107. Crypto and Museums Part 1

In November 2021, an extremely rare first printing of the U.S. Constitution was put up for auction at Sotheby's in New York, attracting a unique bidder: ConstitutionDAO, a decentralized autonomous organization. This group had formed just weeks earlier with the sole purpose of acquiring the Constitution – and would not have been possible without crypto technology.

While museums and crypto don't commonly coexist at the moment, they may increasingly intersect in the future. They actually address similar fundamental issues: trust and historical accuracy. Both can help answer the question: what really happened? To explore this overlap, we speak with Nik Honeysett, CEO of the Balboa Park Online Collaborative in San Diego, who helps trace the story of ConstitutionDAO's bid for the Constitution. We explore key crypto concepts like blockchains and smart contracts, and how they might apply to the wider museum world – particularly around questions of provenance and institutional trust.

Image: Nicolas Cage in 2004's National Treasure. Supporters of ConstitutionDAO drew parallels between his character's fictional theft of the Declaration of Independence and the DAO's real-life attempt to purchase the Constitution.

Topics and Notes

• 00:00 Intro
• 00:15 Auction of the U.S. Constitution
• 00:43 Constitution DAO
• 01:36 The Role of Governance Tokens
• 02:02 Nik Honeysett
• 02:45 Balboa Park Online Collaborative
• 04:29 Museums and Crypto
• 05:24 Blockchain and Provenance
• 07:40 Smart Contracts and Museum Governance
• 09:56 The Outcome of the Auction
• 11:58 Museums as Trustworthy
• 14:00 Museum Archipelago Ep. 39. Hans Sloane And The Origins Of The British Museum With James Delbourgo
• 16:41 Conclusion and Future of Crypto in Museums
• 17:44 Outro | Join Club Archipelago 🏖

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Transcript

Below is a transcript of Museum Archipelago episode 106. For more information on the people and ideas in the episode, refer to the links above.

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In November 2021 an extremely rare, first printing of the U.S. Constitution was available to buy at auction. While the item was special – only 13 copies existed according to the auction house – the bidders were the usual assortment of wealthy individuals.

Auctioneer: “And now let's begin the auction. Lot 1787. The United States Constitution. We’ll start the bidding here at 10 million dollars. 11 million.12 million ”

Except for one. Among the individuals trying to buy the Constitution was not an individual at all. It was a new kind of organization – a decentralized autonomous organization better known as a DAO. This organization, ConstitutionDAO, had formed just a few weeks earlier for this exact purpose – to buy the Constitution.

I remember the memes – backers of the project posted images of Nicolas Cage in 2004’s National Treasure, drawing parallels between his character’s fictional theft of the Declaration of Independence and this real-life attempt to purchase the Constitution.

In the weeks leading up to the auction, thousands of people contributed money to ConstitutionDAO using the cryptocurrency Ether. That money funded the bid – the amount ConstitutionDAO could pay to try to acquire the constitution. What the contributors were actually buying was a so-called governance token: governance rights, the ability to vote on what to do with the Constitution, specifically, which museum to send it to, and what text would be displayed next to the document in the gallery.

Nik Honeysett: The ConstitutionDAO is an interesting example of the public claiming back ownership of a document that, you know, really should be owned by the public. And I think, you know, that's the challenge for museums.

This Nik Honeysett, CEO of the Balboa Park Online Collaborative in San Diego, California.

Nik Honeysett: Hello, my name is Nick Honeysett. I'm CEO of the Balboa Park Online Collaborative, known as BPOC. We are a nonprofit, technology and strategy company located in San Diego's Balboa Park, which is a cultural park of about 30 institutions. And we provide a range of services on a shared service model. And we also work with museums across the U. S. and outside the U.S. largely providing digital strategy, to help organizations figure out what they should be trying to figure out as we enter a more prevalent digital world.

The genesis of BPOC came in the early 2000s. Because there’s such a high density of museum institutions in San Diego’s Balboa Park, museums realized they could pool their resources and they wouldn't need to start from scratch to build each individual institution’s technology stack,

Nik Honeysett: It's a very dense cultural environment. Some of the institutions are actually physically in the same building. There has to be an opportunity for us to do this collaboratively. To create a team of IT professionals that would provide IT support. So essentially a kind of separate IT service department that would serve the institutions. That they would pay for those services. So you were gaining the economy of scale. And so we did a lot of, in the early days, a lot of digitization, kind of collaborative digitization projects. We have a couple of collaborative infrastructure applications like digital asset management. And really the benefit is there's an altruistic need. So the larger institutions are offsetting the costs for some things for the smaller institutions. And we do serve some volunteer-only institutions and they have access to the same level of IT service and support that the larger ones do.

