Guest Article by Barbados Stamps
Article first written in August 2022 but my thoughts are still relevant in March 2024.
Back in 2022, in response to a tweet about a new issue of NFT’s by Austria Post, I said “…there’s no way I’m investing in an NFT”. From this I was asked to offer some thoughts as to why I wouldn’t buy and NFT and so in this short article I outline my thoughts on the matter.
The starting point for this is the excellent article authored by The Digital Philatelist (James Gavin) in the PTS 2022 Handbook. It is a great introduction to the topic and I have a huge amount of respect for him and the work he does in the digital arena. What he said is that there is a new and growing trend in philately and stamp collecting and that is Crypto Stamps or Non Fungible Tokens (NFT). This trend has led some to claim that this is the future of philately, however, before arriving at this conclusion, there are one or two issues that buyers and collectors would do well to note.
First, is the blurring of lines between stamps and collectibles. Some crypto stamps are not actually stamps, but limited edition collectibles. There is, of course, nothing wrong with issuing collectibles; some would argue that Royal Mail have been doing this for years. More recent Royal Mail issues such as Marvel Characters, Harry Potter stamps and Star Wars have been aimed firmly at the collectibles market and not necessarily at the traditional stamp collector. Sure, stamp collectors keen to keep up their current QEII collection are buying them, but how many are actually used to send letters? Further, with crypto stamps, the people buying and trading them are often not actually stamp collectors, but investors and traders.
Second, as James pointed out in his article, anyone can release crypto stamps and make them available on Opensea and, as he also highlighted, they are equivalent to Cinderella stamps. More and more people are doing this but far too many of them seem to think that by scanning in a rough copy of a common stamp, it suddenly becomes valuable. In this respect, it has some way to go before it settles down into a proper market place. Even when it has been done by established players, like the British Guiana 1c Magenta offering from Stanley Gibbons & Showpiece, the take up was modest. Moreover, the secondary market in this offering doesn’t appear to be making headlines.
In terms, therefore, of crypto stamps being a legitimate branch of philately, well, having created them and aimed them at stamp collectors we would have to conclude that it is now ‘de facto’ a branch of philately. To ignore them would be churlish. That having been said, personally, I still have several issues with them.
For a start, there is the issue of accessibility. If you were to run a straw poll of collectors, I doubt more than 5% would understand what blockchain is, or does, let alone be able to access it. If crypto really is the future then collectors are going to need to be able to simply open and trade on a platform that gives access to this market and currently, that is fraught with danger and difficulty. I say this with a degree of confidence as during 2020 I worked closely with one of the U.K.’s biggest blockchain ledgers so I understand the mechanics behind the system.
Of course, even if they can access the tools to be a part of this market, then there’s the issue of tangibility. Ask collectors why they collect and you will get a range of answers, all of which are legitimate. For some it’s the thrill of the chase, others the satisfaction of completing pages in an album. What most appreciate, however, is the ability to access and view their collection at any point. True, you can do that with NFT’s, but can you display them? Can you show them to friends and collectors at a club meeting? And how can you show something that it intangible? If the answer is ‘on a screen’ then why bother to collect them in the first place? People can get good high resolution images of pretty much any stamp they want for free, so why bother paying for the privilege?
Crypto, particularly crypto currencies, have a patchy track record. Various currencies have collapsed in the last decade and with them, accusations of large scale fraud. As each currency is backed by nothing more than confidence, it is kept alive by promise. So, the value of your ‘investment’ could well go down as well as up, as has been demonstrated by the recent collapse in the value of a number of digital currencies (July 2022). Whilst that volatility can also be true of stamps, buying the right material at the right price does, if you are interested in value, provide something of a hedge against currency fluctuations. The crypto market is also easily manipulated, something collectors would not be likely to understand. Those in the know understand that ‘wash trades’ (essentially selling something back to yourself at a higher price to make it seem valuable) have given the impression that an NFT is ‘desirable’ and thereby encouraged other collectors and investors to pile in.
Finally, there is the issue that this market is essentially based on an artificially created scarcity, meaning that at any point it could disappear. More of the scarce items could be created and issued thereby devaluing existing NFT’s. Further, with a digital war currently underway in cyberspace, security of individual and dealer accounts is a hot topic. Nothing is safe, it seems and as each day passes, these determined to break into crypto wallets get a step closer to being able to do so. And of course, all of this needs electricity to keep the system alive, the very thing we are all demanding more of every day.
The bottom line is that Crypto Stamps are, as James concludes in his article, here to stay. They are, therefore, by definition, a legitimate branch of philately and I’m sure they will be defended by many advocates, keen to embrace this new development. For me, however, I’ll happily continue filling the gaps in my collection, visiting stamp fairs and buying online from dealers as before. Given my limited resources and current focus on particular areas of Philately, I’m afraid I still won’t be spending any money on crypto stamps any time soon.
Do you own any NFT stamps?
What are you thoughts on NFTs and their future within philately?
Comment below!
Join the debate about NFTs at Virtual Stampex.
We have a special roundtable on this subject on Thursday 2nd May 2024, at 19:00 UK time (14:00 EST). Reserve your seat today.
Barbados Stamps is a friend of the PTS & Stampex. Find out more about Barbados and discover a wide range of resources at: www.barbadosstamps.co.uk
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