Seriously, this thread has gone off the rails into insane conspiracy theory territory.
People talk about how cult like it is when you actually buy into the crypto and NFT game, but man, listening to some of you talk about these assets, where little to no knowledge of how it actually works is known, has turned into its own cult like misinformation campaign.
Again, if you play a pay to earn game, you never have to sell the items you earn. If you do sell them, you never have to cash out the currency you receive and you just roll it into buying other items, and NO you don't need to pay taxes on the crypto you receive or spend that isn't cashed out into fiat.
Come on son. You guys are smarter than this. You don't have to like it, but at least dislike NFTs and crypto for what they are and not for the insane boogeyman ideas that live in your head about it.
For some reason in 2022 Unity tech/game demos that have been in "development" for 7+ years that collected hundreds of thousands in crowdfund money are labeled "passion projects"...
While games that are fully released/can be played right now with millions of other people are labeled "scams"...
I'm still confused. Like, why do you want a smart contract on a ledger to track ownership of virtual items in a game vs just a centralized database?
Take, I dunno, Everquest or whatever. How to you make a game that's both affordable enough for mainstream appeal and financially sustainable if you have to verify every item transfer and you have to pay to mint a new NFT for every trash item. How do you stop bottlenecks in block verification? People aren't gonna want to wait to trade. Seems super inefficient to me.
I'm still confused. Like, why do you want a smart contract on a ledger to track ownership of virtual items in a game vs just a centralized database?
Take, I dunno, Everquest or whatever. How to you make a game that's both affordable enough for mainstream appeal and financially sustainable if you have to verify every item transfer and you have to pay to mint a new NFT for every trash item. How do you stop bottlenecks in block verification? People aren't gonna want to wait to trade. Seems super inefficient to me.
Good questions!
So, the cost to mint NFTs can be essentially free if you aren't minting them on one of the popular chains.
It doesn't necessarily take a lot of time to mint them either.
Why you would want to use blockchain is a good question too. Especially since some games that utilize blockchain don't actually want them to be decentralized. Some would say for security, some would say for interoperability, some would say specifically for the monetization. Solid question, and I would suspect if you asked 5 different developers you'd get 5 different answers.
The next issue is, how do you make the items affordable. Man, that's a tough question, because items from the developer are generally affordable in many cases, but once "players" get their hands on them, it's a completely different story.
I find it really funny that people are worried about what the developers will do with NFTs when the players mark up prices way worse. But then again that's probably in part what the developers hope for, so they get their percentage. But I digress.
As for bottlenecks, it depends on the protocol and implementation. Some protocols have a pretty robust throughput. It would nearly a hundred thousand transactions a second prolonged over a period of time to really cause a bottleneck. Not really unheard of with a high number of players, but not something I think developers are worried about right now.
I find it really funny that people are worried about what the developers will do with NFTs when the players mark up prices way worse. But then again that's probably in part what the developers hope for, so they get their percentage. But I digress.
I don't know what you're talking about here. What have players 'marked up' worse than developers mark up?
Also, I'm not worried about NFTs as I won't be buying any or playing a game that features them (if they can be totally ignored, okay). If a bunch of people get rich, or get ripped off, it doesn't impact me much. Like when Bernie Madoff took a dive... didn't touch me.
Quite literally every paid nft at this point has been resold for a substantial markup over the initial price. Not just an extra 5 or 10 dollars, we're talking 300%, 600% ... 1000% markup on a 10 dollar nft.
But you've seen this in games with auction houses too. If auction houses aren't saturated with items, there are always sellers looking to make as much as anyone is willing to pay.
Companies certainly are bad with monetization a lot of the time, but players so far have been worse. Devs at least try and make some purchases accessible, players don't care if they buy it all and price you out, as long as someone buys. They owe you nothing whereas developers at least attempt to be inclusive for the sake of the average player.
I'm still confused. Like, why do you want a smart contract on a ledger to track ownership of virtual items in a game vs just a centralized database?
Take, I dunno, Everquest or whatever. How to you make a game that's both affordable enough for mainstream appeal and financially sustainable if you have to verify every item transfer and you have to pay to mint a new NFT for every trash item. How do you stop bottlenecks in block verification? People aren't gonna want to wait to trade. Seems super inefficient to me.
Good questions!
So, the cost to mint NFTs can be essentially free if you aren't minting them on one of the popular chains.
It doesn't necessarily take a lot of time to mint them either.
Why you would want to use blockchain is a good question too. Especially since some games that utilize blockchain don't actually want them to be decentralized. Some would say for security, some would say for interoperability, some would say specifically for the monetization. Solid question, and I would suspect if you asked 5 different developers you'd get 5 different answers.
The next issue is, how do you make the items affordable. Man, that's a tough question, because items from the developer are generally affordable in many cases, but once "players" get their hands on them, it's a completely different story.
I find it really funny that people are worried about what the developers will do with NFTs when the players mark up prices way worse. But then again that's probably in part what the developers hope for, so they get their percentage. But I digress.
