Soulbound Tokens and Digital Identity

What is a Soulbound Token?

It is a non-transferable blockchain identity token.

But what is Soulbound Token on a deeper level?

Soulbound Tokens (SBTs) are non-transferable digital assets that serve to represent a person’s identity, accomplishments, and reputation in a decentralised Web3 ecosystem.

These token, introduced by Ethereum co-founder Vitalik Buterin, are tied to a specific individual and cannot be sold or transferred, making them perfect for confirming personal credentials, connections, or accomplishments in a blockchain setting.

Can Soulbound Tokens (SBTs) Shape Digital Identity?

Soulbound Tokens (SBTs) are linked to a person’s blockchain identity, known as their “Soul”.

A “Soul” is a one-of-a-kind wallet that contains SBTs representing work history, education, and health records.

These tokens cannot be transferred or sold, making them permanent and unique to each individual. Each soul helps develop a verifiable, trusted reputation in decentralised systems by storing achievements.

SBTs vs NFTs: What Sets Them Apart and Why Does It Matter?

Soulbound Tokens (SBTs) and Non-Fungible Tokens (NFTs) both utilize blockchain technology, yet they fulfill distinct functions. NFTs are transferable assets that demonstrate ownership of exclusive items such as artwork or virtual real estate. They can be purchased, sold, or exchanged, with their value determined by scarcity and demand, centering on ownership and origin.

On the other hand, SBTs symbolizes personal identity, credentials, or accomplishments. They cannot be traded or sold, making them well-suited for validating qualifications or experiences. SBTs do not possess monetary value but provide a reliable means to establish reputation and trust, highlighting identity and non-financial characteristics, in contrast to NFTs that focus on ownership and value exchange.

To sum up, Soulbound Tokens (SBTs) remain a conceptual idea put forth by Ethereum co-founder Vitalik Buterin. They have not been widely adopted or put into practice as of now. Despite garnering attention within the blockchain and Web3 sectors, their advancement is still emerging. Ongoing conversations revolve around their possible applications for identity and reputation in decentralized frameworks.

Soulbound Tokens and Digital Identity was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.