 to discover conversations about the power of the arts to connect us to each other and a place. I'm Coven Smith, Senior Director of Arts at the Knight Foundation. Today's conversation, it will look at NFTs, the blockchain and their implications for a more equitable future for artists. Joining me today is the great Amy Whitaker. Amy is an artist and economist who studies sustainable economic systems to support artists. Her pioneering work with fractional equity in art combines archival research with public auction returns to build new systems of artist support using blockchain. She holds two patents and is the author of three books, including the award-winning Museum Legs, which we just discovered has actually been on my bookshelf behind me for the last year of Zoom calls. She holds Museum Legs and Art Thinking and the forthcoming Economics of Visual Art published by Cambridge. Since the 2000s, she's taught business to artists and has served as an experimental teacher across liberal arts, economics, and design. Her PhD in political economy was a finalist in Fast Company, the world-changing ideas competition. We want you to have active participation in the conversation, so if you have questions, please submit them throughout the show via Twitter using the hashtag Night Live or in the comment section of the live stream and we will try to get to as many of them as we can throughout the conversation. So Amy, welcome to Discovery. Thank you, Covan is great to be here. Really nice to be in conversation with you. I am only slightly intimidated, so this will be fine. For everyone listening, Covan is humbly not stating his own background as among the kind of pioneers of the museum technology movement, which of course is central to you. So you've got a cello and museum legs, what could possibly be? Well, fair enough. Well, let's get right to it, because I think I probably live in the same space as many of those who are tuning in, which is to say, I have a certain familiarity and awareness when we say NFT is the blockchain, but have only the dimmest understanding of what they are. So I think maybe it might be helpful for us to start with a few kind of definitions. So just to make sure that we can level the playing field here a bit. Could you, when we refer to the blockchain versus then NFTs, what are we really talking about there? Yeah, thanks for that. And just as an intro to defining those terms, I think this is an important political project of how we can learn together in public across fields and the importance as part of the democratic experiment of trying to understand things, trying to invite people into fields. I would say the same thing about art and people who feel disconnected from some parts of kind of art discourse. So please add questions. If you ask us something we don't know, we'll tell you and I'll look it up later, but just to start off, blockchain is easiest to conceptualize as a database structure. So it's a structure of interconnected multiple copies of the same ledger. And what that does that's really important is it allows you to trust a piece of information without trusting a central administrator to keep the file. So it's a way of trusting your bank statement without trusting Chase Manhattan or Citibank or a way of trusting your grades at a university without there being a registrar. So it's a kind of decentralized, immutable interconnected record. And there are certain things cryptographically that make that possible that I'd be happy to discuss a little more. Well, and we'll get to some of the implications of that in a bit, I'm sure. But so now, obviously, the reason we're having this conversation is NFTs and I should state that Amy and I have a bit of a side bet going to see if we can get through this conversation without mentioning a certain artist and a certain recent sale. So we'll see if we make it. But obviously, here, what we have is that I mean, the blockchain has been in existence for quite some time, but it's the sort of explosion of awareness around NFTs that's driving a lot of the current conversation. And so I wonder if you could just talk a little bit about non-fungible tokens and what they are, what they mean and what their relationship to the blockchain is. Definitely. So let me place them in a little bit of a timeline of the blockchain. So I think the blockchain is an art project in and of itself. And we could track the sort of avant-garde story of the blockchain. For a lot of people, it starts in the fall of 2008 when a person or a group of people going by the name Satoshi Nakamoto circulated a white paper for Bitcoin cryptocurrency. The blockchain starts a long time before that. And for me, one of the like pegs in that prequel is a 1991 paper written by Stuart Haber and Scott Stornetta called How to Time Stamp a Digital Document. They were researchers together in the late 1980s when personal computing was really coming online. And they asked this very profound and poetic question, how will we know what was true about the past and how will we know about trusting a central administrator? So through a kind of long, beautiful story involving a moment of insight at a Friendly's in New Jersey, they developed this system. They were well ahead of their time. They tried to commercialize it. They started a blockchain by publishing an alphanumeric code in the Lost and Found section of the Sunday New York Times so that people could verify that they had not changed any of the records. But they are cited in the Satoshi paper. And what Satoshi did was take this idea of how to timestamp digital documents and keep a ledger in multiple copies so that