Ilaria (21), who is studying Communication and media, loves illustrating and since a child has loved Marvel comics, known for their many famous superheroes. For a long time, she dreamed of getting hold of a real first edition of one of the 1950s comics. Comics from that time are collector’s items and cost huge amounts of money. But the editions that she is now eying up aren’t on yellowed paper as you might expect; they’re made up of pixels. Such an edition is available as NFT, an image linked to a unique code, and which can then be attributed 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 to get involved with these NFTs. In November, the first NFT event was organised on campus Woudestein by the Erasmus Tech Community, a group of students who are interested in all kinds of new technologies. Around forty enthusiastic students came to the Theil building to find out what a start-up could teach them about the ‘new art form’, she says. There was also a quiz with questions to test how much participants already knew about NFTs. The winners received an NFT specially created for the event.
The number of students investing in NFTs seems to be growing, says Ilaria: “Last year, I didn’t hear anything about it, but now I hear lots of students talking about it.”
The reasons why students are buying NFTs are similar. Usually the work appeals to them in the same way as an artwork can appeal to the viewer. Economics student Sandra (22), who also attended the event, bought her boyfriend an NFT a year ago. The work was made by artist Jack Butcher, better known known by the name ‘Visualize Value’. It’s an image with black and white framed clip art showing various categories and accompanied by the following comment in English: ‘You likely fall into one of these categories: 1. What’s an NFT? 2. NFTs are bullshit. 3. NFTs are a breakthrough technology.’
For student Leon (23), who is studying for his master’s degree in Strategic Entrepreneurship, the Japanese animation style and the bright colours of artist Dazed Ducks appeal to him. Both students also mention that NFTs support artists at a time when their business was going badly because of the corona crisis.
‘No longer just for nerds’
In 2021, the NFT suddenly appeared all over the media too. Film stars traded in them, and numerous success stories were told about obscure works that had risen in price by hundreds of thousands of euros over a few days. But those stories are old. Now the NFT reaches the wider public.
Lemar Bachtiar (24) has just graduated in Financial Law. He has invested in Bitcoin since 2017 and became interested in the logics behind the digital currency. Lemar: “That logic is the idea of a decentralised monetary union, a value system that exists without a central bank. And with the emergence 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 commercial data analyst Wouter Kloosterman (27), he established the start-up Authic. Bachtiar’s former fellow student Laurens Groothuis (25) now works as its relations manager. The online marketplace is currently recruiting artists and officially opens in April. With the company, he wants to make NFTs more accessible. “It needs to become a kind of bol.com for NFTs.”
The guys hope to become the biggest supplier for the Benelux and, like at bol.com, want customers on Authic to be able to pay via Ideal in euros. The goal is clear, he continues: “NFTs are no longer just for nerds, and we want to respond to that.”
Hoping for profit
Interestingly, although EUR students very much believe in the potential of NFTs and blockchain, they have not yet started investing en masse.
Sandra: “Although my boyfriend is a huge crypto nerd, we haven’t started investing or speculating with NFTs. We’ve still only got one artwork, and that hasn’t risen in value over the year. In fact, people who do a lot of NFT transactions often seem to be risk investors. Although I support investing in ideas with future potential and buying art that I value, I prefer not to get involved in senseless speculations that often prove to be fraudulent practices.”
Leon does invest and is in a chat group where investors ‘hope to make a profit’. But he adds: “I come from the island of Antigua and so do most of the people in the app group. There, NFTs are more current. In the chat group, we discuss a lot about when to buy and sell what. Usually profits are around five hundred euros per NFT.”
A version of the header illustration created by Erasmus Magazine illustrator Esther Dijkstra for this article will be offered from April via the Authic platform. Because the technology is relatively new, the editors want to see what happens with an NFT the longer it is offered. After six months, we will review it and write an article about the process.
Revolution in art?
Does the step to the wider public also mean that the art market will totally change? Professor Filip Vermeylen (ESHCC) is sceptical about that. He specialises in the international art market. He explains: “The technology behind the NFT is revolutionary. Because a unique code is linked to an artwork, the trade in digital art becomes much more transparent, less susceptible to fraud and it’s easier to establish ownership for digital art. With a jpeg file, that’s obviously unimaginable. No one saw the value in it because you could copy it endlessly.”
However, Vermeylen doesn’t think that the arrival of digital art will displace interest in other art. He continues: “The reason why I think that is because I recently attended a lecture by a digital art specialist from Sotheby’s, who explained how the famous auction house attracts new buyers by organising NFT auctions, but then also gets them interested in traditional art auctions. Last year, the auction house organised nine NFT auctions, offering works totalling 199 million in value. 78 percent of the bidders were attending a Sotheby’s auction for the first time and the average age was ten years younger. The big auction houses therefore see NFT as a way to attract a new generation of art buyers, not to replace the existing art market. Museums like the British Museum are also converting part of their collection into NFTs, to interest a younger audience.”
That doesn’t surprise him. “I’m currently writing a book about the development of the international art market over the centuries, and you can see that not every innovation immediately means that the old disappears. For example, the trade in portraits continued to exist alongside the trade in landscapes. I expect that digital art will continue to exist alongside traditional art and that one won’t replace the other but will actually accompany the old.”
Valuation
Although an NFT is a value, it is determined by a form of scarcity similar to how scarcity works with Pokémon cards. In that game a Pidgey, a small sparrow-like Pokémon, was much more common than a Charizard, a dragon Pokémon. For that reason, the Charizard cards were much more highly valued in the Pokémon community. Vermeylen explains: “These are mainly must-haves which have a value in a certain group of contemporaries or players. The rules about how that value is determined vary in each group.”
Nevertheless, the value retention of digital art can’t yet be compared with that of traditional art, says the expert. “The continued value of art is usually determined by whether the artist is part of the accepted list of better-known names. Once that ball starts to roll, it creates its own value. The reason why Vermeer is generally regarded as an important artist and that his works are highly valued is not only due to his special technique, but firstly because so many people feel that his work is good and important for the community. The same applies to Banksy. His work has value for a large group of people, so everything he creates automatically has value. That works with NFTs too. When an NFT Vermeer or NFT Banksy appears, their work will retain its value.”
Bubble
Over the past year, the growth of the NFT market has received a lot of criticism. The main criticism concerned the fact that scammers made NFTs more popular than they are, by selling them to each other. This resulted in the products becoming scarcer and the price rising. They then sell the NFT to people who know nothing about it.
Those risks are particularly prevalent on the most popular NFT marketplace, opensea.io. This is a site on which thousands of NFTs are posted every day by all kinds of people, and which also has a small number of pictures that now have a market value of hundreds of thousands of euros.
Lemar is aware of this criticism: “Before we invest in artists, we want to know exactly what they make and the quality of the work.”
Besides the criticism of pushing up the value, experts see lots of security risks. NFTs can allegedly contain bugs and cause data leaks.
Polak-NFT
Unfortunately, Ilaria didn’t win the quiz at the NFT event in the Theil building. Because the winner received something very special. A prize created as a souvenir of the event. One of the three prizes was an NFT with pixel art of the Polak building. Business administration student Victor (19) made it specially for the occasion. He says proudly: “It’s unique.” Probably the first image of the campus immortalised on the blockchain.
