NFTs can be a social commodity, not just a wealthy celebrity casino

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Ethereum co-creator Vitalik Buterin believes NFTs can be used for socially relevant purposes such as charities and funding public goods, but not as long as the technology is still viewed as a “casino largely benefiting already wealthy celebrities.”

The author of the Etherpaper whitepaper said there was little social value in helping celebrities like Elon Musk raise an additional million dollars in bank balance by selling NFTs. However, he believes that with support and coordination, non-fungible tokens could have a significant impact on other areas of society.

In a blog post titled “The Most Important Scarce Resource Is Legitimacy,” Buterin said that public attention and resources are often allocated to what most people consider legitimate – a game theory term he defines as:

“A pattern of higher order acceptance. An outcome in a particular social context is legitimate if people in that social context largely accept and contribute to that outcome, and each and every person does so because they expect everyone else to do the same. “

In short, people act in a coordinated manner when they realize that everyone else is doing the same, and especially when it benefits them personally. The NFT market, which has been worth half a billion dollars in the last few months alone, is also being influenced by the ever-changing forces of public mass perception.

“Which NFTs are attractive to buy and which are not is a matter of legitimacy,” said Buterin.

“When everyone agrees that one NFT is interesting and another is lame, people will prefer to buy the first because it has both greater value for bragging rights and a personal pride in holding it and because it could be resold for more, because everyone else thinks the same, ”he added.

The influence and attraction of celebrities like Elon Musk is potentially enormous. The Tesla CEO has been credited with the positive and negative movement of Bitcoin (BTC) and the broader market for cryptocurrencies on several occasions. The attention Twitter CEO Jack Dorsey has drawn to NFTs is commendable, said Buterin, referring to the social media chief’s decision to donate his “first tweet” NTT to charity for $ 2.9 million auction.

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

“But they could also be a missed opportunity: There is little social value in helping Elon Musk make another million dollars selling his tweet when the money, as far as we can tell, is only to himself (and to his credit goes, he finally decided not to sell). If NFTs simply became a casino that already wealthy celebrities largely benefit from, it would be a far less interesting outcome. “

Buterin suggested two possible ways to make NFTs “more legitimate” as a funding mechanism for purposes that in some way promote a social good.

Buterin said a decentralized autonomous organization could be set up that, with the collective consent of its decentralized governance community, would “sanction” certain NFTs if guaranteed that a portion of the sales proceeds would be passed on to charity.

Another option would be to work with social media platforms to incorporate NFT displays into user profiles so that they can show what they have invested their money in. Combined with the first idea, Buterin wrote, this approach could help “drive users to NFTs that contribute to valuable social causes”.