NFTs | נמרוד ירון ושות׳ https://y-tax.co.il/en/category/nfts/ מיסוי בינלאומי ומיסוי ישראלי Tue, 04 Apr 2023 17:09:56 +0000 en-US hourly 1 https://wordpress.org/?v=6.9 https://y-tax.co.il/wp-content/uploads/2020/03/cropped-android-chrome-512x512-1-32x32.png NFTs | נמרוד ירון ושות׳ https://y-tax.co.il/en/category/nfts/ 32 32 NFT’s Impact on the Environment https://y-tax.co.il/en/nfts-impact-on-the-environment/?utm_source=rss&utm_medium=rss&utm_campaign=nfts-impact-on-the-environment Tue, 04 Jan 2022 00:18:45 +0000 https://y-tax.co.il/?p=6941

NFT’s Impact

Different people, places, technologies, and companies enter the cryptoasset sphere; they focus on NFTs or Non-fungible Tokens. Often, minting or creating NFTs enables entities to generate hype or engage with their consumer base. However, as NFTs invade the marketplace more, their long-term sustainability raises questions – specifically about the environment. In global music news, famous Korean pop band BTS had attempted to enter the NFT space but was subject to intense public scrutiny. 
“The BTS fan base criticized the NFT push immediately. Hashtags opposing the move hit Twitter’s top-trending list last month, and the movement has continued since then. The bulk of the criticism centers on the large energy consumption needed for NFTs, which rely on blockchain technology and are usually bought with cryptocurrencies” (wsj.com)
Technologically, the advocates are talking about the environmental impact that NFTs create. When mining an NFT on the Ethereum blockchain, users must pay a “gas-tax” fee associated with the literal fuel used to power the computer placing the item on the network-shared ledger or blockchain. These gas taxes have been linked to extreme power consumption across the globe, relating to the use of fossil fuels, and in turn, climate change.  This obstacle, the blockchain’s environmental impact, is one of the most prolific and wide-standing public arguments against cryptocurrency. As the cryptoasset space matures, we will continue to learn more about how and what impacts are changing the global economy—eventually answering the crypto question. At Nimrod Yaron & Co., we serve as a professional resource for individuals and companies invested in the global marketplace. We are specifically assisting with intelligent tax planning. Contact us today to learn about all of the services we offer.

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]]> Future of NFTs https://y-tax.co.il/en/future-of-nfts/?utm_source=rss&utm_medium=rss&utm_campaign=future-of-nfts Mon, 05 Jul 2021 10:39:06 +0000 https://y-tax.co.il/?p=4917

Learning how the technology behind the blockchain supports NFTs, allows a fluid understanding of the potential of this technology. Many different use cases are being invented in their infancy, but the development of the best use cases is still very much uncharted territory. This unknown is appealing to investors and technological innovators alike.

Mentioned before, NFTs excel as a personal identification tool for scarce items like artwork, allowing ownership to be absolute and verifiable on the internet. Additionally, use cases like event-ticketing, domain names, and even investments are being experimented with through Decentralized Finance . These new use cases remove a previously necessary middleman operator, allowing the power and decision-making to return to the people who are actually creating the items.

In event tickets, the blockchain is used for the verification of tickets purchased from a variety of sources. One company, YellowHeart, has taken a leap into the blockchain marketplace; they operate their blockchain that works with content producers to create tickets to their events. They also can sell their tickets on traditional marketplaces without compromising the incredible features of NFT blockchain technology. This allows artists to set rules about their tickets, like the pricing structures for tickets – preventing scalpers from gauging  secondhand purchasers . Significantly, YellowHeart operates its blockchain instead of the commonly used Ethereum. This exemplifies the idea of market-specific blockchains.

In the near future, NFTs can be used for identification of physical items too, like a VIN number for a car or expensive commodities like diamonds. The decentralized ledger system allows verification for all types of use cases, not just trading assets.