you didn't have to trust in a central administrator. Kind of think of the Thomas Crown affair where you could steal a work of art by sneaking in and not being seen or you could hide on plain sight by having tons and tons, sorry, spoiler alert, of people in bowler hats. So this is the latter where there's so many copies you couldn't change one without having to change all of them. So the thing that Satoshi did was create a system of incentive for keeping these many distributed copies of the blockchain ledger. And that incentive was to solve a complicated mathematical puzzle, cryptographic puzzle and win Bitcoin for doing it. So for a long time, Bitcoin was what a friend of mine calls nerd money. Somebody once convinced a person to order two Papa John's pizzas for $30 early on like circa 2010 and paid them 10,000 Bitcoin which is literally worth almost half a billion dollars right now. But so there's this sort of early story where there's this incentive, incentivizing system to maintain copies of the ledger. So 2014 Vitalik Buterin makes a new protocol of blockchain. So instead of the Bitcoin blockchain, he develops the Ethereum protocol of blockchain. So it's just a different programming system. I think of, this is maybe a kind of rough analogy but I think of the differences being a little like driving a standard shift or an automatic car. Ethereum is more of an automatic car. Everything's conceptualized in these token structures. So when I answer your question of what an NFT is, an NFT is technically and very literally a token structure on the Ethereum blockchain. It is an ERC721 non-fungible token. This is in contrast to an ERC20 which is a fungible token. So fungible is just like $1 interchangeable with another dollar and non-fungible speaks to a shared obsession in the arts with the idea of originality and authenticity. And so this developed around 2017 companies like CryptoKitty were involved in kind of setting this kind of standard of coding for the ERC721. So you could have these digital images that were made original. So they've created digital scarcity by putting this token container around them. Technically there's a longer history of making NFTs. If you define it more broadly, I have a colleague Kevin McCoy who was making original digital scarce blockchain registered images in 2014 when he launched the company Monograph. And there are people who make blockchain NFTs now. But basically you can think of it from the art perspective as being like a conceptual art soloist certificate of authenticity wrapped around a work of art that's more ephemeral. In that case, conceptual and in this case, digital. Okay. And so in that context, when we hear people talk about minting NFTs or mining, what exactly does that mean and how does that apply to this? Yeah, that's great. So minting is just the term that's given to the moment of registration. So Coven has an image that he wants to turn into an NFT. So he goes onto a platform and he mints it, which is the moment that it is registered on the Ethereum blockchain in this token structure. So that's minting. The way we talk about minting money would be analogous. Like it's the creation of the coin or the dollar bill. In this case, a non-fungible one. Mining is the term used for people who are trying to win cryptocurrency by verifying the record. So you can do this for the Bitcoin blockchain by solving puzzles. So Bitcoin, it's managed by proof of work, meaning the brute computing work of trying to solve this puzzle called the nonce to win a Bitcoin. Or you can do this for Ethereum. And Ethereum currently still uses a proof of work system, which is much more costly environmentally. So there's a long standing conversation about switching to proof of stake, which is a different system of verification. But the idea is that people are mining. They're the people who are kind of auditing and kind of cleaning the system to make sure that the many copies of the record are kept in sync. Okay, right. Well, so I think that gives us sort of a foundation to talk about what we really want to talk about. Which is, you know, what the implications for artists might be here. You know, beyond sort of maybe the obvious ones, which we all bet that we're not gonna talk about to a certain degree. But so, you know, as you and I have talked, and you've said to me, you know, that you feel that NFTs are potentially a means for artists to retain more equity in their work or have more control over the work and the way that it's used. And I wonder if you could talk about that a little bit, sort of what models you're seeing out there. Yeah, definitely. I mean, so if we just kind of name the context, part of the context is this bigger question of how markets and art interact and how the economic sustainability of artists and market speculation interact. So you see this in the art market in general and you see it in NFTs, where there are these glittery marquee sales where the newspaper says some X being sold for Y bajillion dollars. But underneath that surface, there's a lot of structural work that's happening by artists. So my original kind of entry point to blockchain, it kind of starts to answer your question, Kovan. So if we take the first part, so blockchain is a database structure and it has this kind of nice democratic trustworthiness of storing information in our collectively accessible filing cabinet. And tokens are interesting because they deal with this problem of digital art of originality or scarcity. So if we're in that context, we can go back in our history and look at resale royalties, this tool that's used to help even out the economics of