As for bottlenecks, it depends on the protocol and implementation. Some protocols have a pretty robust throughput. It would nearly a hundred thousand transactions a second prolonged over a period of time to really cause a bottleneck. Not really unheard of with a high number of players, but not something I think developers are worried about right now.
Your getting me more and more interested all the time.
So with all these custom chains, how do we know who’s honest and who’s not?
Its trying to put a tangible value on in game virtual items. As soon as that happens, the IRS will want it taxed. Now, some folks have said things along the lines of “If you have to pay a 20% tax on a gain in an NFT then you still made 80%”.
Simply put… NO.
If you are an investor buying and selling then sure you do not care. I just want to play a damn game. Now That Sword of Doom is crafted, or dropped or found or anything else in the GAME I am playing, and it has VALUE, then I have to eventually pay for that. I do not want to pay $200 tax on my Sword of Doom that dropped from the boss simply because some dumbasses decided that THESE pixels were worth $1000. I do not want to sell the sword to make "money". I do not want to pay taxes to keep my Sword. I just want my damn Sword and to play a game with it.
This is EXACTLY like getting something from a game show " You win a new car!!!" Great, but I have to pay taxes on that car now. Of course.. its a car so I'm happy to pay it. That car has real value to me. But the Sword of Doom's value was supposed to be letting me use it in game. Now I cant without playing the tax man....
YAY.. what progress...
Yep. Worse is when you gain the item, and then it goes down before you sell it. If it's a powerful item, and most gamers (i.e. not professional RMTers) not knowing anything about these kinds of tax laws, they probably will just keep it. Who wants to buy Cryptos anyways? So, it's gone down, you still owe taxes on it's value when you got it, and what if you can't sell it anymore in year 2? You've got a capital loss, but I believe you can only apply that against capital gains. You owe taxes, and have no way to pay for it other than out of your pocket. And this scenario doesn't even consider if the Crypto currency crashes.
I have a feeling that this is going to get very messy.
And I agree that I want a game designed as a good game, not any of this crap. But once it's in the game, you can bet that the game design will include this crap.
No thanks.
Usually you don’t have to pay any capital gains until you cash out.
Things can start getting really complicated
Sorry, but I haven't read any possible responses to this yet. So I may be repeating something.
Some years back, a California couple found a stash of gold coins in their back yard. By stash, I mean $10 million worth. They had to pay taxes on its value, even if they didn't sell it. It was "taxable income."
Here's an article on it. But also notice that "gift taxes" might be the IRS's ruling in these game NFTs. Funny, because in that case, it's the giver of the gift that owes the taxes. The "game" companies may be shooting themselves in the foot.
I'm still confused. Like, why do you want a smart contract on a ledger to track ownership of virtual items in a game vs just a centralized database?
Take, I dunno, Everquest or whatever. How to you make a game that's both affordable enough for mainstream appeal and financially sustainable if you have to verify every item transfer and you have to pay to mint a new NFT for every trash item. How do you stop bottlenecks in block verification? People aren't gonna want to wait to trade. Seems super inefficient to me.
Good questions!
So, the cost to mint NFTs can be essentially free if you aren't minting them on one of the popular chains.
It doesn't necessarily take a lot of time to mint them either.
Why you would want to use blockchain is a good question too. Especially since some games that utilize blockchain don't actually want them to be decentralized. Some would say for security, some would say for interoperability, some would say specifically for the monetization. Solid question, and I would suspect if you asked 5 different developers you'd get 5 different answers.
The next issue is, how do you make the items affordable. Man, that's a tough question, because items from the developer are generally affordable in many cases, but once "players" get their hands on them, it's a completely different story.
I find it really funny that people are worried about what the developers will do with NFTs when the players mark up prices way worse. But then again that's probably in part what the developers hope for, so they get their percentage. But I digress.
As for bottlenecks, it depends on the protocol and implementation. Some protocols have a pretty robust throughput. It would nearly a hundred thousand transactions a second prolonged over a period of time to really cause a bottleneck. Not really unheard of with a high number of players, but not something I think developers are worried about right now.
Your getting me more and more interested all the time.
So with all these custom chains, how do we know who’s honest and who’s not?
How could anything go wrong?
You're right. There's over 16K different kinds tokens on over 400 exchanges all with different chains and protocols.
There are some that are completely useless, fabricated only to take advantage of people.
Then there are some with utility.
Then there are others that are meant to be a currency.
Others that are meant for governance of the protocol.
I don't blame anyone for being skeptical and wary of it at all. My advice is to stay far away from anything you're not comfortable with.
And only every "buy into" a game that is something you'd play even if NFTs and blockchain weren't a part of it.
And I fully understand that those options are extremely scarce, if any exist right now.
Its trying to put a tangible value on in game virtual items. As soon as that happens, the IRS will want it taxed. Now, some folks have said things along the lines of “If you have to pay a 20% tax on a gain in an NFT then you still made 80%”.
Simply put… NO.
