An Introduction to Soulbound Tokens
Learn how Soulbound Tokens (SBT) are changing the way we store personal info and how they are revolutionizing the way we enjoy exclusive benefits.
NFTs made a big splash in the crypto market in recent years. This surge in popularity and value sparked a trend in the crypto and traditional art world, leading to the establishment of NFTs as a new asset class on a busy crypto market.
But what if we told you that there's something even more revolutionary on the horizon: Soulbound Tokens (SBTs).
In May 2022, a group of experts known as DeSoc (Decentralized Society) published a whitepaper on a new type of token called Soulbound Tokens. In this article, we'll take a closer look at what SBTs are and how they could change the way we think about digital identity.
What are Soulbound Tokens?
Think of SBTs as the opposite of NFTs. While you can buy, sell, and send NFTs, SBTs are non-transferable and can only be issued by a Soul account. In other words, if you want an SBT, someone else must give it to you.
The idea behind SBTs is to create a secure and immutable record of important information, such as education degrees, medical records, job histories, and more. Unlike traditional records, SBTs cannot be altered or falsified, providing a trustworthy source of information in a digital world.
Uses of Soulbound Tokens
The possibilities for SBTs are almost endless, but here are a few examples of how they could be used in the future:
- Education degrees: Imagine having a Soul account that verifies your diploma from a reputable university.
- Certificates: After completing a course, you would receive an SBT instead of a paper certificate. This could also apply to driver's licenses, ID cards, and more.
- Medical records: No more transferring medical records from doctor to doctor. Your medical information would be stored in a secure Soul account.
- Job records: A digital resume with confirmed job histories from past employers.
- Much more: The use cases for SBTs are limited only by our imagination.
Drawback to SBTs
However, like with everything in life, there's also a flip side. Bad actors could use SBTs to identify, harm, and target members of specific communities. And the thought of governing bodies misusing SBTs is frightening. For example, they could deny you access to certain facilities, revoke your voting rights, refuse medical care, or even restrict your travel.
The authors of the paper discuss this dark possibility and write that a database of SBTs could be used to discriminate against certain social groups, target them for cyber or physical attacks, enforce migration policies, or even make predatory loans.
That's why it's important for users to have the option to discard or hide their SBTs if needed. It's all about striking a balance between the benefits and risks of SBTs.
What happens if you lose your Soul account?
The solution to this issue is what's called social recovery. You can choose trusted individuals or organizations to act as guardians of your Soul account. If your account is stolen, these entities can recover it for you. However, if the guardians are no longer available, your account could be lost.
The Future of Digital Identity
The concept of SBTs is still in its early stages, with no technical details specified yet. Masa Finance has launched the first soulbound identity protocol for the Ethereum mainnet in the half of January, 2023.
Will SBTs become the new trend in digital identity? Only time will tell. But there's no denying the potential for this technology to change the way we think about personal information in the digital world.
In conclusion, if you're curious about SBTs, be sure to read the Decentralized Society whitepaper. And who knows, you might just be a part of the future of digital identity.
Can Soulbound tokens be transferred?
No, Soulbound tokens are non-transferable based on its definiton.
Where can you buy Soulbound tokens?
SBTs differ from other crypto assets as they can't be bought or sold on a marketplace. They come with purchases of goods/services but can never be owned in another user's wallet.