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NFT vs. VC

Increasing digitization affects all areas of life, including our own identity. In the digital world, our identity is represented by a collection of information stored in various databases and servers. However, the current centralized identity system has several drawbacks, including privacy issues and security concerns. This has led to the emergence of decentralized identity solutions that offer users more control and privacy. Self-sovereign identity (SSI) is one such solution that gives users control over their digital identity. In this article, we will explore two emerging decentralized identity solutions, NFTs and verifiable credentials, and their potential to change the way we view digital identity.

NFTs, or Non-Fungible Tokens, are digital assets that are unique and cannot be replicated. They are typically used in the art and gaming industries to represent ownership of a unique item or asset. NFTs offer a new way to think about digital identity, as they can be used to represent ownership of unique data, such as an identity claim. This means that a person could potentially own their digital identity as an NFT and have full control over how it is used and shared.
Verified credentials, on the other hand, are a type of digital identity that is anchored in a decentralized ledger. This means that a person can present their Verified credentials as proof of their identity without having to reveal any personal information. Verified credentials are based on the concept of self-sovereign identity and give users more control over their digital identity.

Although both NFTs and verified credentials offer unique ways to think about digital identity, they differ in key ways as well as use cases.

Fungible vs. Non Fungible

A key difference between VCs and NFTs is their fungibility. VCs are typically fungible, meaning they are interchangeable and can be used in the same way as their physical counterparts. For example, two driver’s licenses with the same information are essentially identical. NFTs, on the other hand, are not fungible, meaning each token is unique and cannot be exchanged for another token like VCs or other cryptocurrencies.

Blockchain limitation

NFTs (Non-Fungible Tokens) are unique digital assets stored on a specific blockchain. Due to their uniqueness, NFTs cannot be easily transferred to or used on another blockchain without losing their unique properties. For example, an NFT created on the Ethereum blockchain cannot be used directly on the Binance smart chain or any other blockchain without going through a conversion process, which may result in the loss of its uniqueness and value.

Verified Credentials (VCs), on the other hand, are interoperable across multiple blockchains. By using a common standard, VCs can be easily shared, verified, and exchanged between different entities and across different blockchain networks, making them a more flexible and portable solution for decentralized identity.


NFTs have certain limitations when it comes to decentralized identities, especially in terms of privacy and data protection compliance. One of the main problems with using NFTs for decentralized identity is that they typically store information on the blockchain, which is then publicly accessible and visible to anyone on the network. This means that sensitive information such as a person’s name or other personal details can be easily viewed and accessed by anyone with access to the blockchain.

Both technologies can be used to map decentralized identities, but they differ significantly in areas such as privacy and interoperability. Fundamentally, therefore, VCs are used to prove who a person is, and NFTs are used to prove what a person owns.