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4 reasons why museums aren’t cashing in on NFTs yet

The people in charge of museums may lack the requisite expertise to manage non-fungible tokens, and the upside is far from guaranteed.

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A woman looks at a non-fungible token digital art display in New York City in September 2021. Timothy A. Clary/AFP via Getty Images

The eye-popping sale price of US$69 million on March 11, 2021, for a non-fungible token created by the digital artist Beeple sent shock waves through the art world. More multimillion-dollar sales of these digital assets that exist on a blockchain and are maintained on networked computers soon followed.

At the same time, art museums have faced substantial financial shortfalls accelerated by a decline in visitors and donations induced by the COVID-19 pandemic. Many have considered taking drastic measures, such as selling treasured artworks, to plug budget gaps.

Can NFTs generate the revenue many museums sorely need? Some are issuing their own tokens, including the British Museum and the Academy Museum of Motion Pictures. The Miami Institute of Contemporary Art accepted an early NFT from a donor. There’s even an NFT of entire museum called the Museum of Digital Life.

Yet, more than six months into this disruption of the art world, museums have generally engaged very little with NFTs. As researchers who examine both the finances of nonprofit organizations and the growth in NFTs, crypto-assets and other associated blockchain applications, we see four primary reasons why museums have failed to turn the NFT craze into a financial windfall.

1. NFTs are complicated

The people running museums have expertise encompassing art, education and curation. NFTs are an entirely different realm that’s quite detached from art and have more in common with crypto-currency than typical artworks like paintings and sculptures.

What sets NTFs apart from crypto-currencies like bitcoin and ethereum, which are designed to be interchangeable, is that each NFT represents a unique asset. Figuring out how NFTs must be treated, held and valued is hard, and the ability to quickly mint NFTs for auction is not something that may come naturally to museum staff. What’s more, NFTs are typically bought and sold with crypto-currencies, and not many organizations – including museums – regularly make transactions using them.

On top of any missing financial know-how and a culture that seeks to minimize risks, there are legal complexities and insurance complications. So we can understand why museums have not rushed into the NFT market.

2. The monetary upside might be missing

The connection between the ownership of a piece of art and an NFT associated with that artwork can be confusing. Although it may appear otherwise, the NFT is a separate asset from the art itself. The owners of the art retain ownership even after any NFTs derived from that art are minted and sold.

This separation may mean that the owner of the art has no particular ability to turn an affiliated NFT into a big payoff. Much like the value of a painting has little to do with what the paint, canvas and frame are worth, an NFT’s financial value is subjective. It depends on what others are willing to pay.

The creators of the underlying art, such as musicians and artists who retain control over their work, can – and do – mint NFTs connected to them. Once art is held in a museum collection, however, the value of NFTs is less clear.

Much like an author-autographed copy of a book can be more valuable than a book without that signature, an NFT minted by an artist of a popular artwork can attract interest from collectors. On the other hand, a book signed by the publisher or an NFT minted by a museum is bound to be less appealing to collectors. An artist-minted NFT that a museum holds could fetch more interest.

Stated another way, even if a museum possesses valuable artwork, that does not mean minting NFTs is a guaranteed revenue stream.

3. The NFT market values artists, not institutions

One underlying reason the market for NFTs tied to artwork has thrived is because buyers view purchasing and holding an NFT as a means to interact with and financially support the artist.

More broadly, the ethos is one of decentralization, and NFT buyers are less likely to be enthusiastic about an intermediary joining the fray.

An example of the ethos built around supporting artists is the prevalence of smart contracts that secure royalties for the artist that will flow every time an NFT tied to one of their works is sold.

In fact, the monetization often touted as the primary upside for museums seeking to jump into the NFT market may not be as simple as initially appears.

First, museums need to see whether monetizing their existing collections would in any way undermine public access to collections – potentially violating their missions and bylaws. Second, they must have protocols in place to ensure that proceeds from sales tied to the collection are correctly reinvested. And there’s a risk that this process could inadvertently lead to pieces of the collection being treated as financial instruments if income is being generated from them rather than solely serving as items on display for the public.

Moving forward, it remains to be seen whether NFTs will financially benefit brick-and-mortar museums, rather than creating new opportunities for virtual ones.

4. Volatility and uncertainty make NFTs risky

Though the high prices they can fetch are eye-catching, there are countless cases of NFTs that quickly become worthless.

And, as with crypto-currencies, there’s lots of volatility. The value of several NFTs have undergone massive and dramatic losses, including ones issued by Grimes, A$AP Rocky and John Cena.