artists. So a famous case of this is in the late 1950s, the American artist, Robert Rauschenberg, sold a work of art through the Leo Castelli Gallery for 900 dollars, called Thaw, sold it to Robert and Ethel Skull, who then sold it at auction in 1973. So not so long after in 1859 for $85,000. Rauschenberg didn't get any of the increase in the price of the work, but his career helped to support the benefit that the Skulls got. And for example, he represented the U.S. at the Venice Biennale in 1964 and won the top prize. And so there's a conversation in the U.S. about how we could have resale royalties, meaning a percentage of the resale price would go back to the artist. This system has existed in France since the 1920s and exists in about 70 jurisdictions worldwide. And it has also been explored pretty deeply by private contract, often by artists themselves in the context of activism. So 1969, the Art Workers Coalition in New York started to engage in these sort of artist-centric forms of protest. And out of that, Seth Siegelub and Robert Pajansky wrote what we call the artist contract, which would allow artists to receive 15% of the proceeds when they're work resales. So one of the things that blockchain is really interesting for is registration of those sorts of shares. And I started looking at it in terms of equity. So what would happen if artists didn't just get a royalty, but actually retained a percentage ownership of the work of art. And if you look in archives and you get records of Rauschenberg and John's original sales, and we partly worked on their work because of data availability. It's hard to find these prices. What you find is that if they had retained 10% equity when their work was first sold, they would have vastly outperformed US equities markets making a 20 to 40% return every year from 1960 to 2005. So what's interesting to me, just kind of circling back to your NFT question is that a marquee sale at auction is, I love the prices, right? I would watch the prices, right? All day, but it's in that vein. It's not connected to anything. It's a price for a collectible. It is not related to the labor of the artist or to the kind of creative work of engagement and participation. But what you are seeing at the same time are two really interesting structural moves. One, you're seeing artists retain equity. You're seeing a lot of NFT platforms include a resale royalty in their architecture. Now, sometimes it's done very deeply in the architecture. There are new programming standards being proposed so that resale royalties would be portable across NFT platforms. And so it's still early days, but you're seeing artists where when their work sells, they get resales, they get 10% of the proceeds. And then connected to that, you're also seeing artists collaborate and pull risks so that they can benefit. Like if one succeeds, they all succeed a little bit. And I'm happy to kind of share some stories about that. Yeah, I'd love some specific examples, particularly of the risk pooling scenario that you just described. Yeah, it's one of the things I've really been so excited to see develop. So one example is Kalani Nicole who runs Transfer Gallery recently hosted an exhibition of NFTs. And what she did is if a work sold for, let's say $100, 70% of that would go to the artist and 30% of that would be split across all the artists. In another example, there's a project called Feral File started by the artist Casey Reese in partnership with a company Bitmark that Casey and I have both worked with for a long time. And Casey hosted an exhibition, the opening exhibition on Feral File was called Social Codes. So it's 10 artists. They are making generative art, not gifts, but I always say that wrong, GIFs is gifts. Anyway. GIFs forever. Hard to do. Interpretive dad joke, Melissa. That is the correct answer. So Casey Reese is a co-developer of the computer programming language processing. And they had a lot of artists who were working in that but what they did was they implemented the idea of a resell royalty, structured as a surcharge. So anytime a work resells, the artist gets 10%. But also of the 10 works, each artist got a full set of all of them. So if one artist succeeded a lot more, any other artists would have an option to sell it if they wanted to. So it's sort of like a way of operating as an investment trust or thinking about portfolio diversification for artists. Not to talk about artists in neoliberal terms or to reduce art to financial investment, artists really are investors in their own work and they're very concentrated investors. And this is a way of kind of spreading out that risk and making it more of a shared project or a wee story. That's so fascinating. And so, I mean, it sounds like also, I mean, one thing that's interesting about this is the sort of autonomous nature of it in the sense that you, an artist is not reliant upon another agency for basically fulfillment of these terms or enforcement of them. Is that, I mean, am I understanding that correctly? Yeah, and I think a lot of this kind of comes down to these really beautiful experiments in collaborative governance, where artists are kind of getting together and saying, how do we want to organize? And it's not like watching employees have to get a really large powerful tech company to allow them to unionize, they're just doing it. And I think it's really exciting to watch. And I think there's a lot of experimentation in the actual works of art too, which is fun, really fun to see. I wonder actually if you could talk about that a little bit, because this is sort of a question in the back of my mind