NFTs actually are an easy concept, a dollar bill is a Frugal Token, because all dollar bills are the same, you can change one for another and it all works out because both represent the same thing (one dollar). A deed to a house is not frugal, you can’t just change one deed for a different one because they represent different things. NFTs are just that, Non Frugal Tokens, why some people wanted to own a digital token representing ownership of a publicly available digital image is what can’t be explained.
Art is a tax deduction in the US. Say you have a tax liability of $10k, you buy $10k of Art and you can claim the value (not including sales cost) as a deduction.
Then after the tax year, you sell it to the next guy. As long as you sell for the same price, you pay that much less tax (that is, about 25% of the value less in tax).
Well an NFT is just Art without the hassle or expense of insurance or storage. It could be used as a tax deduction.
When the IRS ruled it was no longer eligible, the NFT market collapsed.
1: being something (such as money or a commodity) of such a nature that one part or quantity may be replaced by another equal part or quantity in paying a debt or settling an account
NFTs actually are an easy concept, a dollar bill is a Frugal Token, because all dollar bills are the same, you can change one for another and it all works out because both represent the same thing (one dollar). A deed to a house is not frugal, you can’t just change one deed for a different one because they represent different things. NFTs are just that, Non Frugal Tokens, why some people wanted to own a digital token representing ownership of a publicly available digital image is what can’t be explained.
It’s a form of tax avoidance.
Art is a tax deduction in the US. Say you have a tax liability of $10k, you buy $10k of Art and you can claim the value (not including sales cost) as a deduction.
Then after the tax year, you sell it to the next guy. As long as you sell for the same price, you pay that much less tax (that is, about 25% of the value less in tax).
Well an NFT is just Art without the hassle or expense of insurance or storage. It could be used as a tax deduction.
When the IRS ruled it was no longer eligible, the NFT market collapsed.
fungible
adjective fun·gi·ble ˈfən-jə-bəl
1: being something (such as money or a commodity) of such a nature that one part or quantity may be replaced by another equal part or quantity in paying a debt or settling an account