What is an SBT?

With SBT’s a new development has appeared within the crypto market that is expected to play a major role in the future.

Let's dive into this topic.

Key points:

• What are SBTs?

• Difference between SBT and NFT?

• What do you use SBTs for?

What are SBT’s?

These unique tokens are called non-transferable non-fungible tokens (NFTs), which in web3 can prove someone's identity and performance. This is also possible with the NFTs we know today, but Soulbound Tokens work in a different way.

Soulbound Tokens are unique tokens, which you cannot transfer. This term comes from the game World of Warcraft (WoW), where objects that could not be transferred are called "soulbound items.

What are NFTs?

It is important to know what NFTs are otherwise we cannot make the comparison.

I just don't need to go too deep into this because most of my community owns more NFTs.

NFTs are tokens on the blockchain, referred to in full as non-fungible tokens. Both an SBT and an NFT are located on the blockchain, making the information transparent and securely locked on the blockchain. An NFT is something unique and therefore not replaceable. This means that an NFT is non-fungible.

Difference between SBT and NFT?

SBT and NFT are fundamentally very similar. The main difference is that an SBT cannot be traded or sold. Whereas with an NFT, as you know, this is possible.

This makes the use case for both tokens completely different. NFTs are digital certificates that prove you are the owner of something, while SBTs store non-transferable data of a particular person.

As a result, SBTs are not focused on trading and investing, but on utility.

What do you use SBTs for?

Reading all this, it seems like Soulbound tokens are not a good investment, and that's right! But it does have plenty of other advantages.

A number of examples where it can apply:

- Achieving a degree or course.
- Medical records
- Archiving memberships
- Social networks such as .frens protocol