Vitalik Buterin: NFTs can be a social good, not just a casino for rich celebrities

Vitalik Buterin: NFTs can be a social good, not just a casino for rich celebrities

Ethereum co-creator Vitalik Buterin believes NFTs can be applied to socially relevant causes such as charities and funding public goods, but not while the technology is still viewed as a “casino that largely benefits already-wealthy celebrities.”

The author of the Ethereum whitepaper said there was little social value in helping celebrities like Elon Musk add another $1 million to their bank balance by selling NFTs. But he does believe that with support and coordination, non-fungible tokens could have a significant impact on other areas of society.

Our top trading bots

In a blog post titled “The Most Important Scarce Resource is Legitimacy,” Buterin said public attention and resources are often allocated to whatever most people perceive to have legitimacy — a game theory term which he defines as:

“A pattern of higher-order acceptance. An outcome in some social context is legitimate if the people in that social context broadly accept and play their part in enacting that outcome, and each individual person does so because they expect everyone else to do the same.”

In short, people act in a coordinated fashion if they perceive that everyone else will do the same, and especially if it benefits them personally. The NFT market, which has seen half a billion dollars in volume in the last few months alone, is also swayed by the ever-changing forces of mass public perception.

“Which NFTs people find attractive to buy, and which ones they do not, is a question of legitimacy,” said Buterin.

“If everyone agrees that one NFT is interesting and another NFT is lame, then people will strongly prefer buying the first, because it would have both higher value for bragging rights and personal pride in holding it, and because it could be resold for more because everyone else is thinking in the same way,” he added.

The influence and pull exacted by celebrities such as Elon Musk is potentially enormous. The Tesla CEO has been credited with moving the Bitcoin (BTC) and wider cryptocurrency market on numerous occasions, both positively and negatively. The attention brought to NFTs by Twitter CEO Jack Dorsey was commendable, said Buterin, referring to the social media chief’s decision to auction off his “first tweet” NFT to charity for $2.9 million.

But, if the focus remains on such people then the potential for NFTs to have any real social impact could be lost, claims Ethereum’s co-founder:

“But they could also be a missed opportunity: there is little social value in helping Elon Musk earn yet another $1 million by selling his tweet when, as far as we can tell, the money is just going to himself (and, to his credit, he eventually decided not to sell). If NFTs simply become a casino that largely benefits already-wealthy celebrities, that would be a far less interesting outcome.”

Buterin suggested two potential ways to help make NFTs more “legitimate” as a method of acting as a funding mechanism for causes which in some way promoted a social good.

Buterin said a decentralized autonomous organization could be set up which, with the collective approval of its decentralized governance community, would “sanction” certain NFTs if it was guaranteed that a portion of the sales revenue would be passed on to charitable causes.

Another way would be to work with social media platforms to integrate NFT displays into users’ profiles, allowing them to show off the thing they invested their money into. In combination with the first idea, wrote Buterin, this approach could work to “nudge users toward NFTs that contribute to valuable social causes.”

Keep reading upon Cointelegraph
Vitalik Buterin talks crypto’s perils in Time Magazine interview
Ethereum co-founder Vitalik Buterin graced the front page of Time Magazine this month after he was interviewed by the publication about the potential perils...
What is Solana (SOL) Pay, and how does it work?
PayPal was a massive innovation in the payments processing industry. The financial brainchild of Peter Thiel, Max Levchin and eventually, Elon Musk aimed...
Front-running, flash bots and keeping things fair in the crypto market
Decentralized finance (DeFi) has the opportunity to democratize access to financial markets that have typically only been open to the rich and powerful....
Here are the BTC price levels to watch with Bitcoin ‘hanging on $40K cliff’
Bitcoin (BTC) saw its first major test of $40,000 for several weeks overnight, but what price zones are traders watching next?Whether long or short-term,...
Ethereum price holds above $3K but network data suggests bulls may get trapped
When analyzing Ether's (ETH) price chart, one could conclude that the 3-month long bearish trend has been broken for a few reasons. The current $3,100 price...
Rise of Web3: Metaverse tokens surge as Meta’s share price plunges
Meta Platforms, the parent company of Facebook, saw the largest single-day slide in market value for a U.S. company ever with a 26% fall in share prices...
Polygon (MATIC) sees a strong oversold bounce after $250B crypto market rebound
Polygon (MATIC) emerged as one of the best performers among high-ranking cryptocurrencies on Jan. 26 as the price rose nearly 17% to reach an intraday high...
White paper introducing Jack Dorsey's decentralized Bitcoin exchange published on Friday
Jack Dorsey, co-founder, and CEO of both Square and Twitter, released a white paper Friday detailing plans for Square's decentralized Bitcoin (BTC) exchange...
NYDIG acquires Bitcoin micropayments firm Bottlepay
Bitcoin (BTC) investment firm New York Digital Investment Group, or NYDIG, has announced the acquisition of United Kingdom-based micropayment service Bottlepay...
Kusama network set to launch its next five parachain auctions
Kusama is a platform that acts as a test environment, or a so-called “canary network,” for developers to experiment and determine the efficiency of their...
A multichain approach is the future of the blockchain industry
The blockchain industry market size was estimated by some to reach more than $21 billion by 2025. The market capitalization of the cryptocurrency market...
The radical need for updating blockchain security protocols
Decentralized finance (DeFi) is here to stay with over $100 billion in total value locked (TVL), highlighting the evidence of faith in these new financial...
Crypto company CEO says the recent crypto boom brought increased adoption
Cryptocurrency has gone through a number of bull and bear cycles since the industry’s inception in 2009. While 2017 saw the crypto industry boom around...
Ethereum price moves toward new highs even as pro traders turn bearish
The price of Ether (ETH) fell by 19.6% on April 18, resulting in the quick liquidation of $1 billion in long futures contracts. Despite the size of this...
Iran Recognizes Mining, Thinks About National Crypto Amid US Sanctions
Iran has approved the production of cyber-assets is an industry. The position of the country’s government has been expressed by the state’s Secretary of...