If you are an investor buying and selling then sure you do not care. I just want to play a damn game. Now That Sword of Doom is crafted, or dropped or found or anything else in the GAME I am playing, and it has VALUE, then I have to eventually pay for that. I do not want to pay $200 tax on my Sword of Doom that dropped from the boss simply because some dumbasses decided that THESE pixels were worth $1000. I do not want to sell the sword to make "money". I do not want to pay taxes to keep my Sword. I just want my damn Sword and to play a game with it.
This is EXACTLY like getting something from a game show " You win a new car!!!" Great, but I have to pay taxes on that car now. Of course.. its a car so I'm happy to pay it. That car has real value to me. But the Sword of Doom's value was supposed to be letting me use it in game. Now I cant without playing the tax man....
YAY.. what progress...
Yep. Worse is when you gain the item, and then it goes down before you sell it. If it's a powerful item, and most gamers (i.e. not professional RMTers) not knowing anything about these kinds of tax laws, they probably will just keep it. Who wants to buy Cryptos anyways? So, it's gone down, you still owe taxes on it's value when you got it, and what if you can't sell it anymore in year 2? You've got a capital loss, but I believe you can only apply that against capital gains. You owe taxes, and have no way to pay for it other than out of your pocket. And this scenario doesn't even consider if the Crypto currency crashes.
I have a feeling that this is going to get very messy.
And I agree that I want a game designed as a good game, not any of this crap. But once it's in the game, you can bet that the game design will include this crap.
No thanks.
Usually you don’t have to pay any capital gains until you cash out.
Things can start getting really complicated
Sorry, but I haven't read any possible responses to this yet. So I may be repeating something.
Some years back, a California couple found a stash of gold coins in their back yard. By stash, I mean $10 million worth. They had to pay taxes on its value, even if they didn't sell it. It was "taxable income."
Here's an article on it. But also notice that "gift taxes" might be the IRS's ruling in these game NFTs. Funny, because in that case, it's the giver of the gift that owes the taxes. The "game" companies may be shooting themselves in the foot.
I seriously doubt the IRS would rule even giveaways as part of a gift tax.
It was already decided that many of the art NFTs are taxed as property, and technically there's a case for capital gains taxes of tokens or nfts if there was substantial appreciation when sold.
Gaming nfts are a little different though. Since they differ from case to case there's no real precedent for their worth, which is why they are more easily taxable on sale.
But unless you're a big time investor even hundred or thousand dollar sales of nfts would be unlikely to be taxed unless you cashed them out,, though it would still be smart to report them.
Its trying to put a tangible value on in game virtual items. As soon as that happens, the IRS will want it taxed. Now, some folks have said things along the lines of “If you have to pay a 20% tax on a gain in an NFT then you still made 80%”.
Simply put… NO.
If you are an investor buying and selling then sure you do not care. I just want to play a damn game. Now That Sword of Doom is crafted, or dropped or found or anything else in the GAME I am playing, and it has VALUE, then I have to eventually pay for that. I do not want to pay $200 tax on my Sword of Doom that dropped from the boss simply because some dumbasses decided that THESE pixels were worth $1000. I do not want to sell the sword to make "money". I do not want to pay taxes to keep my Sword. I just want my damn Sword and to play a game with it.
This is EXACTLY like getting something from a game show " You win a new car!!!" Great, but I have to pay taxes on that car now. Of course.. its a car so I'm happy to pay it. That car has real value to me. But the Sword of Doom's value was supposed to be letting me use it in game. Now I cant without playing the tax man....
YAY.. what progress...
Yep. Worse is when you gain the item, and then it goes down before you sell it. If it's a powerful item, and most gamers (i.e. not professional RMTers) not knowing anything about these kinds of tax laws, they probably will just keep it. Who wants to buy Cryptos anyways? So, it's gone down, you still owe taxes on it's value when you got it, and what if you can't sell it anymore in year 2? You've got a capital loss, but I believe you can only apply that against capital gains. You owe taxes, and have no way to pay for it other than out of your pocket. And this scenario doesn't even consider if the Crypto currency crashes.
I have a feeling that this is going to get very messy.
And I agree that I want a game designed as a good game, not any of this crap. But once it's in the game, you can bet that the game design will include this crap.
No thanks.
Usually you don’t have to pay any capital gains until you cash out.
Things can start getting really complicated
Sorry, but I haven't read any possible responses to this yet. So I may be repeating something.
Some years back, a California couple found a stash of gold coins in their back yard. By stash, I mean $10 million worth. They had to pay taxes on its value, even if they didn't sell it. It was "taxable income."
Here's an article on it. But also notice that "gift taxes" might be the IRS's ruling in these game NFTs. Funny, because in that case, it's the giver of the gift that owes the taxes. The "game" companies may be shooting themselves in the foot.
I seriously doubt the IRS would rule even giveaways as part of a gift tax.
It was already decided that many of the art NFTs are taxed as property, and technically there's a case for capital gains taxes of tokens or nfts if there was substantial appreciation when sold.
Gaming nfts are a little different though. Since they differ from case to case there's no real precedent for their worth, which is why they are more easily taxable on sale.
