Authors: [Courtesy] Meaghan Gallagher and Marcos G Fuentes.
Context to Blockchain and the British Museum
The digital revolution, led by technologies such as Blockchain, Artificial Intelligence and Machine Learning, may create a better world for our society. This short article explores how the blockchain may bring benefits to an existing historic organisation in the United Kingdom: The British Museum. We have identified four key potential projects, using blockchain technology, that can bring benefits to the Museum, its visitors, and the art collection industry.
The blockchain is a digital ledger that is shared with the public, immutable, consensus-based, and direct. Each block (which aggregates into a chain) represents a single transaction and contains information related to sharing/ownership properties, payment, and contractual obligations. In the art industry, blockchain technology can revolutionize how art is distributed, paid for, collected, and viewed. The British Museum, a 267-year old institution, is the UK’s most popular tourist attraction and showcases ancient and modern artefacts from all around the world (Association of Leading Visitor Attractions 2020). The British Museum may achieve a strategic advantage by harnessing the blockchain technology. The adoption of blockchain at the British Museum may provide benefits to all its stakeholders, including the visitors and the host organization. This article has examined the current strengths and weaknesses of the British Museum and presents four potential blockchain-based projects that, if implemented, would each address an area of weakness for the British Museum.
Potential Projects Using Blockchain Technology at the British Museum
Project 1:Industry-Wide Loan and Provenance Tracking
As a first key problem, we have found that the British Museum inefficiently collaborates with industry partners including other museums, families, universities, individual collectors, community associations, and governments. There is no industry-wide marketplace for tracking a piece’s transactional history. To overcome this problem, the blockchain can aid the British Museum in its art exchanges process with a single, public, real-time database shared across museums and other collecting institutions to track the locations of valuable art. For example, Vastari (an art exchange facilitator based in London) has begun this project, boasting a database on its website (2020) for museum professionals and producers to share and browse more than 700,000 objects amongst 33,000 contacts. In a similar vein, the British Museum may enhance its industry collection database using the blockchain technology. Key aspects of this weakness and the solution is described in the following table.
Project 2: Digital Art Footprint
As a second key weakness, we found that while the British Museum allows online patrons to view some of its collection online, it has not embraced digital art. There is a difference; viewing art online displays a JPEG image of a piece meant to be viewed in person. Digital art, however, is presented exclusively through a screen; it cannot be touched like a statue or painting in a physical setting. In trading digital art on the blockchain, an owner gets access to a digital file and its unique code that cannot be replicated. This creates scarcity, as it would be impossible to create a duplicate and increases the value of a work. Some may be skeptical about the value of digital art, until they read the New York Times’ article (2018) about CryptoKitty which sold for $140,000. Ikohaus is a black-owned digital art gallery on the blockchain that has organized itself to sell digital art securely and accept crypto payments (Ikohaus 2020). The WUNDER Museum, the ZKM Center for Art and Media, and the Schinkel Pavilion have also launched exhibitions dedicated to crypto-art with reported success (Styx 2020). Thus, the British Museum may develop similar projects to enhance their value proposition. Key aspects of this weakness and the potential solution is described in the following table.
Project 3: Expanded Payment Methods
As a third key weakness, we found that in neither of its exchanges with industry partners nor its admissions for visitors does the British Museum use cryptocurrencies. For artists, cryptocurrencies could result in royalty payments any time a work trades hands. For institutions, acquisitions or loans could be paid for with cryptocurrencies, especially for digital art. For visitors, blockchain can increase the security of a digital ticket, decrease costs, and enhance the museum experience with additional features powered by data analytics. Cultural Places, an art and tourism app developed by Oroundo, wants to let users purchase tickets to museums, theatres, galleries, and exhibitions using a cryptocurrency called the Cultural Coin (Keane 2018). While Cultural Places will take a cut of ticket sales, its service is meant to reduce ticketing fees and fraudulent ticket resales. Thus, there are clear benefits for the British Museum to use and accept cryptocurrencies for transactions. Key aspects of this weakness and the solution is described in the following table.
Project 4: Accessible Market for Ownership
As a final key weakness of the current the British Museum’s service, we found that despite making art viewership accessible for millions, the Musuem can expand art ownership and contribute to the shared economy via the blockchain. The blockchain enables fractionalization, the divided the ownership of a work apportioned by fractional tokens. Fractionalization via the blockchain will make art more scalable, democratic, affordable, and inclusive. For example, in 2018, art collector Eleesa Dadiani auctioned 49% ownership of Andy Warhol’s 14 Small Electric Chairs on the blockchain platform Maecenas (Livni 2018). Rather than being sold for a lump sum of $5.6 million (or 850 Bitcoin at the time), Warhol’s work is now co-owned and accessible by 100 buyers. This shows that by enabling fractional ownership of works, the Museum may get a strategic advantage in the market by expanding its customer and partner base. Key aspects of this weakness and the solution is described in the following table.
The digital revolution is transforming many organizations, and it is imperative that the organizations adopt new practices to secure both a strategic advantage and survival in the long-term. In this article, we have explored how the British Museum may implement a blockchain program to enhance its value proposition and mitigate current weaknesses. This may bring benefits to the Museum by being an early adopter of blockchain technology in the art industry.
Based on our analysis, the following key recommendations are made to the British Museum (fair to note that some of these weaknesses, found for the British Museum, are applicable to the broader art industry):
· Launch an industry collection database to compensate for a lack of synchronization in information collecting with industry partners which creates redundancies and inhibits collaboration for loans, provenance tracking, and restitution projects;
· Open its first digital art exhibition to enter an emerging market;
· Use cryptocurrencies for acquisition, selling, and loans to broaden the accepted methods of payment for both visitors and industry partners; and
· Enable fractional ownership or works to make art ownership more inclusive.
Some solutions proposed will require increased in-house efforts as well as collaboration. The risks may include the lack of consensus to create industry standards for a volatile technology, overestimated interest in digital art exhibitions creating investment losses, reluctant adaptation of blockchain technology by industry partners and visitors, and weakened control and status due to fractionalization of artefacts. Despite these risks, the British Museum and other renowned art institutions may take advantage of this nascent technology and become early beneficiaries. We acknowledge that implementing these changes are by no means easy, yet here lies the challenge to the British Museum to adopt new technologies. If adopted, blockchain might revolutionize the way we view, buy, and sell art at the British Museum!
Meaghan Gallagher is a full-time student at the George Washington University studying economics, public policy, information systems, and sustainability. She was an affiliate student at the UCL School of Management during the academic year 2020. Connect with Meaghan here.
Dr. Marcos G Fuentes teaches Strategic Project Management & Megaproject Management at the UCL School of Management. His current research is focused on the dynamics of Latin-American megaprojects of infrastructure. Learn more about his research here. Connect with Marcos here.
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