May 3, 2023
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While the blockchain revolution continues to slowly but surely impact different aspects of our lives, there is nothing slow about NFTs. They seem to have come from nowhere and completely taken over, disrupting everything we thought we knew about creating and collecting art, and forcing everyone in the industry to reimagine the future in a new way.
For centuries, museums have held countless treasures, iconic cultural symbols, stories of our past, and clues to our ancestors who came before us. Yet, less than 5% of our most valued cultural treasures are on display in museums, and even those on display are out of reach for most people around the world. Although the internet has been a powerful catalyst in helping museums increase their reach, and accessibility, and share their knowledge, it has not significantly impacted how museums operate.
Museums rely heavily on support from the government, donors, and volunteers to exist and deliver value to their communities. They have limited revenue sources and are very vulnerable to changes impacting funding sources. The pandemic has made things even worse for museums, with global tourism only having recovered to 60% of its pre-pandemic levels after almost three years.
In this context, many in the art world capitalized on the rise of a promising new technology innovation called NFTs. At first, mainly used for niche experimental projects like Crypto Punks generative avatars, and the popular blockchain game Crypto Kitties, digital collectibles powered by NFTs became mainstream when the NBA launched their NBA Top Shot project by the Vancouver-based Dapper Labs.
The nature of digital collectibles enables collectors to freely trade among each other, buy, sell, and auction their collections. Many jumped at the opportunity, motivated by the desire to make money and the hunger to belong to a community. Thanks to a few high-profile digital art sales, celebrity endorsements, massive media coverage, and the mystery surrounding the technology. This has led many in the art world to pay attention and want to get in on the action, from starting artists to prominent and respected names.
Fast forward a couple of years, and the hype of NFTs may have died off, but we are just beginning to discover the possible benefits of NFTs and what is possible. This is especially true for museums, where the emergence of NFTs presents a new paradigm to reach new audiences and increase revenue streams.
Unlike artists and galleries, museums have the knowledge, connections, and brand recognition and can harness the potential of NFTs in many ways, including digital collectibles, virtual exhibitions, and dynamic displays of digital art. Furthermore, NFTs can be used to create curated collections, interactive experiences, and even educational resources.
Here are some of the key ways NFTs can be used by museums to create an entirely new future:
One of the most significant benefits of digital collectibles is their ability to facilitate digital art sales. Museums have always struggled to monetize their collections. However, with NFTs, museums can create digital twins that can be sold on dedicated marketplaces.
NFTs provide a way to establish the authenticity and provenance of digital artworks. Each NFT is unique, containing a cryptographic signature that can be used to verify ownership and authenticity. This makes it easier for collectors to track the history of an artwork and ensure that they are purchasing an original piece.
This is also important for museums to record and document the history and origin of their collections to make them available to the public.
NFTs can be used to enable fractional ownership of artworks. This means that multiple collectors can own a piece of artwork. with each share represented by an NFT. This makes it easier for collectors to come together as a community and buy high-value artworks, which are usually only available for well-funded art collectors, museums, and artists to fund their work using their communities.
Museums and artists can create and sell digital artworks that are accessible to a wider audience. Previously, physical artworks were limited by their location, making them difficult for many people to view or purchase. However, with digital artworks, anyone with an internet connection can access, collect, and enjoy them.
Unlike physical art, digital collectibles can be programmed to include royalty payments, ensuring the creators of the digital collectibles receive a percentage of any future sales of their work. This means that the museums or artists who created the digital collectibles can continue to benefit financially from their creations long after the initial sale.
Digital collectibles can be bought and sold using cryptocurrency, making it easier for collectors to purchase digital art without having to convert their money to traditional currencies, and without dealing with the limitation of payment providers around the world.
Digital collectibles can be used to create digital merchandising opportunities to increase the funding that can be generated from the museum's online store, allowing collectors to own a memorable item of their favorite artist or collection, and has the potential of creating new revenue streams for museums.
As blockchain technology evolves and relies on more sustainable energy resources, digital collectibles can be seen as a more environmentally sustainable alternative to traditional art and gift item sales, which often involve shipping physical artworks and items around the world. By selling digital collectibles, museums can reduce their carbon footprint and minimize their impact on the environment.
NFT technology allows for the transparent distribution of funds. So museums can include support for charitable causes with a percentage of the sale of a digital artwork going to a specific charity or cause. Collectors can be confident the charity or cause is getting the stated portion of the funds.
Digital versions of ancient artifacts and artworks can be created and sold as digital collectibles. The funding can be used to preserve and showcase cultural heritage, enabling people to own a piece of history while also preserving the original artifact. This is especially true for artworks and artifacts that are highly sensitive and need constant restoration and care.
NFTs can potentially revolutionize how we create, collect, and experience art and culture. Their unique features and capabilities offer a wealth of opportunities for artists, collectors, and museums. Whether it's facilitating digital art sales, paying perpetual royalties, allowing collectors to own a fraction of a high-value artwork, maintaining environmental sustainability, or building a more engaged and collaborative community, digital collectibles using NFT technology have opened up a world of possibilities for art and culture.
As technology evolves and matures, we can expect to see even more exciting and creative applications of digital collectibles, NFTs, and blockchain technology in art and beyond.