is, certainly when you read on this topic, there's a lot of thrown around sort of NFT art. And I'll be honest, I don't quite understand exactly what that means. And so I wonder if you could talk about some of the more sort of creative expressions of technology. And I think you raise a really good point. I mean, it's really important, but you know, NFT art, why are we categorizing it that way? You could slice it, we talk about landscape art or drawing or work on paper. And this is just so new. Maybe we just have a big amorphous category that contains a lot of moving parts of which are really connected to other things. So I'll name two projects. And one of them you'll have to tolerate my French, describing it. I mean that figuratively. The first project is Cole Wilson, an artist is working with a gallery, Prey Shadows in Brooklyn, Massachusetts to create a project around Otsi. The, I think it's a bronzer copper age mummy, the sort of like oldest known record of a human being. And Otsi had tattoos. And a few years ago, Cole did a project where she recreated Otsi's tattoos on her own body using blood she had drawn from her body, mixed with pigment. The museum of Otsi allowed her to use all of her digital image files. So she's turning those into NFTs. So I think there's something really beautiful about it because conceptually the blockchain experiment is obsessed with the starting point to have timestamp record need, what's called a Genesis block. And I think there's something really human. She's written a set of kind of rules and relations for the work. And then that project, they're collaborating with a startup called Fair Chain to register it. So I think that's kind of one to watch. I think it's a really kind of elegant, quietly interesting project. And then I follow Adi Wagonecht, the digital artist on Twitter. And she's been doing a project on a new platform called, it's called Hick a Nunk. And it's using the tasers blockchain to experiment in kind of lower energy, proof of stake systems. But she has this project, I think it's actually really beautiful. You should check it out physically. But it's based on a 2015 series she did called Sext where she's using, and I quote her, details of unsolicited dick pics, sex pics sent to her DMs as brushes. So you're watching this kind of generative art, but it's not like, oh, look a cat with a pop tart and a rainbow. It's sort of like a conceptually grounded abstraction. And I think it's quite interesting conceptually on a number of levels, especially the way in which it's part of an experiment for lower energy consumption, or collaborative kind of collegial systems within blockchain. Well, so that actually leads into a question we had from the audience, which is, let me make sure I'm reading this correctly. What, if any, precautions can creators and artists take when utilizing NFTs to help curb, says here about their economic impact, but I think we're probably also talking about the environmental impact there. Yeah, so I think as an artist, if you're wanting to list NFTs, there are a couple of things you can do. I actually find the Twitter conversation really high level in terms of understanding collectively how people are approaching this. Addie Wagonette, Kalani Nicole, Jason Bailey, who runs art, no, these are all people who are really good at surfacing these questions and these experiments. I would say that you wanna read the terms and conditions and that it may be interesting to you to go to a couple of art market panels. There's one I'm on with the responsible art market in a couple of weeks, where one of my colleagues, Louise Karan, who's the director of the Center for Art Law, will talk about how to read the terms and conditions. But unfortunately, I think some of it does come down to the sort of legal language of how you decide which platform to mint your works on and to list your works on. So either kind of talk to peers and artists somewhere like Twitter or listen to kind of market lawyers, talk about it. And then I think the same would be said environmentally. There's also a, there was a panel at RISD last night with Anne Spalter and Shepherd Ferry and some others where they were talking about these questions. So I think there's actually an incredibly kind of accessible amount of information of people just trying to figure it out. I think it's kind of exciting. It's how people used to describe the, or still describe what the art world was like in New York in the 50s and 60s, where they were like genuine conversations with people trying to figure stuff out. So I would just say like, except that if you have that problem, everyone has that problem and just try to figure it out together with other people in conversation. Well, so, let's see, we have another question here. Also, although I'm hesitant to move off of that topic. Actually, I won't move on that topic. Let's save this last question as a good one to end with from the audience. So I'm gonna hold on that one for a moment. So, I think one thing that's interesting about what you've described here is what I think you've said to me before kind of amounts to a certain like deep platforming of transactions and governance and other sort of structures that we typically would have relied on platforms or institutions to accommodate. And certainly the environmental issue seems to be a key part of that too in the sense that these structures arise independent of kind of regulatory regimes that might be brought to bear on that. So I wonder if you could talk a little bit more about what you mean by that deep platforming and sort of what the implications are there as far as sort of