Non-Fungible Token (NFT) There are many use cases blockchain, both real and imagined, a very new and controversial idea is that they work very well for identities on blockchain. By creating an identity system that associates people with people, you can unlock internet citizenship and financial services that were otherwise impossible. However, using NFTs to identify crypto wallet owners is a highly controversial idea, and for good reason.
Blockchain wallets are “pseudonyms”. In other words, it is only anonymous unless the user’s real-world identity is connected to the wallet, but once the user’s identity is discovered (whether intentionally or not), it cannot be disconnected. One of the kana issues is that Decentralized applications, also known as “dApps” There is no way to prove a user’s uniqueness, and it must be designed with the lack of complete trust between the user and the application in mind. Decentralized Finance (“DeFi”) Applications We get around this problem by requiring users to deposit one cryptocurrency as collateral before borrowing another. This severely limits borrowing capabilities for users who do not own many on-chain assets. The inability to connect crypto wallets to an individual’s unique real-world identity limits the services that can be provided on-chain and hinders the formation of an internet-based society.
In May 2022, Ethereum co-founder Vitalik Buterin and several colleagues published a paper. SSRN title”Decentralized Society: Finding the Soul of Web3“He discussed his next idea.”soul bound token,” Also “SBT.The name comes from the popular MMORPG game World of Warcraft. In this game, in-game non-tradable items are “soulbound” to the user’s character. Easy to change. NFT blockchain smart contract It’s time for SBT. SBTs are issued by companies, governments or blockchain protocols and use real-world identity documents or other trusted sources to prove a user’s identity. No one can get more than one SBT. Therefore, a crypto wallet holding SBT is a unique user, safe to assign credit history and enter into legal agreements.
innovative but controversial
The problem with SBT is that it is considered highly controversial among the cryptocurrency community. Identifying and registering crypto wallet addresses is a sensitive topic for those who wish to maintain anonymity on-chain and transact privately. Given Web3’s privacy concerns and how easy it is to track and trace transactions, this concern is justified. however, NFT domain for crypto wallets who posts with NFT and crypto wallet address to social mediait is clear that many people do not care about their privacy or are unaware of how they are exposed on the blockchain.
Once privacy issues are resolved, SBT will unlock new forms of DeFi, blockchain games, business applications, governance systems, and more. Financial credit scoring becomes possible, loans can be taken out without collateral deposits, Decentralized Autonomous Organization (DAO) Increased resilience to governance attacks and the possibility of automatically verifying social media accounts. The entire decentralized society on-chain (or “DeSocIf the government adopts SBT, it will transfer citizens’ records to the blockchain, reduce energy costs for maintaining databases, greatly improve the time it takes to retrieve and update records, and eliminate fake identities. There is a possibility.
Identity on blockchain is a controversial topic, but it is also necessary for further progress. Web3 privacy issues and safety These issues are legitimate concerns that need to be addressed before implementing real-world identities, but if they are resolved, identity solutions can reduce waste, fraud, and storage costs for governments and businesses. can be reduced.Additionally, the idea of internet citizenship could finally emerge, eliminating fake accounts and holding people accountable for what they do online. blockchain Using an identity solution can bring many benefits, but it can also lead to a dystopian nightmare if you’re not careful how you use it.