If you're reading this article you've surely heard about NFTs - non-fungible tokens. And while NFTs are all that everyone in the art community and beyond is talking about, there are other things in life that are just as irreplaceable. For example: birth certificate, university degree, driver's license, etc. What if these important and personal documents were represented by blockchain technology and NFTs? And at the same time were directly linked to your life?
The answer is in this article, so get ready to learn about the new solution in the crypto space and the cornerstone of a decentralized society: Soul Bound Tokens (SBTs).
What is SBT?
SBTs are NFTs that act as achievement badges for people in real life, like the badges we earn in video games when completing a task or passing a certain level. But instead of getting these badges to unlock the next levels in a game, in real life anyone can earn them based on actual facts, such as their job, educational history and personal information.
Or, as Ethereum founder Vitalik Buterin envisions it, it can serve as a way to prove a person's social identity, educational history, and their acquired skills that are backed by a certificate from a competent authority.
Unlike regular NFTs, soul bound tokens are non-transferable. In other words, SBTs represent a person's professional reputation and accomplishments, and are somewhat an extended, distinct version of a resume.
How can you benefit from SBTs?
Quite simply, SBTs are very similar to what we do when we share information about ourselves on our CVs. Your SBT is essentially your CV on the blockchain. But the difference with SBTs lies in the two-party authentication, where one soul can be issued or authenticated by other souls.
For example, a person can claim to have gone to King Fahd University of Petroleum and Minerals (KFUPM) by adding the name of the university to their LinkedIn profile. But with SBTs, KFUPM itself has to give your "soul" a certificate in SBT format so that you can submit a graduation claim from it on your online platforms and CV. Therefore, SBTs will make it impossible for people to fake any college or professional degree as well as tackle some of the major problems plaguing Decentralized Finance (DeFi) such as scams and theft.
Potential and promising use cases of SBTs
1- NFT Art NFT artists can connect their assets and art collections to their “souls,” ensuring that they and NFT collectors identify and preserve their unique assets and thus eliminate copycats in the NFT space who sell random NFT collections in the name of famous artists and steal their efforts for profit.
2- Certificates and documents SBTs can also play a fundamental role in the future of certification. Soul bound tokens have the potential to change the path of documentation from paper to digitization by transforming it into the digital network with the help of blockchain technology. For example: Institutions and universities can use SBTs to award degree certificates to graduate or undergraduate students.
3- Proof of attendance and ticket issuance SBTs can be used as proof of attendance at a specific event, university lectures, seminars, etc. In addition to the mechanism of issuing tickets for special events or workshops and conferences, also, enabling event organizers or hosts to control crowds and attendees as they like and as it serves their personal purpose of the event by issuing tickets in the form of SBTs to selected people only.
4- Digital CV SBTs can reflect your skill set, abilities, activities, and accomplishments in the real world once you add them to your Soul. Universities can issue degrees as SBTs, and employers can start offering employment letters as SBTs. So perhaps, in the future, SBTs could emerge as a digital portfolio or CV for Web 3.0
5- Ownership of real estate People who rent or buy a property may be given a soul bound token in their soul (SBT) as a secure and binding proof of rent or ownership. This step will take the real estate sector to a new stage of authentication and security processes for all parties.
It seems like soul bound tokens are the talk of everyone right now in the cryptocurrency industry and web3 technology scene. As we shared with you in this blog, there are many use cases, especially in finance, which can offer new possibilities for users, investors and projects from all over the world. With the advent of Decentralized Finance (DeFi) over the past few years, SBTs can act as a catalyst to unlock the potential of Web3 to revolutionize every aspect of human existence.