But unless you're a big time investor even hundred or thousand dollar sales of nfts would be unlikely to be taxed unless you cashed them out,, though it would still be smart to report them.
Most people don't even bother though.
From what I see they would be classified as “collectibles “ and taxed as income. But yeah, I think they don’t go after most individuals at start, but they WILL go after the companies and make them start withholding for large items.
I’m not anti-crypto. I have a decent stash of throwaway Bitcoin. Might be Eth with the drop. I just hate the idea of it causing my gaming to become even more of a chore and less of a game.
All time classic MY NEW FAVORITE POST! (Keep laying those bricks)
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Proudly wearing the Harbinger badge since Dec 23, 2017.
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I find it really funny that people are worried about what the developers will do with NFTs when the players mark up prices way worse. But then again that's probably in part what the developers hope for, so they get their percentage. But I digress.
I don't know what you're talking about here. What have players 'marked up' worse than developers mark up?
Also, I'm not worried about NFTs as I won't be buying any or playing a game that features them (if they can be totally ignored, okay). If a bunch of people get rich, or get ripped off, it doesn't impact me much. Like when Bernie Madoff took a dive... didn't touch me.
Quite literally every paid nft at this point has been resold for a substantial markup over the initial price. Not just an extra 5 or 10 dollars, we're talking 300%, 600% ... 1000% markup on a 10 dollar nft.
You can't know this to be true, could be that most NFTs never get sold for more than their original price, where would one be able to verify?
Here's a listing to some sold by Pantheon Online that don't appear to be taking off.
Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV
Don't just play games, inhabit virtual worlds™
"This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon
I find it really funny that people are worried about what the developers will do with NFTs when the players mark up prices way worse. But then again that's probably in part what the developers hope for, so they get their percentage. But I digress.
I don't know what you're talking about here. What have players 'marked up' worse than developers mark up?
Also, I'm not worried about NFTs as I won't be buying any or playing a game that features them (if they can be totally ignored, okay). If a bunch of people get rich, or get ripped off, it doesn't impact me much. Like when Bernie Madoff took a dive... didn't touch me.
Quite literally every paid nft at this point has been resold for a substantial markup over the initial price. Not just an extra 5 or 10 dollars, we're talking 300%, 600% ... 1000% markup on a 10 dollar nft.
You can't know this to be true, could be that most NFTs never get sold for more than their original price, where would one be able to verify?
Here's a listing to some sold by Pantheon Online that don't appear to be taking off.
That's a little different. That's nft art and not gaming assets. But you can check other markets. Ember sword land sales, Blankos, ships in a few games.
The thing about crypto markets is you can generally see what's been sold and for how much even if you don't know who it was sold to.
Tbh I'm no different though. I listed an asset for insanely high, I know it will never sell for that price, but I can't use every asset I own so if someone wants to pay an insane price for it I won't complain. If I was honestly trying to unload it though I would have put something way more reasonable. But as high as I priced my asset, there were dozens more two or three time the price, with worse mint numbers.
Its trying to put a tangible value on in game virtual items. As soon as that happens, the IRS will want it taxed. Now, some folks have said things along the lines of “If you have to pay a 20% tax on a gain in an NFT then you still made 80%”.
Simply put… NO.
If you are an investor buying and selling then sure you do not care. I just want to play a damn game. Now That Sword of Doom is crafted, or dropped or found or anything else in the GAME I am playing, and it has VALUE, then I have to eventually pay for that. I do not want to pay $200 tax on my Sword of Doom that dropped from the boss simply because some dumbasses decided that THESE pixels were worth $1000. I do not want to sell the sword to make "money". I do not want to pay taxes to keep my Sword. I just want my damn Sword and to play a game with it.
This is EXACTLY like getting something from a game show " You win a new car!!!" Great, but I have to pay taxes on that car now. Of course.. its a car so I'm happy to pay it. That car has real value to me. But the Sword of Doom's value was supposed to be letting me use it in game. Now I cant without playing the tax man....
YAY.. what progress...
Yep. Worse is when you gain the item, and then it goes down before you sell it. If it's a powerful item, and most gamers (i.e. not professional RMTers) not knowing anything about these kinds of tax laws, they probably will just keep it. Who wants to buy Cryptos anyways? So, it's gone down, you still owe taxes on it's value when you got it, and what if you can't sell it anymore in year 2? You've got a capital loss, but I believe you can only apply that against capital gains. You owe taxes, and have no way to pay for it other than out of your pocket. And this scenario doesn't even consider if the Crypto currency crashes.
I have a feeling that this is going to get very messy.
And I agree that I want a game designed as a good game, not any of this crap. But once it's in the game, you can bet that the game design will include this crap.
No thanks.
Usually you don’t have to pay any capital gains until you cash out.
Things can start getting really complicated
Sorry, but I haven't read any possible responses to this yet. So I may be repeating something.
Some years back, a California couple found a stash of gold coins in their back yard. By stash, I mean $10 million worth. They had to pay taxes on its value, even if they didn't sell it. It was "taxable income."
