprofit Organizations: Does It Lead to Financial Stability? Journal of Public Administration Research and Theory, 19. https://doi.org/10.1093/jopart/mun025

Ciecko, B. (2019). Museopreneur: How Museums are Leaping into New Business Models with Entrepreneurial Spirit. Cuseum. https://cuseum.com/blog/2019/5/3/museopreneur-how-museums-are-leaping-into-new-business-models-with-entrepreneurial-spirit

Dewdney, A., Dibosa, D., & Walsh, V. (2012). Post Critical Museology: Theory and Practice in the Art Museum. Taylor & Francis Group.

NOTES

[1] Hic-Et-Nunc discontinued in November 2021 and transitioned to become Teia Community. During this time the Ancient of Days NFT was transferred to Objkt.com - https://objkt.com/asset/hicetnunc/168856

[2] This equates to £631.37 (27th June 2023)

REFERENCES

AAM. (2021, February 1). TrendsWatch: Navigating a Disrupted Future. American Alliance of Museums. https://www.aam-us.org/programs/center-for-the-future-of-museums/trendswatch-navigating-a-disrupted-future/

AAM. (2022, February 8). Museum Field Experiencing Compounding Financial Losses, New Survey Reveals. American Alliance of Museums. https://www.aam-us.org/2022/02/08/museum-field-experiencing-compounding-financial-losses-new-survey-reveals/

Art Blocks (2022) https://twitter.com/artblocks_io/status/1600963494119354368

American Alliance of Museums. (2017, December 12). AAM Code of Ethics for Museums. American Alliance of Museums. https://www.aam-us.org/programs/ethics-standards-and-professional-practices/code-of-ethics-for-museums/

Bailey, J. (2017, December 27). The Blockchain Art Market is Here. Artnome. https://www.artnome.com/news/2017/12/22/the-blockchain-art-market-is-here

Baran, P. (1964). On Distributed Communications Networks. IEEE Transactions on Communications Systems, 12(1), 1–9. https://doi.org/10.1109/TCOM.1964.1088883

Besterman, T. (2006). Museum Ethics. In A Companion to Museum Studies (pp. 431–441). John Wiley & Sons, Ltd. https://doi.org/10.1002/9780470996836.ch26

Bröcker Wieder, B., & McCarthy, D. (2021, October 25). Should museums be dabbling in NFTs? Apollo Magazine. https://www.apollo-magazine.com/should-museums-be-dabbling-in-nfts/

Carroll, D., & Stater, K. (2009). Revenue Diversification in Nonprofit Organizations: Does It Lead to Financial Stability? Journal of Public Administration Research and Theory, 19. https://doi.org/10.1093/jopart/mun025

Ciecko, B. (2019). Museopreneur: How Museums are Leaping into New Business Models with Entrepreneurial Spirit. Cuseum. https://cuseum.com/blog/2019/5/3/museopreneur-how-museums-are-leaping-into-new-business-models-with-entrepreneurial-spirit

Dewdney, A., Dibosa, D., & Walsh, V. (2012). Post Critical Museology: Theory and Practice in the Art Museum. Taylor & Francis Group.

NOTES

[1] Hic-Et-Nunc discontinued in November 2021 and transitioned to become Teia Community. During this time the Ancient of Days NFT was transferred to Objkt.com - https://objkt.com/asset/hicetnunc/168856