Relying on NFTs to raise cash may be risky, and the boards of museums may determine that it’s inappropriate for their charitable organization to own them. That means museums may be forced to quickly liquidate any NFT they mint or receive – even if that sale will make the NFT less valuable to the institution.

Also, there is still a great deal of uncertainty about what valuable NFTs can do for an art museum’s primary goals. They are neither physical in nature nor works of art. Even digital artwork that can be displayed is separate from any NFT derived from it.

To be sure, NFTs are still new. Banks and other traditional financial institutions initially stood on the crypto-currency sidelines but have slowly assumed a bigger role in those markets. It is certainly possibly that something similar will occur with traditional institutions in the art world as the NFT market matures.

[Understand new developments in science, health and technology, each week. Subscribe to The Conversation’s science newsletter.]

The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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1 hour ago

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March 9, 2024

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

“When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

“It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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March 9, 2024

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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Spread & Containment

Another beloved brewery files Chapter 11 bankruptcy

The beer industry has been devastated by covid, changing tastes, and maybe fallout from the Bud Light scandal.

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3 hours ago

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March 9, 2024

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Before the covid pandemic, craft beer was having a moment. Most cities had multiple breweries and taprooms with some having so many that people put together the brewery version of a pub crawl.

It was a period where beer snobbery ruled the day and it was not uncommon to hear bar patrons discuss the makeup of the beer the beer they were drinking. This boom period always seemed destined for failure, or at least a retraction as many markets seemed to have more craft breweries than they could support.

Related: Fast-food chain closes more stores after Chapter 11 bankruptcy

The pandemic, however, hastened that downfall. Many of these local and regional craft breweries counted on in-person sales to drive their business. 

And while many had local and regional distribution, selling through a third party comes with much lower margins. Direct sales drove their business and the pandemic forced many breweries to shut down their taprooms during the period where social distancing rules were in effect.

During those months the breweries still had rent and employees to pay while little money was coming in. That led to a number of popular beermakers including San Francisco's nationally-known Anchor Brewing as well as many regional favorites including Chicago’s Metropolitan Brewing, New Jersey’s Flying Fish, Denver’s Joyride Brewing, Tampa’s Zydeco Brew Werks, and Cleveland’s Terrestrial Brewing filing bankruptcy.

Some of these brands hope to survive, but others, including Anchor Brewing, fell into Chapter 7 liquidation. Now, another domino has fallen as a popular regional brewery has filed for Chapter 11 bankruptcy protection.

Overall beer sales have fallen.

Image source: Shutterstock

Covid is not the only reason for brewery bankruptcies

While covid deserves some of the blame for brewery failures, it's not the only reason why so many have filed for bankruptcy protection. Overall beer sales have fallen driven by younger people embracing non-alcoholic cocktails, and the rise in popularity of non-beer alcoholic offerings,

Beer sales have fallen to their lowest levels since 1999 and some industry analysts

"Sales declined by more than 5% in the first nine months of the year, dragged down not only by the backlash and boycotts against Anheuser-Busch-owned Bud Light but the changing habits of younger drinkers," according to data from Beer Marketer’s Insights published by the New York Post.

Bud Light parent Anheuser Busch InBev (BUD) faced massive boycotts after it partnered with transgender social media influencer Dylan Mulvaney. It was a very small partnership but it led to a right-wing backlash spurred on by Kid Rock, who posted a video on social media where he chastised the company before shooting up cases of Bud Light with an automatic weapon.

Another brewery files Chapter 11 bankruptcy

Gizmo Brew Works, which does business under the name Roth Brewing Company LLC, filed for Chapter 11 bankruptcy protection on March 8. In its filing, the company checked the box that indicates that its debts are less than $7.5 million and it chooses to proceed under Subchapter V of Chapter 11. 

"Both small business and subchapter V cases are treated differently than a traditional chapter 11 case primarily due to accelerated deadlines and the speed with which the plan is confirmed," USCourts.gov explained. 

Roth Brewing/Gizmo Brew Works shared that it has 50-99 creditors and assets $100,000 and $500,000. The filing noted that the company does expect to have funds available for unsecured creditors. 

The popular brewery operates three taprooms and sells its beer to go at those locations.

"Join us at Gizmo Brew Works Craft Brewery and Taprooms located in Raleigh, Durham, and Chapel Hill, North Carolina. Find us for entertainment, live music, food trucks, beer specials, and most importantly, great-tasting craft beer by Gizmo Brew Works," the company shared on its website.

The company estimates that it has between $1 and $10 million in liabilities (a broad range as the bankruptcy form does not provide a space to be more specific).

Gizmo Brew Works/Roth Brewing did not share a reorganization or funding plan in its bankruptcy filing. An email request for comment sent through the company's contact page was not immediately returned.

 

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