Despite the decline in NFT sales and prices in 2022, NFTs have debuted in Europe in what might be an unassuming use case: stamps. After pioneering a novel application of Crypto Stamp Art first in Austria with the Austrian Post in 2019, VariusSystems – a leader in digital identification and NFTs – just announced an expansion with the Netherlands and the United Arab Emirates (UAE) that will continue for the upcoming years. All three countries have NFT stamps in their medium and long-term strategic plan. Many countries around Europe, Africa, and Asia are now also actively exploring crypto stamps too.
NFTs have been an incredible vehicle for authenticating digital art and music, helping earn NFT the “word of the year” by Collins Dictionary in 2021: Beeples’ Everdays selling for $69.3 million, Beeple’s Human One for $28.9 million, and CryptoPunk 4156 selling for $10.2 million in 2021, just to name a few. But NFT art is only one of many use cases.
The real utility of NFTs is in their ability to authenticate ownership of an asset on a distributed and immutable digital ledger. That capability can help prevent fraud over specific physical items, which has led to the term “phygital” to describe physical and digital asset linkages that exist on the blockchain.
“NFTs are really fun for collectability and art, but they are a tiny part of consumer blockchain… Eventually, we will all interact with NFTs because they will be our airline tickets, membership cards, and more,” said Gary Vaynerchuk, chairman of VaynerX and the chief executive officer of VaynerMedia.
Crypto stamp art has emerged as a use-case for NFTs because of the need to guarantee the provenance of physical mail. “Crypto stamp is the first use-case for Austrian Post, dipping our toes in the water and making use of blockchain technology. It was originally intended to be a simple and familiar product where we could explore new fields, learn to ask the right questions, and acquire new knowledge before advancing more sophisticated products. The areas of implementation are unlimited; being successful and remaining market leaders are our goals,” said Patricia Liebermann, head of philately for the Austrian Post.
The United States Postal Service, for example, reported a 161% increase in complaints of mail fraud between March 2020 and February 2021. Further, the incidence of stolen checks increased by 400% between 2019 and the predicted end of year, according to research from Professor David Maimon at George State.
Moreover, mail fraud often is a leading cause of tax fraud – which is roughly 16% throughout Europe – because individuals are able to project distinct identities in different locations.
Blockchain-based NFT crypto stamps with a physical digital twin were first introduced by the Austrian Post in 2019. They added new artwork and reimagined the “vermillion mercury” the most valuable vintage stamp in Austria that began in 1856 – becoming one of the most successful NFT projects in the world with almost 1 million crypto stamps sold.
Buyers receive not only a limited edition physical stamp but also a digital mystery box with four additional NFTs that vary in their rarity. The physical stamps are connected using near-field communication (NFC) implanted into the final product. “Products that are securely connected to an NFT via NFC chips, for example, can be easily verified on the blockchain, allowing users to check whether the product is the original,” said Michael Dorner, chief executive officer of VariusSystems and president of the International Card Manufacturers Association.
While the crypto stamps in their current form do not prevent mail fraud since the actual stamp does not have the NFC in it, by design for the collectors, it is the first step towards pioneering NFTs for physical mail. Placing the NFC in the actual stamp comes down to design and consumer demand.
The use cases do not stop with stamps; NFCs can be used on any physical product. “Cars of the future will have their mileage written and stored in the blockchain, making it impossible for fraudsters to sell a car with altered odometers… the whole service intervals and repairs will be stored on-chain so that nobody can sell a broken car – or even a watch, luxury bag, or any product for that matter… this will take place behind the scenes, out of sight for the end user,” Dorner continued.
Crypto stamps are taking the world by surprise, particularly after the success of Austria in 2019 and the Netherlands earlier this year selling over 800,000 pieces. “After meeting with several leaders of postal companies around the world at the Universal Postal Union from the United Nations summit in Frankfurt earlier this week, we felt an enormous interest not only in the NFT stamps but in blockchain technology as such. Countries from all around the globe, from Iceland to Togo, from Portugal to Singapore, are interested in how this digital revolution with decentralized blockchains can help their businesses grow and stay ahead of the curve,” said Dorner.
Given the importance of Germany and France in the European Union, many are wondering whether they too will explore the use of crypto stamps, among other NFT applications. Value added in the German manufacturing sector, as a share of gross domestic product, is nearly 20% as of 2021, so NFTs have a large potential impact on mitigating fraud of physical goods.
“Moving from web2 to web3 and adopting blockchain technology is as important for Germany as the change from riding a horse carriage to driving in automobiles. We love engineering in our cars and we are world leaders in it. If we can’t manage to adapt or use blockchain, we will fall behind as a technology leader to the last in the row… and we all know what happened to the horse carriage – they ended up in the museums,” said Torsten Albig, former Minister-President of Schleswig-Holstein and managing director of the Association of German Postal Service Providers.
With the widespread support for digital modernization in Europe, there is a unique opportunity to take the lead with blockchain technologies, starting with even the most basic goods and services, like physical mail and the postal office. Collectible crypto stamps are only one of many use cases in the web3 ecosystem, pointing towards the utility NFTs can provide.News Source: Forbes