self-governance and also what that may imply for institutions like museums that have obviously a history of keeping track of provenance and other information with the blockchain seems to be somewhat ideal for doing. Yeah, right. I'll ask about eight questions there. Thank you. Which one you want and go for it. Fantastic question, Kelvin. Next question. In its theoretical form, blockchain is a wildly transformative democratic technology. It inverts a lot of power structures from central control to distributed governance. That is true in the case of institutions like museums that have civic imports. So they have deep connection to public ownership that they've traditionally been very centrally run and hierarchically run with regard to these definitions of taste. You also have large corporate platforms like Facebook and Google where right now, our society is organized around them for reasons that are pretty clear economically. Google is an intensive fixed cost business. It's very inexpensive to add one more person. It's a bit of a natural monopoly in that way. And it would be hard for the marketplace to support multiple search engine companies. What I think that can happen in deep platforming via blockchain is that we can shift from having these companies like Facebook where they are the company and we are effectively the product and we sign over intellectual property. We can shift to owning our own intellectual property and our data and our creativity, our creative work from Instagram to art, fine art. And I don't mean that as a mutually exclusive categorization, just all of it. We can own it ourselves in collective investment trust. So blockchain so radically lowers the transaction costs of interacting with each other and relating to each other that we can operate collectively and cooperatively in ways that we couldn't do before. So it's not this zero sum, that's mine, this is yours, that's your share price. Who won on penalties in the World Cup? It's like, how can we create value together that we all own a piece of? And so I think if we allow it to run, it can open up some pretty profound questions. Whether that'll happen with regard to already powerful massive companies getting into the blockchain space or already concentrated art actors dominating some of the sales that we're not mentioning or regulation will be anybody's guess. Yeah. Well, so last very quick question from the audience from Facebook, which is wonder if you might mention just some people that are doing really interesting and working the space that others might pursue further particularly sort of entrepreneurs or I mean, obviously we've mentioned some artists previously but lightning round because unfortunately we're almost out of time. I just wanna say in response to the last question just really brief addendum, in addition to looking at companies like Facebook I think it's a chance to think about art and science at the same time. So to think not just about IP and music or fine art but also watching the vaccine IP conversation happen or like, oh, we wanna take the vaccine off patent but actually they're all these sub patents. So just sort of what the fluidity of invention and ownership is. So I would actually be watching all of it. I would especially be watching the conversation about taking the vaccine off patent with regard to what's happening in India and in other parts of the world. Within the arts, I think a great starting point is to follow Jason Bailey on Twitter, Artnum. I think he surfaces a lot of really interesting stories. I've been really inspired by the artist Sarah Loody and also Casey Reese who are both represented by the forums gallery. Sarah Loody is using these structures to distribute part of the proceeds of her art not just to her gallery but to the individual people who work there. I would think about the work of Anne Spalter and Addy Wagonect and Kalani Nicole and I have particularly been enjoying following Larva Labs. So this is Matt Hall and John Watkinson. They created the CryptoPunks which were really early NFT project that is literally being sold in an evening sale at one of the big auction houses. I think it's at Christie's in May but they also have a project called Autoglyphs which are generative artworks that are built as inspired by a solo it. So they're instructions that generate an image every time. I find their work really interesting and then I also think super rare of the platforms. I admire how much super rare has shared data with academic researchers, myself included and how they have reseal royalties that are baked into their coming. Well, Amy, thank you so much. Unfortunately, we have to stop there. I feel like we've got several more days of this conversation that we could probably keep doing. So I wanna thank the audience for your questions today. Sorry, I tried to get to the ones that I saw but so I really once again, special thanks to you, Amy. Thank you so much for coming here and being so generous with your time. And special thanks to the production crew here. The beats at the top of our show was created by a former night colleague, Chris Barr and the music that will play us out today is composed and performed by the Akron Jazz pianist, Aaron Brown. So please tune in next week on Night Live for another fantastic conversation on race and distribution of democratic rights in our society on the future of democracy. The Night Foundation show about trends, ideas and disruptions changing the face of our democracy. Follow the Night Foundation on social media and check back on the Night Live website for more information. Thank you, everyone. Thanks again to Amy.