LIBnft: a Project in Search of a Purpose
At first, I thought this was a parody.
LibNFT is an R&D initiative exploring the impact of blockchain and the digital asset economy on library archives.
However, it seems like a serious proposal that was presented today at a CNI project briefing. I did not attend the project briefing; the only details publicly available are from the whitepaper. (Note: link to the whitepaper can't be robustified—Dropbox is hostile to web archiving—but I have saved a copy of version I reviewed...version 0.04 dated 4-Dec-2022.)
From the details in the whitepaper, it is safe to say this project should be shelved until the need and purpose are better understood. Why? First, blockchain is the wrong technology; gallery-library-archive-museum (GLAM) institutions do not need a technology where participants are adversarial or trying to steal each other's data. Second, there is no utility in non-fungible tokens for GLAM governance or assets; it would be better (and certainly cheaper) to hold a meeting or write a typical contract.
Note! The recording of the LibNFT project briefing is now up on YouTube, and I've posted a follow-up with additional thoughts.
Why Use Blockchain
As the LIBnft whitepaper points out, "in its simplest form, a blockchain is a communally maintained distributed ledger, or database, that reliably and immutably stores digital information" (summarizing a New York Times glossary). The "database" term is crucial—blockchain is a technique for storing and retrieving information, much like one would do with a run-of-the-mill database. This database has some interesting characteristics: data can't be erased once it is written and there are copies of the database spread over the network. Rather than "distributed", though, a blockchain database is "decentralized". A USENIX article makes an important distinction between "decentralized" (which blockchain is) and "distributed" (emphasis added):
A distributed system is composed of multiple, identified, and nameable entities. DNS is an example of such a distributed system, as there is a hierarchy of responsibilities and business relationships to create a specialized database with a corresponding cryptographic PKI. Similarly the web is a distributed system, where computation is not only spread amongst various servers but the duty of computation is shared between the browser and the server within a single web page.
A decentralized system, on the other hand, dispenses with the notion of identified entities. Instead everyone can participate and the participants are assumed to be mutually antagonistic, or at least maximizing their profit. Since decentralized systems depend on some form of voting, the potential for an attacker stuffing the ballot box is always at the forefront. After all, an attacker could just create a bunch of sock-puppets, called “sibyls”, and get all the votes they want.
In a distributed system sibyls are easy to deal with because there are responsible entities in the system who act as gatekeepers. These gatekeepers are often recruited to also prevent “undesired” activity. This is especially true of financial gatekeepers who perform payment processing and have legal obligations to block large swaths of criminal activity.
Decentralized systems purport to eliminate the presence of gatekeepers. But there is a problem as without such gatekeepers there is no efficient solution to the sibyl problem. Instead there are ugly hacks, such as a “proof of work” system where sibyls are only prevented by the need to waste resources, or “proof of stake” where the design literally becomes “he who has the gold makes the rules”.
So one of the defining characteristics of blockchain—distinguishing it from other database technologies—is that it guards against gatekeepers. But who are the GLAM gatekeepers, and why would we need this technology? Blockchain is a complex technology, and anyone who has dealt with complex technologies—such as digital heritage scholars—knows they are expensive and hard to maintain and preserve.
If you need more background or convincing why blockchain is a technology in search of a problem (as a general issue, not just for GLAM institutions), Cal Paterson goes into much more detail in his article: "There aren't that many uses for blockchains".
Why use NFTs
Since blockchain offers no inherent benefit to the GLAM community, there must be something about NFTs on top of blockchain that makes it all worthwhile. Back to the whitepaper, the authors say that "Web 3" is the reason.
But the second group, which we will call Group 2, is interested in Web 3 for the object, outcome, or return, but instead for the processes that Web 3 can enable. Group 2 analyzes Web 3, according to Klein, for “the way it can decentralize decision making, or create new forms of transparency, or bind a whole community, or project, or even company to rules and protocols that can never be broken. ... These are the people who are trying to make a future for [Web 3] that is more interesting than [] just some payment infrastructure operating in the background of the internet.”
The vitality of the Group 2 conversation exists beyond the market value of Bitcoin, the current “crypto winter,” or whether you will miss out like Larry David, as one of those Super Bowl ads warned millions about. This Group 2 conversation—the one about the possibilities for and with Web 3—is the conversation that GLAM sector leaders should be having and paying attention to, for it allows us to explore the possibilities of blockchain technology generally, and NFTs, without worrying about how much money we may have gained or lost.
A shorter, if more colloquial, way to put this is "code is law." This description of NFTs resembles funding decisions or project governance rather than selling rights to a digital representation of a cultural object. The "code" in this case is machine language in the NFTs to enforce specific other actions to happen. Think of it as: if variable 'x' has 'y' value, then this little bit of code in the NFT executes to make 'z' happen. As a real-world example, if the S&P 500 index is 4,000 then transfer this NFT to receiver 'z' in return for '$' amount.
What is the use case for this kind of code-is-law in GLAMs? There might be some edge cases—funding bodies releasing money to recipients based on some condition? ...or many institutions working together in a so-called "distributed autonomous organization" using NFT tokens to vote on project governance proposals? GLAM institutions tend to cooperate more openly than your average institution or corporation. Are these edge cases worth the overhead in NFTs, blockchains, and their underlying technologies?
"But No, Really: Why NFTs?"
Given all the talk about bored apes, why should galleries, libraries, archives, and museums (GLAM) pay any attention at all to NFTs? There are several reasons. First, NFTs are collectible digital assets, and the GLAM sector long has been involved in accumulating, curating, and preserving collectible digital assets. In the world of curation, an NFT really is like just a different form of investment into the very thing we love as collectors and guardians of rare and unique material—just in digital form.
Second, NFTs can have brand value. Based upon their one-of-a-kind nature, NFTs can carry cultural cachet in at least two different ways. For one, the subject matter of an NFT can be unique enough that the token carries a certain level of prestige. Additionally, the entity that issues the NFT can be credible enough that the issuance of a token from that institution bestows distinction upon the issued token. Therefore, association with a reputable institution increases the value of the NFT.
The answer to "why NFTs" is summed up as:
- because we can; and
- because we would look cool.
None of this sounds like GLAM principles to me
At the conclusion of the whitepaper:
We have begun this project by asking a fundamental question: can blockchain technology generally—and NFTs specifically—facilitate the economically sustainable use, storage, long-term preservation and accessibility of a library’s special collections and archives? ... Regardless of the outcome of this research, we believe that this space will develop quickly, with or without GLAM entities’ involvement or participation, and that GLAM leaders ignore blockchain, digital assets, and the metaverse at their institutions’ peril.
Nope. This sounds like a technology in search of a problem. It is a complex technology in which the complexity does not add nearly enough utility to justify its cost. Although the first sentence sounds like a research question, the second sentence already presumes the answer. No, GLAM institutions are not at peril if they don't participate in the latest hyped technology.