Ethereum creator Vitalik Buterin believes that NFT can be used to solve socially significant problems such as charity and public goods funding. According to him, unique tokens are “not only a casino created for the enrichment of already rich celebrities,” although so far a new trend in the world of cryptocurrencies has acquired just such a reputation.
NFT tokens are the main trend of the beginning of 2021, which we analyzed in detail in a separate article. The essence of the phenomenon is to assign a token from the blockchain to a certain object – real or virtual. Thus, a person can be convinced of the uniqueness of the object and, if necessary, prove to the rest of the fact of possession of it.
Since blockchains of large projects like Ethereum are immutable, everyone’s information and property rights are reliably protected. It is the combination of these features that has made NFT a mainstream phenomenon. For example, on the eve of the sale of NFT-tokens with the covers of their own magazine, TIME representatives launched. Thanks to this, journalists will receive both PR and additional income.
Interest in the topic of blockchain art reached a new level when a painting by the artist under the pseudonym Beeple was sold at Christie’s yesterday in the form of an NFT token for more than $ 69 million.
Of these, artist Mike Winklemann received 53 million in Ethereum after tax. However, in the end, he instantly sold the crypto and converted ETH into dollars. The NFT industry is currently in a bubble, he said.
Although Vitalik Buterin believes that the situation may change.
Why are NFTs needed
On his blog, Buterin posted a new post entitled «The Most Important Scarce Resource Is Legitimacy.» He believes that public attention and resources are often allocated to what most people consider legitimate. It is a game theory term that he defines as follows.
Higher order acceptance pattern. An outcome in some social context is legitimate if people in that social context generally accept and play their part in accepting that outcome, and each person does so because he expects everyone else to do the same.
Vitalik Buterin
In other words, people act in a coordinated manner if they understand that everyone else will do the same – and especially if it is of personal benefit to them.
The NFT market, which totaled half a billion dollars in the past few months alone , is also influenced by the ever-changing forces of popular opinion. Here is Buterin’s line quoted by Cointelegraph.
Which NFTs people find attractive to buy and which are not is a matter of legitimacy. If everyone agrees that one NFT is interesting and the other is not, then people will strongly choose to buy the first one because it will have a higher value both in terms of the right to “brag” and in terms of personal pride in its ownership. … And also because it can be resold at a higher price, because everyone else thinks the same.
Most popular NFT tokens
However, now it is important not to lose sight of the huge potential of the trend of unique tokens, which can bring much more benefits in different social spheres. The developer continues.
You can help Elon Musk make another million dollars by selling his tweet, but that will do little for society. If NFTs simply turned into a casino that largely benefits already rich celebrities, the trend would be less interesting.
Note that you can also sell tweets for the good stuff. In particular, this was done by the co-founder of Twitter, Jack Dorsey, who the day before sold his first tweet for the equivalent of $ 2.9 million – and he did it in the form of an NFT token. As a result, the entrepreneur sent the proceeds to charity.
Buterin proposed two possible ways to make NFTs more «legitimate». For example, a decentralized autonomous organization may be created that, with the collective approval of its community, will “authorize” certain NFTs. This is true if there is a guarantee that part of the proceeds from sales will be donated to charity.
Another way is to work with social media platforms to integrate NFTs into user profiles, allowing them to showcase what they have invested their money in. Buterin believes that when combined with the first idea, this approach could work to «push users towards NFTs that contribute to important social areas.»
We believe that the hype around the NFT token industry will not end with the sale of various works. This niche, thanks to the use of blockchain, is changing the concept of digital property rights, and this will come in handy in other industries like gaming. So for now, criticism of the topic should be postponed – it is still too young.
