Despite the NFT hype, there are some things in life that cannot be transferred. For instance, birth certificates, Aadhaar or PAN numbers, college diplomas, and so on. But what if these vital documents could be represented by NFTs and kept with you for the rest of your life? As a result, get ready to enter the crypto space’s next-generation solution: soulbound tokens.
Vitalik Buterin, the co-founder of Ethereum, recently co-wrote a roughly 40-page article detailing how Ethereum’s future will now focus on a Decentralized Society ecosystem. And soulbound tokens are the most important component of this hypothetical future. Here’s everything you need to know about this cutting-edge technology.
What are soulbound tokens?
Buterin said in the bulletin that soulbound tokens are also non-fungible tokens (NFTs, which a person can earn based in part on their career and school history. They are non-transferable, unlike conventional NFTs (though people can revoke them if they choose.) SBTs would serve as a form of “extended resume” for a person’s reputation and accomplishments.
How can soulbound tokens help in real life?
To put it another way, these are similar to how we communicate information about ourselves on our resumes. However, in this instance, one Soul can issue or attest to the existence of other Souls. As an example, a corporation can present an employee with a reference letter as SBT. As a result, when colleges begin awarding degrees as SBTs and employers begin issuing SBTs to employees, scammers will find it more difficult to mimic them.
Buterin added that the concept is to strengthen people’s social identities by personalizing them with one-of-a-kind, non-exchangeable badges. “The tokens might theoretically help tackle some of the problems plaguing decentralized finance, such as fraud and theft,” Buterin added.
What happens if we lose Soulbound tokens?
Soul wallets will be used to hold SBTs. As a result, if you misplace the key to your soul address, you can quickly reclaim it. If you misplace the key, a Soul will need the permission of a member of the Soul community to recover it.
Users can appoint a group of “guardians” to whom they can delegate the authority to modify the keys to their soul wallet. These guardians could be close friends, family members, trustworthy institutions, and so on. According to the bulletin, these guardians might validate the owner of the soul address through dialogue, a face-to-face meeting, or a variety of other techniques.
When will soulbound tokens be available?
By the end of the year, the SBTs should be available for early use on the Ethereum network. All of this is part of his bigger goal of establishing a “decentralized society” by 2024.