While BPOC’s shared service model pools resources from lots of different museums, it still operates as a normal organization with a board of directors and a CEO making decisions and some sort of legal counsel and a sustained collaborative relationship with museums. The focus is technology, but the methods are more traditional.

ConstitutionDAO, by contrast, was a spontaneous, decentralized effort to acquire a historical document that probably wouldn’t have been possible without crypto technology.

I’ve been working on this episode about crypto in museums for years: I recorded this interview with Honeysett in March of 2022, two and a half years ago. Most museum people I know are reluctant to talk about crypto for various reasons: concerns about the massive energy use of some blockchains, how from the outside, it looks like speculative hype cycle, and – maybe most importantly – there’s a wide cultural gap between the centralization of museum power and the decentralized ideals of blockchain culture. “Move fast and break things” doesn’t sound too appealing if your job is to make sure the ancient vases don’t shatter.

But I will argue that museums and crypto have some interesting overlaps. Museums and crypto both address the same fundamental issue: trust, and they seek to answer the same question: what happened?

Blockchains keep an unchangeable record of what happened, stored not in a warehouse or a datacenter, but distributed without a point of control or a single point of failure. The first and most famous use for these blockchains is to power cryptocurrencies like Bitcoin, but they can do a lot of things, like, for example, provenance.

Provenance is the record of ownership and history of an item, tracking where it has been and who has owned it over time. Right now institutions like museums and auction houses handle provenance but maybe there are better ways.

Nik Honeysett: Provenance is extremely important in the museum world and I think provenance seems to be the ideal application for blockchain. Here is the irrefutable, definitive, provenance of this work. And we saw a huge issue with provenance, which is the Nazi era provenance issue, you know, when a lot of works of art disappeared from the record because they were confiscated by the Nazis during World War II. And there's been a lot of research to reestablish the true provenance of works of art and repatriate them, in certain circumstances. Collections held in the public trust need to be presented to the public. If you look at what really engages audiences, there are some emerging strategies that think about collection objects, as a sequence of experiences. The first experience is it was created. A painting was painted. The second experience is maybe shown in a show. The third is that it was sold to its first owner. And then it was transported and then it was acquired by a museum or whatever it is. So you have these sequences of experiences and the painting interacting with a whole set of things, again, all which happened in a particular sequence.

Of course, somebody still has to write these experiences onto the blockchain as they happen and museums might be well positioned to do this.

But if a future fascist regime steals an object, they would never be able to delete or destroy the record of who previously owned the object the way they can destroy a museum or its records.

We have one more crypto concept to dive into before we can get back to the story of ConstitutionDAO. When ConstitutionDAO pooled resources, the money raised to buy a U.S. Constitution, the idea was to govern the organization using a set of smart contracts, code that runs on a blockchain. And that's why it's different from asking a whole bunch of people to contribute to a bank account that one single person owns. Sure, the owner of that bank account might feel that they must listen to the community of contributors, but nothing is technically stopping them from spending the money however they feel like. Legally, they could face consequences for misusing funds, but the money could still be spent before any legal action takes place.

This is much different from a smart contract. You could set up a smart contract that ensures – technically – that the money cannot be spent unless 50% of governance tokens have voted in a certain way.

The reason to have this code on a blockchain instead of just somebody’s computer is that there’s a much greater degree of certainty that the smart contract will be executed correctly when spread across thousands of computers: someone can’t just unplug their computer and the smart contract fails to execute.

Nik Honeysett: I can see parallels in the museum world. A group of museums could come together to purchase a seminal work of art that would guarantee attendance at the blockbuster level and they would come together, they would purchase it and then they would share it. So it would be a work of art that would travel. The ConstitutionDAO, ultimately somebody has to receive that thing. So, this group comes together, they pool their resources, they secure ownership of this object. But then, someone is responsible for doing something with it. Yes, there's, it's kind of by proxy. So the group will vote on what they want to have with it. But at some point, you know, it translates to a physical series of actions.

The organizers of ConstitutionDAO said they had interested museums lined up with various proposals on how to store and display the Constitution, including the Smithsonian and the New York Public Library.

But they never got the chance. ConstitutionDAO got outbid, rather dramatically, by hedge fund manager Ken Griffin.

Nik Honeysett: And so part of me wonders. It would have been, as fascinating as it was, it would have been much more fascinating. And I don't know whether the folks behind it were experienced enough to receive something as important as that and what they would be able to do with it.

Ian Elsner: Right. I think at some point though, we will actually see that play out. I don't know if it's sometime this year, some other ConstitutionDAO will pop up for a different historical object, Someone would have to decide, okay, how do we ensure it during transport? And instead of that being a decision made by museums or other institutions familiar with historical stewardship, that might be put to a governance mechanism in the DAO. And, then all of a sudden it would be asking a huge number of people to decide together, to come to a consensus about what the best insurance policy is to take out during transport of the object, or however that works.

