In this last quarter of 2021, the cryptocurrency market is booming. Bitcoin and altcoins have recovered the lost value from the short-lived bearish momentum from the summer and are headed towards new heights. This bullish market has made trading platforms such as Bitlevex increasingly popular, as they allow investors to speculate on the fluctuating prices of cryptos.
Two major reasons for this strong bullish momentum are the growth of the DeFi market and the proliferation of NFTs. The latter has become a multi-billion industry, with sales volumes of these digital assets surging to $10.7 billion in Q3 2021 alone.
In this article, we analyze one recent event, where the Swiss postal service has released the first BFT-poed stamps on the blockchain. To this end, we explore the basics of NFTs and the previous relationships of Switzerland with the blockchain sector. Finally, we will take a look at how the NFT stamp works and how it can be a great addition for both philatelists and NFT collectors.
What are NFTs?
NFT, or non-fungible tokens are digital assets that possess a unique set of characteristics and are registered on the blockchain. This makes them easily identifiable and distinguishable from one another.
An important feature of NFTs is that they provide true ownership to their users. The individual that is in possession of the private key of the NFT in question is the only one that can access and transfer it.
Recently, NFTs have seen an increase in popularity as digital collectibles or digital works of art. The reason behind this is that they are easily transferable and provide collectors instant exposure to thousands of artists’ works.
NFTs are made possible through the implementation of smart contracts. The Ethereum blockchain is one of the major blockchains that fosters more than 90% of all NFTs on the market. However, the popularity of Ethereum has resulted in extremely high fees for creating and transferring NFTs, pushing users to look for other solutions for their collections.
What is Polygon?
Polygon is a Layer 2 solution for Ethereum. This means that its goal is to improve the functionalities of the base chain network by providing faster transactions and cheaper gas fees. It uses autonomous smart contracts that allow users to benefit from the security of the original Ethereum blockchain while simultaneously enjoying low fees and fast transactions.
These features have made Polygon and its MATIC token very popular for creating NFTs. Minting an NFT on Polygon costs zero gas fees, which is a far cry from the hundreds of dollars needed to create an NFT on the original Ethereum blockchain.
Additionally, mining and transferring NFTs on Polygon doesn’t require huge amounts of electricity, making it a sustainable solution for collecting digital assets. These reasons contributed to the Swiss postal office choosing Polygon to release their world-first NFT postal stamps.
Why is Switzerland considered to be a crypto-friendly country?
Switzerland has a long history with cryptocurrencies. It is considered one of the havens for blockchain technology. The government and businesses actively support blockchain development in the country.
The country is the home of the “Crypto Valley”, near the city of Zug, where blockchain leading companies such as the ethereum foundation and Bitcoin Swiss have established their headquarters.
Interestingly enough, different cantons in Switzerland tax cryptocurrencies differently. While some may apply wealth taxes on crypto, others choose to waiver these taxes altogether. This makes some cantons in Switzerland extremely interesting for developing cryptocurrency and blockchain-related businesses.
How does the Swiss blockchain-powered stamp work?
The Swiss Post plans to release a new stamp in November 2021, that will be linked to the Polygon blockchain. At a first glance, the stamp will resemble the classical self-adhesive Swiss postal stamp. The design will depict the Matterhorn and will be priced at the usual 8.90CHF per stamp.
However, where the stamp will differ, is that it will be accompanied by a unique QR code that will allow collectors to claim a unique NFT on the Polygon blockchain. And while the designs of all physical stamps will be identical, the NFTs will present different designs.
The Swiss Post office will issue 175.000 such stamps. Upon purchase, the customer will not be able to tell the difference and what type of digital design they will acquire. Once they claim the stamp on the blockchain, the design will be revealed to them. More importantly, these digital designs will vary in rarity. There are 65.000 of the most common ones, while only 50 of the rarest designs will be released to the public.
NFTs have seen an incredible rise in popularity, and are bringing blockchain technology into the mainstream. NFT projects like the one we discussed in this article should increase this exposure even more.