i feel this is kinda nerd shit so i should briefly (over)explain (mostly because it's a very big L for crypto losers). so essentially, before now, anyone making money off crypto trading (or just NFTs specifically) was in this kinda...grey area in terms of regulation and taxation, and the anonymized nature of cryptocurrency means that most people were straight up not reporting that money as earnings (or NFTs as assets), especially not if it was never converted back into non-cryptocurrency. this meant that, if you were dealing in crypto, you could (and i'm HUGELY over-simplifying) dodge the vast majority of regulations and requirements (and taxes) that someone making a similar amount of money in USD would deal with. after this new regulation, if you receive US $10,000 or more in cryptocurrency, you must now report it to the IRS as a cash asset, and if you don't, that is a felony.
So this is very funny, to me, for two reasons. One is that now, if a crypto-bro wants to not commit a felony, they have to un-anonymize their wallet, so they can no longer trade as an anon. They would be trading under their name (assuming they're trading $10,000 or more, per year i believe if i read right). This defeats some of the major uses of cryptocurrency, especially as it was being used to launder money, and it means your identity on the blockchain would now become knowledge people would have access to, and track all future and past trades you have made on the blockchain.
the second and funnier thing is what this does to NFTs. a cash asset is any asset which can be easily converted into cash within three months. according to this new regulation, you available cash assets would now include your NFTs (assuming they're valuable enough etc. etc.), and you would be expected to borrow and pay obligations based off of that information. so if a collector came to make good on their loan to you, they would be considering your NFT as a cash asset that can be used to pay them, but of course *selling NFTs is a fucking scam*. They're *not* cash assets, because outside of very specific circumstances, those $50,000 NFTs are not bought up again for the same or higher value.
many (it's hard to know exactly how many, but this exact thing i'm about to describe has been documented a bunch of times in this space) NFTs have their values inflated purely through insider trading, in a scam that goes (in its simplest form) something like: person 1 makes an NFT, and person 1 sells the NFT to person 2 for a very high amount of crypto, some amount of which is given back to person 2 in another, altered form so as to not be traceable as just trading money back and forth. this causes the NFT to become "worth" that amount of money that was paid for it (this is also how most of the real world art market works too!). Do this to like 5 of an artist's NFTs, and suddenly it looks like that artist's work is worth X amount of money, despite no one having actually *paid* that much for it really, but now that the value of their work appears to be high, it can be sold to rubes for that high amount for real now.
which is all a way to say that, if you are said rube, and you just bought a shitty picture of a monkey smoking a joint for $75,000, that is now considered cash you can access within three months when it comes to paying debtors (or anything else that involves how much cash and assets you have on hand, including how much you pay in taxes), even though, if you tried to sell it, no one would buy it for that much. so people will be expecting you to have money you do not actually have the ability to access. Not only that, but you would have had to un-anonymize you wallet's identity on the blockchain to buy the monkey, so everyone knows who the rube is.
it owns ok? it owns. fuck this is a terrible explanation. i'm bad at explaining econ shit and probably got 50 things wrong go away
andulkaphoto
baratheonpilled
snowghoul
yousharknotpass
tangentwithtanner
theartofmadeline
