The cryptocurrency industry is highly innovative, with novel ideas and services appearing regularly. Characteristics unique to each soul have been imprinted on these identity Soulbound tokens. Since Souls are well-known blockchain account and wallet providers, it has produced a more secure token that cannot be exchanged for other currencies. Soulbound Tokens (SBTs) is an apt moniker given the multiple ways in which the tokens are governed by the issuer.
In the month of May 2022, a novel idea, SBT, was introduced to the crypto industry (Soulbound Tokens). The ETH co-founder Vitalik Buterin, the social technologist and economist E. G. Weyl, and the attorney Puja Ohlhaver presented it.
The associated whitepaper laid the groundwork for a user-run, decentralized society (DeSoc). The significance of SBT in modern culture is also discussed. Like traditional credentials, SBTs can prove one’s identification in a formal setting.
The whitepaper “Decentralized Society: Finding Web3’s Soul” explains everything in detail. The scientific community values the specifics provided in this white paper. As a result of putting these plans into action, SBT was created (Soulbound Tokens).
What is SBTs?
It’s no longer true that blockchain technology is just applicable to digital currencies. It’s had a significant impact on plenty of other disciplines. The finest example of a blockchain project that uses immutable tokens to reflect a person’s identity is Soulbound tokens (SBT). Through this method, we can incorporate data such as medical records, performance records, and other information that can be used to describe an entity or person. These tokens can be stored in or created with “souls,” a special kind of wallet.
We all have more than one side to our personalities, and the same is true for wallets and Souls. Each one can showcase a unique set of data or facet of a person’s existence. A person’s Soul can serve as a digital wallet where they can save their most important information, such as their health data, financial records, and performance records. In a nutshell, each person has the potential for as many Souls as they possess unique characteristics. A Soul can act as a token of one’s identification and is thus authorized to distribute SBTs. As a result, Web3 personas are developed that are unique to each user and their habits and routines.
However, Souls can communicate with a source of SBTs. For example, if we think of corporations as Souls, then each employee who represents the corporation is granted an SBT. It is possible for a computerized country club to issue SBTs as a means of verifying membership.
World of Warcraft, a popular online game, serves as inspiration for soulbound. Once a player makes a choice, that item will always be linked to that character. Soulbound items cannot be sold or traded between players. Soulbound items, once obtained, are permanently “bound” to the player’s “soul.”
Currently, picture this reasoning extended to NFTs. In modern times, most NFTs are possession testaments for high-end craftsmanship or collectibles like yacht clubs like Bored Ape. People who want to project an appearance of success and wealth will buy, trade, and “hotshot” NFTs.
SBTs are an attempt to make the NFT concept into a sign that is both unique and unchangeable, going beyond simple monetary value and bragging rights. SoulBound Tokens focus on the value of a person or thing, as opposed to the value of things in the same way as NFTs do. Additionally, unlike a Non-Fungible Token, SBTs hold no monetary value and cannot be traded once sent to a wallet.
How Does SBTs Work?
It’s true that anyone may claim they attended Harvard by selecting the school as their place of graduation on Facebook. But with SBTs, you can’t offer that success guarantee unless Harvard’s “Soul” (their secret wallet) recognizes your “Soul” (their secret wallet). As such, SBTs can be shared across a community or organization to serve as a means of verifying membership. To guarantee false accreditations would become very impossible.
Since the tokens cannot be sold or moved from one wallet to another, this design, according to Buterin and his co-creators, could help “tackle a fraction of the difficulties desolating decentralized finance, like to trickery and burglary.” Since NFT robberies are becoming increasingly common, this is where they believe the instrument’s true power lies.