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]]> What is a NFT Smart Contract? https://y-tax.co.il/en/what-is-a-nft-smart-contract/?utm_source=rss&utm_medium=rss&utm_campaign=what-is-a-nft-smart-contract Mon, 05 Jul 2021 10:39:01 +0000 https://y-tax.co.il/?p=4900

NFT Smart Contract

Intellectual property rights are one of the markets of the most significant potential for NFTs. Through the concept of fungibility, NFTs can also represent individual items like artwork or video clips. Cryptocurrency and NFTs use the blockchain; the most common blockchain used for NFTs is on Ethereum’s blockchain. Ethereum is also a cryptocurrency, but through the exchange of smart contracts on the Ethereum blockchain, trading NFTs are possible, creating scarcity, and subsequently, value in a digital marketplace.

A certificate of authenticity of memorabilia creates the authenticated value of seemingly ordinary items by combining sentimental value and a legitimized governing body to prove that; the thing you own is authentic. Smart contracts are a tool in the exchange of NFTs in the digital marketplace. Smart contracts are pieces of code that execute business logic and create scarcity and value; they allow NFT creators to embed trade parameters in what they create.

The use cases for smart contracts are wide, creators of the NFT input business logic in the contract that indicate certain rules about trading their NFT. For example, a smart contract could indicate that every time a specific NFT is resold on the marketplace, the original owner/creator would get 2 percent of the sale price as a royalty. The blockchain allows verification and authentication of the original owner because it is a decentralized ledger.

Another implementation of smart contracts would be in the case of crowdsourced  fundraising. Smart contracts can be programmed for all sorts of situations, like crowdsourcing a startup company. If a company creates a smart contract where they are trying to raise $100,000, supporters of the new idea can pay directly to the smart contract, and if and only if the fundraising goals are met, the company receives the newly raised funds. Otherwise, the investors get their money back – this all happens without third-party companies like GoFundMe or Kickstarter, which collect a percentage of the money raised.

Because these agreements are on the blockchain, they are immutable and distributed, ensuring tamperproof and enforceable contracts. Smart contracts on a blockchain alone create a new market for enforceable agreements. Read more about decentralized finance here.

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]]> NFT And Crypto Difference https://y-tax.co.il/en/nft-and-crypto-difference/?utm_source=rss&utm_medium=rss&utm_campaign=nft-and-crypto-difference Mon, 05 Jul 2021 08:09:52 +0000 https://y-tax.co.il/?p=4894

What Is The Difference Between A NFT And Cryptocurrency?

NFTs or non-fungible tokens have taken the global marketplace by storm. NFTs present an exciting and prodigious opportunity for businesses and individuals willing to enter the industry. Understanding the infrastructure behind this new technology is imperative to capitalize on the real-life implementation of crypto-assets. This technology creates new business sectors like worldwide intellectual property rights and an accelerating global economy fueled by “DeFi,” decentralized finance.

Blockchain

Firstly, the blockchain. While often the word blockchain gets thrown around in the media or the financial setting, it is an essential facet of the world of crypto-assets (cryptocurrencies and NFTs). The blockchain is a decentralized ledger used to record transactions via a peer-to-peer computer network. 

For example, when an individual wants to spend 1 Bitcoin on a purchase from a seller, a blockchain verifies that the individual does indeed have 1 Bitcoin to spend, like a bank confirming a debit card purchase. Once that individual spends that Bitcoin, the blockchain records the transaction and transfers the coin to the seller’s account. What makes a blockchain different from the banking system is that the transaction ledger is decentralized and public. 

Being decentralized and public means everyone can access the list of transactions; computers assist in operating this via the blockchain anywhere globally with an internet connection. Users are not identifiable either; they effectuate through a digital wallet that is anonymous in its design; the blockchain is used to verify transactions safely, securely, and privately. 

NFT And Crypto Difference

Secondly, the distinction between traditional cryptocurrency and NFTs is imperative. They both use the blockchain for their verification and transactional history. Cryptocurrency is fungible, meaning that each coin is identical in value and features. Think of cryptocurrency as cash and NFTs as a baseball card or concert ticket.

Value is created in the transaction of NFTs through the use of Smart Contract, which you can read about here. You can also learn about the taxation of cryptocurrency here.

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