Technology and earnings, not just bitcoin, ethereum and tether: Soulbound tokens (SBTs) are landing on the market.
They are not exactly a cryptocurrency, not actual cyberdollars, but a digital asset, somewhere between a cryptocurrency and an identity in the Metaverse.
SBTs are the future of finance, the evolution of the cyber economy as we know it. Recently born and still very uncertain in development, Soulbound tokens have been in the news for a few weeks now for the appreciation expressed by Vitalik Buterin, founder of Ethereum
In a Jan. 26 social post, Buterin opened up about a new type of NFT, which is no longer exchangeable and entirely non-transferable.
At the moment, the only financial product that meets these needs are SBTs, i.e., non-transferable soulbound tokens.
But what is the purpose of a non-tradable token? What is the difference between NFTs and SBTs? Is it possible to make money with soulbound tokens? And is privacy respected?
Let’s see together what soulbound tokens are, why to use them, and how to profit from them.
What are Soulbound tokens?
Soulbound tokens, known by the acronym SBTs, are the latest generation of tokens that belong to the class of NFTs, or non-fungible tokens.
These are non-fungible, non-transferable, non-marketable products that correspond to a digital property accompanied by a unique possession code.
The name takes its cue from the very famous video game World of Warcraft within which a locked class of items, which cannot be shared with other players or alienated with players is precisely called soulbound.
In World of Warcraft soulbound items are obtained once particular challenges are overcome and the player gets a soulbound item and it will be forever his or her own, it will make him or her unique, special, different from other players.
This is exactly the philosophy that inspires the world of SBTs.
An item that makes the owner exclusive in his relationship with others.
Whoever owns a soulbound token has a unique property, which cannot be shared, transferred, alienated or trivially sold.
In the world of crypto, SBTs are equivalent to policies, certificates, documents secured by a unique code.
It is the concept of perpetual digital property expressed at the highest level, it is the ownership of certain virtual objects, non-substitutable, non-marketable, assisted by specific guarantees and relating to particular moments in life.
For every occasion, event, anniversary, memorable day there is a specific Soulbound.
Everyone’s collection of SBTs tells their private, personal story and celebrates their achievements, albeit digitally.
So, SBTs can be a Cv, that is, a resume that includes all certified professional experiences but also a scrapbook that summarizes its owner’s seasons.
Why use Soulbound Tokens or SBTs?
We have seen that SBTs are the only tokens that, while not tradable or transferable, have value.
They are digital titles of possession, credentials, certificates, attestations that speak of their owner, singing its praises from a social point of view.
Just like a passport or driver’s license, they are an identification document linked to one and only one digital identity, testifying to its social and professional value.
This is precisely why each token has a unique and unrepeatable code, a token that belongs to the individual and cannot be sold because it cannot fit any other person in the world.
Using Soulbound tokens is especially useful from the perspective of digital relationships: they enrich the cv, build a reputation, and help integrate our identity on the web, a world where being and existing are really impossible feats.
How do Soulbound tokens work?
Soulbound tokens work in a really basic way: once acquired, each of the SBTs will be assigned a unique code that will be tied to the digital identity.
The creation, allocation and dissemination of SBTs is an end-to-end operation, a closed loop.
Only the creators of soulbound tokens can send them to the various souls, i.e., to the addresses of the owners.
Holders of SBTs take them into a perpetual wallet, known just as a Soul, which lasts a lifetime and cannot be forced, sold, transferred either to individuals or in secondary markets.
What is the difference between SBTs and NFTs?
Although soulbound tokens are a type of NFT, albeit of the very latest generation, the basic differences are enormous.
NFT, or non-fungible tokens, are unique yet interchangeable.
They can, in fact, be transferred from one user to another through sale, donation or exchange. They also have an actual monetary quote and are normally held in any standard wallet, provided it is cryptocurrency-specific and supports the NFT system.
In contrast, Soulbound tokens, while NFT, are not transferable, alienable or tradable: whoever holds them will have perpetual ownership.
SBTs are visible at all times, the source can be traced virtually anytime and by anyone, and anyone can verify their provenance and authenticity.
They are stored in a special wallet, a wallet called Soul that cannot be tampered with in any way.
They have no commercial value, or rather there is no objective countervalue since there is no exchange for SBTs.
Soulbound and privacy
Unlike all major cryptocurrencies and any virtual payment system, protected by anonymity and guaranteed in strictest confidentiality, SBTs are explicit.
The digital identity they refer to is known, clear, expressed, and visible.
Indeed, extreme transparency is suggested: SBTs tell the story of their owners, so they must be immediately visible.
There is no privacy issue that holds in the world of SBTs: they certify an experience of their owners so they are designed and structured to be seen by virtually everyone.
Earning with Soulbound tokens
Making money from soulbound tokens is difficult but not impossible: since they are not exchangeable, they cannot be traded or sold outright.
The lack of transferability of SBTs greatly affects their commercial value, which is currently unknown and difficult to interpret.
Owning them represents a good investment on a subjective, personal, emotional level.
They enrich the person who owns them, in some way they describe him as a person and as a professional, they speak of him, his achievements at work, his character, as if they were the stars of a member of the army-the more you have, the more you are worth.
It goes without saying that a digital identity equipped with many SBTs will enjoy greater consideration and therefore also greater credit in the eyes of investors than one that, on the other hand, is lacking or has no soulbound tokens at all.
As for the ability of SBTs to become a possible source of income in the future for those who issue or hold them is debated and will continue to be debated for a long time to come.
There is one certainty: if a visionary like Vitalik Buterin is willing to bet on them, they are to be trusted.
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