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

The author of the Ethereum whitepaper said in that location was little social value in helping celebrities like Elon Musk add another $1 1000000 to their bank balance by selling NFTs. But he does believe that with support and coordination, non-fungible tokens could accept a significant affect on other areas of society.

In a blog mail titled "The Most Of import Scarce Resources is Legitimacy," Buterin said public attention and resource are often allocated to whatsoever most people perceive to have legitimacy — a game theory term which he defines every bit:

"A pattern of college-order acceptance. An result in some social context is legitimate if the people in that social context broadly accept and play their office in enacting that outcome, and each individual person does so because they expect anybody else to practice the same."

In brusque, people human activity 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 solitary, is as well swayed by the ever-changing forces of mass public perception.

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

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

The influence and pull exacted past 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 attending brought to NFTs by Twitter CEO Jack Dorsey was commendable, said Buterin, referring to the social media chief'south decision to sale off his "offset tweet" NFT to charity for $2.9 million.

But, if the focus remains on such people then the potential for NFTs to accept whatever existent social bear on could exist lost, claims Ethereum'due south co-founder:

"Only they could too be a missed opportunity: there is little social value in helping Elon Musk earn yet another $ane million by selling his tweet when, as far as nosotros can tell, the money is just going to himself (and, to his credit, he somewhen decided non to sell). If NFTs simply become a casino that largely benefits already-wealthy celebrities, that would exist a far less interesting issue."

Buterin suggested ii potential ways to help make NFTs more "legitimate" as a method of acting every bit a funding mechanism for causes which in some way promoted a social good.

Buterin said a decentralized autonomous organization could be prepare 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 testify off the thing they invested their money into. In combination with the start thought, wrote Buterin, this arroyo could work to "nudge users toward NFTs that contribute to valuable social causes."