Bitcoin has led the world on a roller-coaster ride of excitement and panic over the past several months as its value has shot around like a ball in a pinball machine! Let’s take a step back from biting our nails to look at the potential that cryptocurrencies hold for the museum world, as well as how some museums have already embraced this new trend and all the possibilities it has to offer!
Bitcoin, created in 2009 by an anonymous inventor, was the first decentralized cryptocurrency. And while it’s still the most well-known, these days it has its fair share of imitators and competitors. Other decentralized, digital currencies (meaning there is no central regulating bank, but rather a chain of transactions called the blockchain that acts as an open record of all transactions) include Ethereum, Ripple, Litecoin, Dash, and many more!
Cryptocurrency in the museum
Before we jump into the immense impact that blockchain technology could hold for museums, let’s take a look at The Hammer Museum, who showcased cryptocurrency in a traditional way earlier this year in an exhibit by artist Simon Denny that was based around cryptocurrency and blockchain technology.
Hammer Museum, Los Angeles. Photo: Brian Forrest.
The exhibit was set in three trade show-style booths that together represented the blockchain. Each booth contained an exhibit on a different revolutionary in the cryptocurrency world and reflected Denny’s own view of the individual’s interpretation of how blockchain technology could, or should, be used throughout the world.
How can museums use cryptocurrency?
In 2014, a few museums took the plunge and began using cryptocurrency in everyday transactions! For a time, both the Museum of the Coastal Bend and the St. Petersburg Museum of History accepted Bitcoin as payment for memberships, donations, and sales in their gift shops. That will be .000675518 BTC for a single admission, please!
Cryptocurrency News, November 21, 2013
The Dadiani Fine Art in London was one of the first galleries to accept cryptocurrency as payment for art sales, and while drawbacks still exist (such as the uncertain length of time required to complete a transaction via Bitcoin and its unstable value), there are many advantages to using cryptocurrency in art transactions.
For one thing, the blockchain technology that most cryptocurrencies are based on acts as a digital ledger that contains records of every transaction that’s taken place. The blockchain is spread across a network of computers, visible to all, and unchangeable.
What does that mean for the art world?
Just think about that: every sale is easy to track and validate. Art authenticators aren’t going out of business anytime soon, but after a work is initially verified, it’s authenticity, ownership, and future sales by Bitcoin are permanently recorded!
In fact, why not cut out the money? While cryptocurrency holds great potential as a currency, it’s actually the blockchain technology that makes it so remarkable. It seems only likely that museums will begin utilizing blockchain technology for the purpose of art authentication, whether or not it’s tied to currency.
Just imagine a comprehensive, digital record for the art world where every piece is documented and no information can be forged or changed! Verisart, a startup based in L.A., is aiming to create just that!
Are museums using cryptocurrency to buy art?
Yes! The Austrian Museum of Applied Art/Contemporary Art (MAK) was the first museum to purchase a work of art with Bitcoin. In 2015, MAK purchased a limited edition screensaver, Event Listeners, created by Dutch artist Harm van den Dorpel.
The work was on display at Cointemporary.com, an online platform for the temporary exhibition and sale of art via Bitcoin.
What about other nonprofits?
While blockchain technology offers special advantages for verification in the art world, cryptocurrency also holds enormous potential for non-profit donation in general. A donation of Bitcoin incurs no bank charges, international transaction fees, or payments to middlemen organizations such as PayPal, so the process is simplified and the recipient receives the full donation!
Blockchain encryption also has great value for nonprofit donations, as its tamper-proof record ensures that donations don’t end up in the hands of anyone but the intended recipient.
Many non-profits currently accept Bitcoin donations, including The Red Cross, Greenpeace, and Save the Children. CharityWater even created their own cryptocurrency, Clean Water Coin, which donates .1% of every transaction to CharityWater!
What does the future hold?
Although Bitcoin and other cryptocurrencies have not yet become universally accepted, the growing awareness of their usefulness and unique potential will likely prompt more and more institutions, including museums, to accept cryptocurrency transactions. It’s clear that blockchain technology, however, is the real power behind cryptocurrency’s potential, and it’s likely that we’ll be seeing much more of it in the museum, nonprofit, and art world in the future!
How do you think cryptocurrency will affect museums? Let us know!