EUR students buy NFT artwork and start their own marketplace

Ilaria (21), communication and media student, enjoys illustrating and has loved the Marvel wallets from an early age, known for many famous superheroes. For a long time she dreamed of owning a real first edition of one of the comics from the 1950s. Comics from that time are collectors’ items and cost a lot of money. But the editions she now has in mind are not made of yellowed paper, as one might expect, but of pixels. One such version exists as NFT, an image that is linked to a unique code and thus can be assigned a certain value. That code is on the blockchain, a kind of database in which all transactions in the world can be stored.

‘New art form’

Ilaria is not the only student at Erasmus University who is taken in by 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. About forty enthusiastic students came to the Theil building to hear what a start-up could teach them about the ‘new art form’, she says. There was also a quiz with questions that tested how much participants already knew about NFTs. The winners received an NFT specially made for the occasion.

The number of students investing in NFTs seems to be growing, Ilaria believes: “I never really heard about it last year, but now I hear a lot of fellow students about it.”

The reasons why students buy NFTs are the same. Usually the work appeals to them as a work of art can appeal to 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 the artist Jack Butcher, better known as ‘Visualize Value’. It is an image with a black and white framed plot diagram with different categories on it. Attached is the following comment in English: “You probably fall into one of these categories: 1. What is an NFT? 2. NFTs are nonsense, 3. NFTs are a breakthrough technology.”

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

‘No longer just for geeks’

In 2021, NFT suddenly appeared everywhere in the media. Movie stars traded in it, and success stories abounded of obscure works increasing in price by hundreds of thousands of dollars in a matter of days. But those stories are no longer the case. Now NFT reaches out to 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 monetary 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 cyber security specialist Tat Luat Nguyen (23) and commercial data analyst Wouter Kloosterman (27), he founded the start-up Authic. Bachtiar’s former student friend Laurens Groothuis (25) now works there as relations 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 boys hope to become the largest provider in the Benelux, and just like at bol.com, customers at Authic can simply pay with euros via Ideal. The goal is clear, he continues: “NFTs are no longer just for geeks, and we want to answer that.”

hope for 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 crypto geek, we are not yet investing or speculating in NFTs. We only have one piece of art and it has hardly increased in value over a year. By the way, it seems that people who do a lot of NFT transactions are often still venture investors. While I am in favor of investing in ideas with future potential and buying art that I value, I prefer not to get involved in pointless speculation that often turns into scams.”

Leon invests and is in a chat group where investors ‘hope for profit’. But he qualifies: “I’m from the island of Antigua, and so are most people in the app group. NFTs are already more in circulation there. In the chat group, we discuss a lot about when to buy and sell something. But the profit can be higher, usually it is now around five hundred euros per NFT.”

A version of the large illustration that Erasmus Magazineillustrator Esther Dijkstra for this article will be offered from April via the Authic platform. Because the technology is fairly new, the editors want to see what happens with an NFT the longer it is offered. After six months, we take stock and write a piece about the process.


Picture of:
Esther Dijkstra

Revolution in art?

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

Still, Vermeylen does not believe that the arrival of digital art will displace interest in other art. He continues: “The reason I think so is because I recently attended a talk by a digital art specialist from Sotheby’s who talked about how the well-known auction house is attracting new buyers by organizing NFT auctions, but also attracts them to traditional art auctions. . Last year, the auction house organized nine NFT auctions, where a total of DKK 199 million was bid. Of the candidates there, 78 percent were bidding for the first time at a Sotheby’s auction, and the average age was ten years younger. The large auction houses therefore see NFT as a way to attract a new generation of art buyers, not as a replacement for 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. “

It doesn’t surprise him. “I am currently writing a book about 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 trade in portraits continued alongside the trade in landscapes. My expectation is that digital art will continue to exist alongside traditional art, and that one will not replace the other, but rather accompany the old.”

Assessment

How much an NFT is worth is determined by some form of scarcity, somewhat similar to how scarcity works with Pokémon 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, the cards featuring Charizard are more appreciated in the Pokémon community. Vermeylen explains: “It is mainly such gadgets that have a value within a certain group of contemporaries or players of a certain game. The rules for how that value is determined differ from group to group.”

Nevertheless, the value retention of digital art is currently not comparable to traditional art, says the expert. “Art’s lasting value is usually determined by whether the artist is part of the accepted canon of better-known names. Once that ball gets rolling, it creates its own value. The reason that Vermeer is generally considered a great artist and that his works are worth a lot is not only related to his special painting technique, but mainly because so many people think that his work is good and important to society. It’s the same with Banksy. His work has value to a large group of people, so anything he creates automatically has value. This is how NFTs work. The moment there is an NFT-Vermeer or NFT-Banksy, his or her work will stabilize in value.”

bubble

The growth of the NFT market received some criticism in the past year. The biggest criticism is that scammers are making NFTs more popular than they are by selling them to each other. As a result, the products become more scarce and the price increases. After that price increase, they resell NFT to people who don’t know anything about it.

These dangers are common with the most popular NFT marketplace opensea.io. This is a site where thousands of NFTs are posted daily by everyone, 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 this criticism: “Before we do business with artists, we want to know exactly what they are doing and the quality of the work.”

In addition to the criticism of building a value, experts see many security risks. NFTs can contain errors and cause data leaks.

Polish NFT

Ilaria unfortunately did not win the quiz at the NFT event in the Theil building. The winner got something very special. An award presented to commemorate the event. A total of three were forgiven. One of the prizes was an NFT with pixel art of the Polak building. Business economics student Victor (19) made 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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