Here's an article on it. But also notice that "gift taxes" might be the IRS's ruling in these game NFTs. Funny, because in that case, it's the giver of the gift that owes the taxes. The "game" companies may be shooting themselves in the foot.
I seriously doubt the IRS would rule even giveaways as part of a gift tax.
It was already decided that many of the art NFTs are taxed as property, and technically there's a case for capital gains taxes of tokens or nfts if there was substantial appreciation when sold.
Gaming nfts are a little different though. Since they differ from case to case there's no real precedent for their worth, which is why they are more easily taxable on sale.
But unless you're a big time investor even hundred or thousand dollar sales of nfts would be unlikely to be taxed unless you cashed them out,, though it would still be smart to report them.
Most people don't even bother though.
Don’t kid yourself, all the marketing and hype.
You guys are putting a bullseye right on yourselves.
Its trying to put a tangible value on in game virtual items. As soon as that happens, the IRS will want it taxed. Now, some folks have said things along the lines of “If you have to pay a 20% tax on a gain in an NFT then you still made 80%”.
Simply put… NO.
If you are an investor buying and selling then sure you do not care. I just want to play a damn game. Now That Sword of Doom is crafted, or dropped or found or anything else in the GAME I am playing, and it has VALUE, then I have to eventually pay for that. I do not want to pay $200 tax on my Sword of Doom that dropped from the boss simply because some dumbasses decided that THESE pixels were worth $1000. I do not want to sell the sword to make "money". I do not want to pay taxes to keep my Sword. I just want my damn Sword and to play a game with it.
This is EXACTLY like getting something from a game show " You win a new car!!!" Great, but I have to pay taxes on that car now. Of course.. its a car so I'm happy to pay it. That car has real value to me. But the Sword of Doom's value was supposed to be letting me use it in game. Now I cant without playing the tax man....
YAY.. what progress...
Yep. Worse is when you gain the item, and then it goes down before you sell it. If it's a powerful item, and most gamers (i.e. not professional RMTers) not knowing anything about these kinds of tax laws, they probably will just keep it. Who wants to buy Cryptos anyways? So, it's gone down, you still owe taxes on it's value when you got it, and what if you can't sell it anymore in year 2? You've got a capital loss, but I believe you can only apply that against capital gains. You owe taxes, and have no way to pay for it other than out of your pocket. And this scenario doesn't even consider if the Crypto currency crashes.
I have a feeling that this is going to get very messy.
And I agree that I want a game designed as a good game, not any of this crap. But once it's in the game, you can bet that the game design will include this crap.
No thanks.
Usually you don’t have to pay any capital gains until you cash out.
Things can start getting really complicated
Sorry, but I haven't read any possible responses to this yet. So I may be repeating something.
Some years back, a California couple found a stash of gold coins in their back yard. By stash, I mean $10 million worth. They had to pay taxes on its value, even if they didn't sell it. It was "taxable income."
Here's an article on it. But also notice that "gift taxes" might be the IRS's ruling in these game NFTs. Funny, because in that case, it's the giver of the gift that owes the taxes. The "game" companies may be shooting themselves in the foot.
I seriously doubt the IRS would rule even giveaways as part of a gift tax.
It was already decided that many of the art NFTs are taxed as property, and technically there's a case for capital gains taxes of tokens or nfts if there was substantial appreciation when sold.
Gaming nfts are a little different though. Since they differ from case to case there's no real precedent for their worth, which is why they are more easily taxable on sale.
But unless you're a big time investor even hundred or thousand dollar sales of nfts would be unlikely to be taxed unless you cashed them out,, though it would still be smart to report them.
Most people don't even bother though.
Don’t kid yourself, all the marketing and hype.
You guys are putting a bullseye right on yourselves.
Its trying to put a tangible value on in game virtual items. As soon as that happens, the IRS will want it taxed. Now, some folks have said things along the lines of “If you have to pay a 20% tax on a gain in an NFT then you still made 80%”.
Simply put… NO.
If you are an investor buying and selling then sure you do not care. I just want to play a damn game. Now That Sword of Doom is crafted, or dropped or found or anything else in the GAME I am playing, and it has VALUE, then I have to eventually pay for that. I do not want to pay $200 tax on my Sword of Doom that dropped from the boss simply because some dumbasses decided that THESE pixels were worth $1000. I do not want to sell the sword to make "money". I do not want to pay taxes to keep my Sword. I just want my damn Sword and to play a game with it.
This is EXACTLY like getting something from a game show " You win a new car!!!" Great, but I have to pay taxes on that car now. Of course.. its a car so I'm happy to pay it. That car has real value to me. But the Sword of Doom's value was supposed to be letting me use it in game. Now I cant without playing the tax man....
YAY.. what progress...
Yep. Worse is when you gain the item, and then it goes down before you sell it. If it's a powerful item, and most gamers (i.e. not professional RMTers) not knowing anything about these kinds of tax laws, they probably will just keep it. Who wants to buy Cryptos anyways? So, it's gone down, you still owe taxes on it's value when you got it, and what if you can't sell it anymore in year 2? You've got a capital loss, but I believe you can only apply that against capital gains. You owe taxes, and have no way to pay for it other than out of your pocket. And this scenario doesn't even consider if the Crypto currency crashes.
