NFTs are bringing in money for museums

The unit’s director, Joe Kennedy, said that waking up with a Leonardo is a pretty special experience. A digital replica of Leonardo da Vinci’s “Portrait of a Musician” is glowing on his gallery wall on an elaborately framed LED screen. The Original was in Milan’s Ambrosiana Museum, located 800 miles away.

One of six reproductions of famous paintings from across history was on display in the Unit’s atmospheric “Eternalizing Art History” exhibition, which closed on Saturday. Cash-strapped museums are selling NFTs in an attempt to generate money. With sales estimated as high as tens of billions, NFTs took over the art and collectibles market last year, usually pegged to the very high-flying but very volatile Ethereum cryptocurrency.

The financial pressure on public museums has increased because of pandemic-related lockdowns and federal budget priorities. However, despite the impressive sales figures NFTs have achieved, few institutions have taken advantage of this digital asset for fund-raising.

Through licensing, agreements with several notable Italian cultural institutions, Unit and its technology partner Cinello developed limited-edition LED reproductions framed in period-style frames with unique NFTs.

In addition to Leonardo’s portrait, Caravaggio’s “Bowl of Fruit” and Raphael’s “Madonna of the Goldfinch” were available in a set of nine with prices between 100,000 euros and €500,000 per piece (roughly $110,000 to $550,000). The licensing museums received 50% of the sales proceeds. Seven sales up to €250,000 had been confirmed by Friday after the show closed, including at least one Leonardo NFT.

Similar ways opted by other Museums

A number of other institutions in Europe have already made similar attempts to get on board the NFT bandwagon. For instance, the State Hermitage Museum in St. Petersburg, Russia, held an auction last September where five of its best-known paintings sell for $444,000.

Initially digitized as a single-off drop of 10,000 NFTs, the digitized image of Gustav Klimt’s “The Kiss” has been fractionalized by the Belvedere museum in Vienna. A small number of these was available on Feb. 14, Valentine’s Day, at a price of 0.65 Ethereum, or €1,850. A spokeswoman for the Austrian museum announced this week that around 2,400 of these Klimt NFTs have been sold, netting about €4.3 million.

Especially when you are using the Ethereum blockchain to produce NFTs, this requires a lot of energy. A 500-mile journey in a gasoline-fueled car estimates to generate the same amount of greenhouse gases as computing one NFT. Nonfungible tokens are an asset to a museum, but they also pose environmental problems that can damage the museum’s image.

According to Bernardine Brocker Wieder, the chief executive of Vastari, the project’s technical partner, the Whitworth Museum in Manchester, England, has made eight sales of 50 NFTs based on a William Blake print, each priced at 999 units of the “green” cryptocurrency tezos (about $3,290 at current values).

NFTs as an alternative revenue stream are infrequently in trial by museums because of environmental concerns. As further reasons for hesitancy, museum professionals point to the insecurity and opacity of unregulated cryptocurrencies, the difficulty of finding trustworthy tech partners, as well as the financial implications of such partnerships.

Tina Rivers Ryan, a curator specializing in digital art at Buffalo’s Albright-Knox Art Gallery, said American museums are nonprofit organizations. Therefore, legally and morally speaking, they cannot move quickly.

Viewpoints of others

The NFTs are currently being discussed in many American museums, Ryan said, and many are currently considering how they may be incorporated into the mission of their organization. “The market is changing so rapidly,” she said.

The British Museum, located in London, has adopted NFTs as a fund-raising tool with little delay. The board presides over by former British Finance Minister George Osborne. In September, it announced an exclusive five-year partnership with blockchain-based NFT platform LaCollection. Token drops have since making by the museum using digital copies of Katsushika Hokusai and J.M.W. Turner, with edition sizes ranging from two to 10,000. These drop art items cost between $500 and $40,000.

The website of LaCollection notes that in recognition of the environmental impact of large-scale token drops. “for every NFT minted, we plant a tree,” which “far exceeds” the carbon footprint of the activity. Sophie Reid, the project’s spokeswoman, informed me that sales reached seven figures last month. But the British Museum refused to comment.

She is skeptical about museums becoming involved in the trend for NFTs. Susi Anderson, professor of museum studies at George Washington University, shared her concerns. As opposed to focusing on the work itself, it could be a gimmick. Anderson spoke about making resources available to the public as much as possible. Still, she acknowledged that museums currently have a market for NFTs. The opportunity for fundraising and visibility may not last long, but now is the time to take advantage of it, she said.

Currently, that market is fairly small. In addition, for those familiar with the cryptocurrency world, digitalized old art does not have the same speculative appeal as “native” NFTs, like CryptoPunks and Bored Apes, which can fetch millions. Museum NFTs, such as OpenSea, have not achieved an attention-grabbing profit yet.

Questions being raised

The question is, what happens when a reproduction of a masterpiece is so good that it looks just like the original, framed beautifully and hanging on a wall? Can they not sell for millions, or at least hundreds of thousands, of dollars?

Lawyer Eve Smith seemed impressed on the final day of the Unit “Eternalizing Art History” show. “This is my second visit to the show,” she said. At the Pinacoteca Brera museum in Milan, Smith gazed at a backlit, high-resolution replica of Francesco Hayez’s 1896 painting of lovers embracing, “The Kiss.” He was astonished by this piece.

“It looks like satin. It looks like there’s texture in what you’re looking at, but there isn’t,” Smith says. “Will I still want to go to the Brera? Of course.” Unit London’s asking price for an edition of nine-plus its NFT is €180,000. Would she be willing to pay that much for one? “It depends how much you like repro,” Smith said.

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