Nik Honeysett: But, you know, and the challenge with that is that, that group, you know, that governance group needs to be informed. There's a danger of damaging the object if you don't understand what is required in transportation of an extremely valuable work of art, you run the risk of losing it.

Ian Elsner: I'm kind of curious about, about how you feel, if you were to walk up to, to an object like a copy of the Constitution and, you saw that, okay, this is owned by a collection of people, not necessarily all Americans, but people who are united in their interest in owning a piece of this. But that's the only loose connection. How does that make you feel as a museum visitor?

Nik Honeysett: That, you know, that's a really good question because if the public hold museums in the highest regard in terms of trust. They are one of the most trustworthy entities. And if that wasn’t the case, if you're looking at an object. I guess it's, you know, as I'm thinking about it, it's no different than a donor who has lent a valuable work of art to the museum. Your interaction with that piece is in the context of the museum with which you hold high trust and high regard for. So I guess the, the fact that that governing body had determined that the museum was the best place to, albeit temporarily, house that object, would make me feel comfortable, to know that something of such foundational historical value is actually in an institution that I know has the highest practices to preserve it.

Ian Elsner: I'm glad you brought up trust because that's one of the applications of blockchain in general is that it allows for various systems to happen in a trustless environment. if the two of us enter into a smart contract, we don't have to trust each other. That the money will be distributed according to the terms of the smart contract, we just have to trust that the smart contract itself is trustworthy, And there's this sort of interesting tension between, between very trustworthy institutions and then this system which is designed for actors that don't trust each other.

Nik Honeysett: It's interesting to noodle down on that. And so, Inherently, you know, people trust museums because, A, because museums tell them that they're trustworthy but B, you know, you can experience something and, and connect with your culture and your past and there's an implicit understanding that the museum is custodians of this thing and it's in his, you know, taking care of them and they'll see an object that might be hundreds of years old in pristine condition or something like that.

My theory is that museums have had two overarching eras: the power era and trust era. As we’ve discussed in previous episodes of Museum Archipelago, the first public museum that we would recognise as a museum was The British Museum in London, which opened in 1759. The point of the museum was to showcase the power of the British Empire, to indicate that anyone in London could see treasures owned by the most powerful people in faraway places. Slowly and over centuries, perhaps much more recently than we’re comfortable with, museums have entered their trust era.

Perhaps, museums are enjoying peak trust right now – scandals like museums naming buildings and wings after donations by the Sackler family, as well as the continuing holdover horrors from the time that museums were in their pure power era like decolonization and repatriation will slowly erode this trust. And the crypto world has so many scandals and general confusion that it’s certainly not trustworthy.

Nik Honeysett: I think partly for the public to generally accept the trustworthiness of the blockchain, they need to more tangibly experience it. So right now it's just, it's a couple of words and people don't really understand it

But the difference I think is that crypto technologies are built for a trustless world. Maybe, if we do start to see declining trust in museums, there’s some crossover appeal to bringing these crypto tools like blockchain-based provenance and smart contracts to the museum world.

Nik Honeysett: Museums they hold collections in the public trust. They are duty bound to be transparent in what they do, but they are clearly not. There is a lot of behind closed doors things going on. That would be a fantastically interesting governance model where everything is completely transparent if you translate you know, mission to smart contract right?

Nik Honeysett: So your mission is actually a smart contract with your community. What is the obligation that you set up in that smart contract that then , the public can hold you accountable for? We used to do this exercise, with museums and say, demonstrate unequivocally how your mission. Is being interpreted. Put some hyperlinks on your mission statement to where you've actually done what you said you did. But if that was open and transparent, that your mission was a series of smart contract statements that would be fascinating.

Immediately after Ken Griffin won the auction, it was announced that this U.S. Constitution would be temporarily loaned to the Crystal Bridges Museum of American Art in Bentonville, Arkansas. It was put on display as part of the We the People: The Radical Notion of Democracy exhibit in July 2022. Since ConstitutionDAO would have also displayed the document in a museum, not much is different from the outside. ConstitutionDAO made the refunds available for all contributors to claim and disbanded. Sometimes an organization only needs to exist for a short time and just serve a single purpose.

Museums should prepare for a world where a group of individuals, leveraging crypto technology, can plausibly – and maybe preferably – do things that were once only possible with museum institutions.

There’s still a lot of crypto to talk about and in part two I’ll dive deeper into projects that overlap with museums. Until then, this has been Museum Archipelago.