I have a feeling that this is going to get very messy.
And I agree that I want a game designed as a good game, not any of this crap. But once it's in the game, you can bet that the game design will include this crap.
No thanks.
Usually you don’t have to pay any capital gains until you cash out.
Things can start getting really complicated
Sorry, but I haven't read any possible responses to this yet. So I may be repeating something.
Some years back, a California couple found a stash of gold coins in their back yard. By stash, I mean $10 million worth. They had to pay taxes on its value, even if they didn't sell it. It was "taxable income."
Here's an article on it. But also notice that "gift taxes" might be the IRS's ruling in these game NFTs. Funny, because in that case, it's the giver of the gift that owes the taxes. The "game" companies may be shooting themselves in the foot.
I seriously doubt the IRS would rule even giveaways as part of a gift tax.
It was already decided that many of the art NFTs are taxed as property, and technically there's a case for capital gains taxes of tokens or nfts if there was substantial appreciation when sold.
Gaming nfts are a little different though. Since they differ from case to case there's no real precedent for their worth, which is why they are more easily taxable on sale.
But unless you're a big time investor even hundred or thousand dollar sales of nfts would be unlikely to be taxed unless you cashed them out,, though it would still be smart to report them.
Most people don't even bother though.
Don’t kid yourself, all the marketing and hype.
You guys are putting a bullseye right on yourselves.
I'm not even sure what that means.
It means that with all the noise and hub bub, you’ve probably caught the attention of money hungry governments.
Its trying to put a tangible value on in game virtual items. As soon as that happens, the IRS will want it taxed. Now, some folks have said things along the lines of “If you have to pay a 20% tax on a gain in an NFT then you still made 80%”.
Simply put… NO.
If you are an investor buying and selling then sure you do not care. I just want to play a damn game. Now That Sword of Doom is crafted, or dropped or found or anything else in the GAME I am playing, and it has VALUE, then I have to eventually pay for that. I do not want to pay $200 tax on my Sword of Doom that dropped from the boss simply because some dumbasses decided that THESE pixels were worth $1000. I do not want to sell the sword to make "money". I do not want to pay taxes to keep my Sword. I just want my damn Sword and to play a game with it.
This is EXACTLY like getting something from a game show " You win a new car!!!" Great, but I have to pay taxes on that car now. Of course.. its a car so I'm happy to pay it. That car has real value to me. But the Sword of Doom's value was supposed to be letting me use it in game. Now I cant without playing the tax man....
YAY.. what progress...
Yep. Worse is when you gain the item, and then it goes down before you sell it. If it's a powerful item, and most gamers (i.e. not professional RMTers) not knowing anything about these kinds of tax laws, they probably will just keep it. Who wants to buy Cryptos anyways? So, it's gone down, you still owe taxes on it's value when you got it, and what if you can't sell it anymore in year 2? You've got a capital loss, but I believe you can only apply that against capital gains. You owe taxes, and have no way to pay for it other than out of your pocket. And this scenario doesn't even consider if the Crypto currency crashes.
I have a feeling that this is going to get very messy.
And I agree that I want a game designed as a good game, not any of this crap. But once it's in the game, you can bet that the game design will include this crap.
No thanks.
Usually you don’t have to pay any capital gains until you cash out.
Things can start getting really complicated
Sorry, but I haven't read any possible responses to this yet. So I may be repeating something.
Some years back, a California couple found a stash of gold coins in their back yard. By stash, I mean $10 million worth. They had to pay taxes on its value, even if they didn't sell it. It was "taxable income."
Here's an article on it. But also notice that "gift taxes" might be the IRS's ruling in these game NFTs. Funny, because in that case, it's the giver of the gift that owes the taxes. The "game" companies may be shooting themselves in the foot.
I seriously doubt the IRS would rule even giveaways as part of a gift tax.
It was already decided that many of the art NFTs are taxed as property, and technically there's a case for capital gains taxes of tokens or nfts if there was substantial appreciation when sold.
Gaming nfts are a little different though. Since they differ from case to case there's no real precedent for their worth, which is why they are more easily taxable on sale.
But unless you're a big time investor even hundred or thousand dollar sales of nfts would be unlikely to be taxed unless you cashed them out,, though it would still be smart to report them.
Most people don't even bother though.
Don’t kid yourself, all the marketing and hype.
You guys are putting a bullseye right on yourselves.
I'm not even sure what that means.
It means that with all the noise and hub bub, you’ve probably caught the attention of money hungry governments.
They were money hungry and been attentive to crypto far before I got involved.
Some have even bought in far more than I'm comfortable with. China for example went ahead and outlawed mining and other currencies while they started their own digital yuan built on a centralized blockchain.
It's happening one way or another around the globe. Remember when you wanted to be the monopoly banker? Might be way late to that game.
