Ethereum co-founder Vitalik Buterin believes that non-fungible tokens (NFTs) should solve social problems, and not be seen as a casino that brings money to celebrities.
Buterin is convinced that collectible tokens should be created for charity, funding public goods and other socially significant goals. However, today NFTs are created to tokenize in-game items, paintings or music. According to Buterin, the NFT in the form of a tweet, which was recently put up for sale by Tesla CEO Elon Musk, will not make much difference beyond the addition of another million dollars to Musk’s bank account. Therefore, the Tesla executive refused to sell his tweet, also considering this idea pointless.
At the same time, Buterin said that the initiative of Twitter founder Jack Dorsey to sell his first tweet in the form of NFT is commendable. Dorsey received 1,500 ETH (about $ 2.55 million) for him, and he decided to spend the proceeds on charity. Celebrities have a huge impact on the development of the cryptocurrency industry in general. However, if you focus only on famous people, then NFTs may lose their potential for solving social problems.
“If NFTs are seen as a casino that is profitable for already rich celebrities, the result will be less impressive,” Buterin said.
He is convinced that if you approach this issue more deliberately, then NFTs can have a significant impact on various areas of society. Buterin believes that a term from game theory – “legitimacy” can be applied to non-replaceable tokens.
Public attention and resources are often directed to what most people consider acceptable. In a social context, a result is considered legitimate if people take an active part in achieving it. Everyone has a role to play for this, because everyone else is doing the same. In other words, people act in a coordinated manner if they understand that others will do the same, especially if it benefits them. Buterin explained that the NFT market is also influenced by constantly changing public opinion.
“The question of legitimacy is which NFTs people find attractive to buy and which are not. If everyone agrees that one NFT is interesting and the other ineffective, people will choose to buy the first one because it will have a higher value. They need it for bragging rights, in order to feel proud of owning such a token. People think that it can be resold at a higher price, because everyone else thinks the same way, ”says Buterin.
The Ethereum co-founder proposed two ways to make NFTs more “legitimate” so that they can be used for the public good. First, a decentralized autonomous organization could be created where members could brainstorm certain NFTs whose issuers are willing to donate a portion of the proceeds from the sale of such tokens to charities. Second, social media can be leveraged so that users who have invested in NFT can demonstrate this and tell the world about their investment. According to Buterin, a combination of both of these methods can push people to use NFTs, which have real social value.
Last year, Buterin spoke about another equally popular sector of the cryptocurrency industry – decentralized finance (DeFi). Buterin likened it to the printing of money by central banks and urged not to succumb to the hype around DeFi.
