NFTs main features are their transferability and commercial viability, but there are also some drawbacks, according to Buterin.
Vitalik Buterin, the creator of Ethereum, has suggested a new concept for NFTs, governance, and a spectrum of other non-transferable, decentralized solutions. The idea for the concept comes from the famous MMORPG game, World of Warcraft, of which Butelin is reportedly a big fan.
In a blog post published on Wednesday, Buterin expressed his desire to create non-fungible tokens (NFTs) that are soul-bound to the item class of the same name in World of Warcraft, which he calls “Named article class”. For example, if someone owns an NFT that he or she can make available to others by executing X, such as by attending an auction, it is impossible to determine whether they actually attended the auction or simply bought it second-hand from someone else.
The “soulbound” feature in WoW prevents anyone from trading, mailing, or selling an item to other players in the Auction House game. It was designed by the developers to prevent “twinking” from high-level characters to low-level ones, in order to drastically speed up the grinding process of fighting monsters to gain experience.
However, they help to show achievement, meaning that the character has earned the item by defeating challenging bosses, and not through a relic. The latter property seems to be of interest to Buterin, as the Ethereum co-founder raised that on-chain proposals to store driver’s licenses, college degrees, etc., would face problems if someone who doesn’t meet the necessary conditions can easily acquire them.
Buterin also referred to the POAP “proof of attendance protocol” project, which stores digital memories of a person’s life on-chain and issues a unique badge backed by a cryptographic record. The team behind the project encourages developers who care about portability to check “on the chain if the current owner is the same address as the original owner.” But like soul items in WoW, removing the transferability of NFTs would also presumably remove their commercial viability.
A POAP can reflect actual participation in something in a similar way to how soulbound items work in World of Warcraft, which is a testament to participation in multiple events. Investors cannot buy or sell these items later.
Buterin also suggests that NFTs act as a reflection of one’s wealth rather than the ability to acquire a specific NFT. The creators of Ethereum argue that most of the unusual products that appear on the market can actually be used for good causes, such as collectibles that support charities once someone buys them on the secondary market.
Antonio Gonzalo, co-founder of Ethereum Madrid, believes that compared to Bitcoin, Ethereum is better money. “The promise of Ethereum is greater. He talks about the evolution of money, about better money as a product. This constantly iterating system makes it possible to find a cross between product and market that gives better money. Looking at the last 5 years, I would say that the applications that are finding it are the ones that are using ETH for the financial world (DeFi).”
Perhaps the greatest success of Ethereum since its creation has been putting into practice the decentralized heart of Bitcoin. It has become the largest programmable money blockchain in the world and the chosen place to build the new financial industry. Anyone with software knowledge can build applications on top of it. It makes it possible to tokenize any valuable object on its network. From a house, a work of art, an action, work hours, a car, or Reddit rewards for its users.
While Buterin’s proposal and concept sounds refreshing, it is not clear what the difference is between selling NFTs or private keys to a wallet with non-transferable tokens.
By Audy Castaneda