Its trying to put a tangible value on in game virtual items. As soon as that happens, the IRS will want it taxed. Now, some folks have said things along the lines of “If you have to pay a 20% tax on a gain in an NFT then you still made 80%”.
Simply put… NO.
If you are an investor buying and selling then sure you do not care. I just want to play a damn game. Now That Sword of Doom is crafted, or dropped or found or anything else in the GAME I am playing, and it has VALUE, then I have to eventually pay for that. I do not want to pay $200 tax on my Sword of Doom that dropped from the boss simply because some dumbasses decided that THESE pixels were worth $1000. I do not want to sell the sword to make "money". I do not want to pay taxes to keep my Sword. I just want my damn Sword and to play a game with it.
This is EXACTLY like getting something from a game show " You win a new car!!!" Great, but I have to pay taxes on that car now. Of course.. its a car so I'm happy to pay it. That car has real value to me. But the Sword of Doom's value was supposed to be letting me use it in game. Now I cant without playing the tax man....
YAY.. what progress...
Yep. Worse is when you gain the item, and then it goes down before you sell it. If it's a powerful item, and most gamers (i.e. not professional RMTers) not knowing anything about these kinds of tax laws, they probably will just keep it. Who wants to buy Cryptos anyways? So, it's gone down, you still owe taxes on it's value when you got it, and what if you can't sell it anymore in year 2? You've got a capital loss, but I believe you can only apply that against capital gains. You owe taxes, and have no way to pay for it other than out of your pocket. And this scenario doesn't even consider if the Crypto currency crashes.
I have a feeling that this is going to get very messy.
And I agree that I want a game designed as a good game, not any of this crap. But once it's in the game, you can bet that the game design will include this crap.
No thanks.
Usually you don’t have to pay any capital gains until you cash out.
Things can start getting really complicated
Sorry, but I haven't read any possible responses to this yet. So I may be repeating something.
Some years back, a California couple found a stash of gold coins in their back yard. By stash, I mean $10 million worth. They had to pay taxes on its value, even if they didn't sell it. It was "taxable income."
Here's an article on it. But also notice that "gift taxes" might be the IRS's ruling in these game NFTs. Funny, because in that case, it's the giver of the gift that owes the taxes. The "game" companies may be shooting themselves in the foot.
I seriously doubt the IRS would rule even giveaways as part of a gift tax.
It was already decided that many of the art NFTs are taxed as property, and technically there's a case for capital gains taxes of tokens or nfts if there was substantial appreciation when sold.
Gaming nfts are a little different though. Since they differ from case to case there's no real precedent for their worth, which is why they are more easily taxable on sale.
But unless you're a big time investor even hundred or thousand dollar sales of nfts would be unlikely to be taxed unless you cashed them out,, though it would still be smart to report them.
Most people don't even bother though.
Don’t kid yourself, all the marketing and hype.
You guys are putting a bullseye right on yourselves.
I'm not even sure what that means.
It means that with all the noise and hub bub, you’ve probably caught the attention of money hungry governments.
They were money hungry and been attentive to crypto far before I got involved.
Some have even bought in far more than I'm comfortable with. China for example went ahead and outlawed mining and other currencies while they started their own digital yuan built on a centralized blockchain.
It's happening one way or another around the globe. Remember when you wanted to be the monopoly banker? Might be way late to that game.
The thing is, nobody smokes and shit anymore.
They need new sin taxes.
NFT’s
Not like anybody needs them, in fact many in the public might even be supportive of taxing stuff like this.
Time will tell
Edit: Thinking more on it, why don’t we drop the tax on things we need and put that tax on things that nobody needs.
I'm still confused. Like, why do you want a smart contract on a ledger to track ownership of virtual items in a game vs just a centralized database?
Take, I dunno, Everquest or whatever. How to you make a game that's both affordable enough for mainstream appeal and financially sustainable if you have to verify every item transfer and you have to pay to mint a new NFT for every trash item. How do you stop bottlenecks in block verification? People aren't gonna want to wait to trade. Seems super inefficient to me.
Why you would want to use blockchain is a good question too. Especially since some games that utilize blockchain don't actually want them to be decentralized. Some would say for security, some would say for interoperability, some would say specifically for the monetization. Solid question, and I would suspect if you asked 5 different developers you'd get 5 different answers.
Isn't the point of the block chain that it's decentralized? I'm not super savvy about this stuff, but I was under the impression that the benefit of using block chain was so you had to verify every transaction through a series of chosen machines or whatever you call the person that gets to verify the block?
I guess what I'm wondering now is what would be the functional difference between a centralized block chain ledger and a traditional database?
I'm still confused. Like, why do you want a smart contract on a ledger to track ownership of virtual items in a game vs just a centralized database?
Take, I dunno, Everquest or whatever. How to you make a game that's both affordable enough for mainstream appeal and financially sustainable if you have to verify every item transfer and you have to pay to mint a new NFT for every trash item. How do you stop bottlenecks in block verification? People aren't gonna want to wait to trade. Seems super inefficient to me.
