Soulbound Tokens: The Key to Securing Digital Identity on the Blockchain

2021 saw the rise of non-fungible tokens (NFTs), which revolutionized

how we prove the authenticity and ownership of assets. While NFTs are

invaluable in this regard, their characteristics are not always conducive to

creating a virtual identity. When it comes to digitizing an individual's or

entity's identity, we need a technology that can securely record our

information on the blockchain in a non-transferrable manner.

This is where Soulbound Tokens, or SBTs, come in. It was only a few

months ago that Ethereum co-founder Vitalik Buterin, Puja Ohlhaver, and

E. Glen Weyl introduced the concept of SBTs in an article titled

"Decentralized Society with Soulbound Tokens."

What are Soulbound Tokens?

SBTs are non-fungible tokens that publicly verify and securely store an

individual's identification, affiliation, and commitment information on the

blockchain. In simple terms, they are non-transferable NFTs.

Characteristics and Applications

SBTs are a new blockchain application that consolidates an individual's or

entity's information into a token to ensure their reputation. Unlike NFTs,

SBTs cannot be transferred from one wallet to another. They are

permanently linked to a unique wallet, known as the soul.

This feature makes them ideal for use in industries such as banking,

education, and business, where credibility is paramount.

In banking, SBTs can be used to automatically assess an account's

creditworthiness, and speeding up loan approvals.

In education, diplomas can be transformed into SBTs, eliminating

authentication issues.

In the professional realm, work certificates can be transformed into SBTs to

reinforce their credibility.

Moreover, they can extend to other industries, such as insurance and

beyond.

SBTs vs NFTs

The main difference between SBTs and NFTs is their transferability. While

NFTs can be transferred between wallets, SBTs cannot. Also, SBTs have no

monetary value and serve primarily to ensure an individual's or asset's

reputation, while NFTs serve to guarantee the authenticity and ownership

of assets.

Securing the Future of Digital Identity on the Blockchain

As we continue to digitize our lives, it's becoming increasingly important to

protect our identities and ensure their credibility. SBTs offer a solution that

allows individuals and entities to consolidate their information into one

secure token that cannot be transferred or tampered with. This provides a

level of trust and security that was previously unattainable.

In conclusion, SBTs are poised to become a game-changer in the world of

identity verification on the blockchain. As this technology continues to

evolve, we can expect to see even more innovative uses for SBTs in the

future, particularly in the banking, education, and professional industries.

Written by Tadum Stéphane