There is nothing wrong with NFTs being undervalued, as they tend to promote excessive capitalization, harm the environment, and they overwhelmingly originate from centralized entities that often inflate their value, etc. Yet billions of dollars are invested in the technology every year. While many of the ideas emerging today are outlandish, real use cases may emerge in the near future. When we put enough money and people into an idea, it has the potential to become a reality.
The future of NFTs is still healthy, as we’ve (eventually) gotten past the worthless monkey JPG. A few months ago, the creators of Ethereum did this by co-publishing a white paper on “soul-bound NFTs.” Here are my key conclusions from my 35-page study.
Problems with NFTs
Today, the most realistic use case for NFTs is in the realm of community building. This technology can help companies, sports teams and artists interact with their communities.
Football tickets are a simple example. Fans can receive a signed jersey if they use a unique, activated token to prove they attended every game played by the team that year.
The problem, however, is that the vast majority of NFTs today are a) transferable and b) irrevocable. This means that identification and active member authentication cannot be guaranteed, making communities that rely on NFTs worthless.
In fact, we live in a society and are connected in a thousand different, non-transactional ways, so our technology needs to reflect that. The emergence of Web3 is mainly because people lack social connection. To achieve widespread adoption, it needs to strengthen these connections, not weaken them. One of the key challenges of the 21st century will be to ensure that we manage to solve this problem.
This is where soul-bound NFTs come in.
Solution: “Soul-bound NFTs”
The name comes from Warcraft legends, but the resemblance ends there. This particular type of NFT will be non-transferable and will create an on-chain/digital proof of our social relationship. We can think of it as a crypto wallet filled with unique tokens representing companies you have worked for, trade shows you have attended, schools you have attended.
It serves two purposes. First, it will aggregate the specific social elements that make us unique online (kind of like Facebook in the early days, but verifiable/traceable). Second, the “wallet” will highlight and categorize the social connections between entities and people, creating a spider web that supports a variety of use cases.
It embodies the identity theory put forward by the 20th century sociologist Georg Simmel, that individuality emerges from the intersection of social groups, just as social groups emerge as the intersection of individuals.
Continuing with our example of football fans. The tokens he accumulates represent the games he has played to show that he loves football. But this is more one-dimensional. If we add the colleges he attended, the jobs he has done, the shelters he has volunteered for, the supermarket membership card he bought…you will see a three-dimensional person appear. Relevance and network effects are very powerful forces here.
It may sound dystopian, but assessing the social environment is a natural thing we do every day. You’re more likely to listen to the violin in a concert hall than in the subway. A good brand name on your resume will make job hunting easier. Good clothes often make a person look more trustworthy. The list goes on. We can reproduce this natural behavior online and improve it.
Towards a Decentralized Society
The concept of “soul binding” opens up a whole new world of social organization.
Reduce online operations
In an environment like today’s, it’s hard to see if a decentralized project is a scam. We can now imagine a world where every participant’s wallet is accessible on the blockchain, showing not only which entity vouched for that person, but also the social value of those entities, how many people are connected to them , and the credibility of these people. This traceable social network will greatly increase trust and reduce the risk of falling into a scam.
This technology can also eliminate a lot of online/web3 “cheating”. A system can be built to ensure that only socially “rich” or “reputable” wallets can participate in the project, ensuring that no one can create many wallets to influence the governance of a decentralized project.
Improve social relationships
The above is not to say that people from less prominent social backgrounds should be excluded. Access to deep data on social and real world connections ensures that we prioritize access to those most urgent assets/programs.
There is a severe lack of social contextualization in some parts of society. Public wallets can help identify very specific social groups and connect them more closely with the rest of the world.
more and more diverse
Soul-bound NFTs also ensure that highly correlated wallets are given less voting power when decisions are made online, ensuring we have true diversity. This solves a huge real-world problem: decision makers are often very socially relevant.
Collaboration occurs even between people who do not know each other, underscoring the need to create entirely new paradigms. Using Soulbound NFTs means we can give each project a score and reward diversity based on how decentralized each project actually is.
make smarter decisions
Today, loans carry out a thorough scrutiny of personal finances. However, buying insurance requires reviewing every part of one’s life (where you live, who you interact with, where you work, your habits…). Why doesn’t this apply to loans as well? The strength of a person’s character is not limited to their income, we know that many people just need a chance.
Soulbound tokens can provide a useful way to review a person’s loan request. It also applies to renting, adopting pets, and more.
Find a community
Soulbound tokens and the wallets in which they reside are inherently transparent and accessible to all. This means we can more easily find people who are similar to us in some ways but very different in others.
This model exists today on Reddit and Facebook, but the community is slowly dying under the weight of algorithms due to being heavily financialized.
It’s easy to get excited about new technology. But, like all things, soul-bound NFTs can have a very dark side if we’re not careful. As the authors of Soulbound put it, “there are a lot of dystopian problems, but at least they are transparent”, but that’s not enough.
Create a social credit score
When it comes to social credit scores, be careful not to abuse them to avoid potential risks.
Furthermore, we need to ensure that there is no penalty for those who opt out of the system for ethical reasons.
loss of privacy
Crypto wallets should be traceable, auditable and anonymous. We cannot use very personal information to disrupt the world. That is, we need to test the technology with information that we are already willing to disclose.
The idea of programmable privacy through zero-knowledge proofs is also a very powerful concept. Use this concept to prove you’re 18 without revealing your birthday. However, achieving this at scale is very difficult from a technical standpoint.
The “soul-bound wallet” is definitely key to the everyday life I describe in this post. But, as anyone knows, it’s easy to lose your wallet and even easier to forget your password. There is actually an elegant social solution: social restoration. The main idea is to have someone who knows you vouch for you with a “vote of confidence”. If 50% of people think you are who you are, you can re-use your wallet.
But people lose touch, die, get affected, collude (rarely all at the same time). Therefore, the concept of enabling “community restoration” can be very powerful: a group of Guardians who are socially connected to us through soul-bound NFTs come together and regenerate a private key. This set will be automatically generated by an algorithm to ensure that they connect with us socially, not through each other, making it difficult for them to collude and influence each other.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/viewpoint-soul-bound-nfts-and-decentralized-society/
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