EUR students buy NFT artwork and create their own marketplace

Ilaria (21), a Communication and Media student, enjoys illustrating and has loved Marvel comics, known for many famous superheroes, from a young age. She has long dreamed of having a real first edition of one of the comics from the 1950s. Comics from that time are collector’s items and cost a lot of money. But the editions that she now has in mind do not consist of yellowed paper as one might expect, but pixels. Such an edition is available as an NFT, an image that is linked to a unique code and can therefore be assigned a certain value. That code is in the blockchain, a kind of database in which all the transactions in the world can be stored.

‘New art form’

Ilaria is not the only student at Erasmus University who is worried about these so-called NFTs. In November, the first NFT event on the Woudestein campus was organized by the Erasmus Tech Community, a group of students involved in all kinds of new technologies. Some forty enthusiastic students flocked to the Theil Building to hear what a new company could teach them about the ‘new art form,’ she says. There was also a quiz with questions that tested how much the participants knew about NFTs. The winners received an NFT specially prepared for the occasion.

The number of students investing in NFT seems to be growing, Ilaria thinks, “I never really heard about it last year, but now I hear from a lot of peers about it.”

The reasons students buy NFTs are similar. Generally, the work attracts them as a work of art can attract its admirer. Economics student Sandra (22), who was also present at the event, bought an NFT with her boyfriend a year ago. The work was created by artist Jack Butcher, better known as ‘Visualize Value’. It is an image with a black and white framed graph with different categories. The following comment is attached in English: “You probably fall into one of these categories: 1. What is an NFT? 2. NFTs are meaningless, 3. NFTs are a revolutionary technology.”

For student Leon (23), who is pursuing a master’s degree in Strategic Entrepreneurship, what attracts him mainly is the Japanese anime style and bright colors of the work of artist Dazed Ducks. Both students also mention that NFTs support artists, at a time when their business was going badly due to the corona crisis.

‘Not just for nerds anymore’

In 2021, the NFT was suddenly all over the media. Movie stars traded in it, and success stories abounded about obscure works that rose in price by hundreds of thousands of dollars in a matter of days. But those stories are no longer the case. Now the NFT reaches the general public.

Lemar Bachtiar (24) has just graduated in Financial Law. He has been investing in bitcoin since 2017 and became interested in the logic behind the digital currency. Lemar: ‘That logic is the idea of ​​a decentralized currency union, a value system that exists without a central bank. And with the advent of NFTs I was able to combine that interest with my love of art.’ Together with recently graduated cybersecurity specialist Tat Luat Nguyen (23) and business data analyst Wouter Kloosterman (27) he founded the start-up Authic. Bachtiar’s former fellow student Laurens Groothuis (25) now works there as a relationship manager. The online marketplace is now recruiting artists and will officially open in April. With the company, he wants to make NFTs more accessible. “It should become a kind of bol.com for NFTs.”

The guys hope to become the biggest supplier in the Benelux and, like bol.com, Authic customers can simply pay with euros through Ideal. The goal is clear, he continues: “NFTs are no longer just for nerds and we want to respond to that.”

hope of profit

It is striking that EUR students, while strongly believing in the possibilities of NFTs and blockchain, have yet to start investing en masse.

Sandra: “Although my friend is a big fan of cryptocurrencies, we are not yet investing or speculating with NFTs. We only have one piece of art and it has hardly increased in value in a year. By the way, it seems that people who do a lot of NFT transactions are often still risky investors. While I am in favor of investing in ideas with future potential and buying art that I value, I prefer not to engage in pointless speculation that often turns into scams.”

Leon invests and is in a chat group where investors “hope to make a profit.” But he clarifies: “I come from the island of Antigua and so do most of the people in the app group. NFTs are already more in circulation there. Within the chat group we discussed a lot about when to buy and sell something. But the profits can be higher, now usually around five hundred euros per NFT.”

A version of the great illustration that Erasmus MagazineThe illustrator Esther Dijkstra made for this article will be offered from April through the Authic platform. Since the technology is fairly new, publishers want to see what happens to an NFT the longer it is offered. After six months we take stock and write an article about the process.


Image by:
Esther Dijkstra

Revolution in art?

Does the move to the general public also mean that the art market will change completely? Professor Filip Vermeylen (ESHCC) is skeptical about this. He is specialized in the international art market. He says: “The technology behind NFT is revolutionary. Because a unique code is linked to a work of art, the trade in digital art becomes much more transparent, less prone to fraud, and it is easier to register the ownership of digital art. Of course, that was unimaginable with a jpeg file. No one saw any value in that because you could copy it endlessly.”

However, Vermeylen does not believe that the arrival of digital art will displace interest in other arts. He continues: “The reason I think so is because I recently attended a talk by a Sotheby’s digital art specialist who talked about how the well-known auction house attracts new buyers by hosting NFT auctions, but then also attracts them. to traditional art auctions. Last year, the auction house hosted nine NFT auctions bidding a total of $199 million. Of the applicants there, 78 percent were bidding for the first time at a Sotheby’s auction and the average age was ten years younger. Major auction houses therefore see NFT as a way to attract a new generation of art buyers, not to replace the existing art market. Museums such as the British Museum are also starting to convert parts of their collection into NFTs, to interest a younger audience.†

That doesn’t surprise him. “I am currently writing a book on the development of the international art market over the centuries and you can see that every innovation does not necessarily mean that the old disappears. Thus the portrait trade continued to exist alongside the landscape trade. My expectation is that digital art continues to exist alongside traditional art and that one does not replace the other, but rather accompanies the old.”

Valuation

The value of an NFT is determined by a form of scarcity somewhat similar to how scarcity works with Pokemon cards. In that game, a Pidgey, a Pokémon that looks like a small sparrow, is much more common than a Charizard, a Pokémon that looks like a dragon. As a result, Charizard cards are more highly valued within the Pokémon community. Vermeylen explains: “It is mainly these devices that have value within a certain group of contemporaries or players of a certain game. The rules for how that value is determined differ by group.”

Still, the value retention of digital art is currently not comparable to that of traditional art, says the expert. “The enduring value of art is generally determined by whether the artist is included in the accepted canon of most famous names. Once the ball rolls, it creates its own value. The reason why Vermeer is generally considered to be a great artist and why his works are worth a lot has not only to do with his special painting technique, but mainly because many people think that his work is good and important. for the community. It’s the same with Banksy. His work has value to a large group of people, so whatever he creates automatically has value. This is how it works with NFT. The moment an NFT-Vermeer or NFT-Banksy comes along, his work will be worthless.”

bubble

The growth of the NFT market was met with much criticism last year. The main criticism is that scammers make NFTs more popular than they are by selling them to each other. As a result, products become scarcer and the price rises. After that price increase, they sell the NFT to people who don’t know anything about it.

Those dangers are common with the most popular NFT marketplace, opensea.io. This is a site where everyone posts thousands of NFTs daily and at the same time contains a small number of images that now have a market value of hundreds of thousands of euros.

Lemar says he is aware of these criticisms: “Before doing business with artists, we want to know exactly what they are doing and what quality the work has.”

In addition to criticism of value accumulation, experts see many security risks. NFTs can contain bugs and cause data leaks.

Polish-NFT

Unfortunately, Ilaria did not win the quiz at the NFT event in the Theil building. The winner received something very special. An award made in memory of the event. In all, three were pardoned. One of the prizes was a pixel art NFT of the Polak building. Business administration student Victor (19) did this especially for the occasion. He says proudly: “He is unique”. It is probably the first image of the campus immortalized on the blockchain.

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