Why you would want to use blockchain is a good question too. Especially since some games that utilize blockchain don't actually want them to be decentralized. Some would say for security, some would say for interoperability, some would say specifically for the monetization. Solid question, and I would suspect if you asked 5 different developers you'd get 5 different answers.
Isn't the point of the block chain that it's decentralized? I'm not super savvy about this stuff, but I was under the impression that the benefit of using block chain was so you had to verify every transaction through a series of chosen machines or whatever you call the person that gets to verify the block?
I guess what I'm wondering now is what would be the functional difference between a centralized block chain ledger and a traditional database?
I believe that a tru blockchain cannot be corrupted.
I believe that is the strength of blockchain and people are using that trait to sell snake oil.
I'm still confused. Like, why do you want a smart contract on a ledger to track ownership of virtual items in a game vs just a centralized database?
Take, I dunno, Everquest or whatever. How to you make a game that's both affordable enough for mainstream appeal and financially sustainable if you have to verify every item transfer and you have to pay to mint a new NFT for every trash item. How do you stop bottlenecks in block verification? People aren't gonna want to wait to trade. Seems super inefficient to me.
Why you would want to use blockchain is a good question too. Especially since some games that utilize blockchain don't actually want them to be decentralized. Some would say for security, some would say for interoperability, some would say specifically for the monetization. Solid question, and I would suspect if you asked 5 different developers you'd get 5 different answers.
Isn't the point of the block chain that it's decentralized? I'm not super savvy about this stuff, but I was under the impression that the benefit of using block chain was so you had to verify every transaction through a series of chosen machines or whatever you call the person that gets to verify the block?
I guess what I'm wondering now is what would be the functional difference between a centralized block chain ledger and a traditional database?
I believe that a tru blockchain cannot be corrupted.
I believe that is the strength of blockchain and people are using that trait to sell snake oil.
Imho
what if it was designed corrupt from the beginning? A master hash or some other back door.
i agree with the snake oil but a system designed by snakes only works for snakes.
I'm still confused. Like, why do you want a smart contract on a ledger to track ownership of virtual items in a game vs just a centralized database?
Take, I dunno, Everquest or whatever. How to you make a game that's both affordable enough for mainstream appeal and financially sustainable if you have to verify every item transfer and you have to pay to mint a new NFT for every trash item. How do you stop bottlenecks in block verification? People aren't gonna want to wait to trade. Seems super inefficient to me.
Why you would want to use blockchain is a good question too. Especially since some games that utilize blockchain don't actually want them to be decentralized. Some would say for security, some would say for interoperability, some would say specifically for the monetization. Solid question, and I would suspect if you asked 5 different developers you'd get 5 different answers.
Isn't the point of the block chain that it's decentralized? I'm not super savvy about this stuff, but I was under the impression that the benefit of using block chain was so you had to verify every transaction through a series of chosen machines or whatever you call the person that gets to verify the block?
I guess what I'm wondering now is what would be the functional difference between a centralized block chain ledger and a traditional database?
I believe that a tru blockchain cannot be corrupted.
I believe that is the strength of blockchain and people are using that trait to sell snake oil.
Imho
what if it was designed corrupt from the beginning? A master hash or some other back door.
i agree with the snake oil but a system designed by snakes only works for snakes.
If the blockchain can be corrupted, than it’s not a true blockchain.
All im saying is that it has a purpose. Just like in lord of the rings everyone thought the rings served them, until they didnt.
i can see the blockchain serving a similar function. Getting too technical will only blind you to its purpose. Doubtful anything about it is for your benefit.
Like if you own Disney Dollars at the theme park, and lets say any item you buy they give you your change in Disney Dollars, as long as you're within the Disney property everything you buy uses that system, but the moment you step outside of it, what are the dollars worth?
So if I make millions in crypto, and then buy a Tesla, the money I made to buy the car is tax free because it never passed through USD?
That's different. A tesla isn't a virtual good within a closed ecosystem. You would then be taxed on the price of the car.
Equally so if you bought a sandwich with bitcoin. You'd be taxed on the cost of the sandwich.
Otherwise if you made "millions" on crypto today and the market crashed tomorrow, how many millions would you be taxed on?
Sales tax, yes, but I'm talking income tax.
So depending on where you live, this can completely change. In most areas crypto tokens are considered property. The same with NFTs in some countries, and it can vary based on states in the US too.
So, yes you would pay sales tax, but you'd also likely have to pay additional fees related to the amount you pulled out, AND the gas fees associated -- UNLESS you already paid taxes based on the initial amount you spent.
It's all about what your country requires, but generally, crypto currency and game crypto are different in a few different ways.
So in instances where NFTs are taxed as property, crypto you earn inherently doesn't have a floor price, so you can't determine a worth to claim until its sold.
There are areas where NFTs that are gifted or airdropped have instances where the governmet would attempt to claim property tax on those items, but in the event this happens, it's usually a floor price, which is usually extremely low.
You do pay income tax on crypto you cash out, and that includes for cars.
Sure, this is all subject ot change. But in play to earn games you only pay taxes when you sell or swap it for goods based on your profit.
Again I've been part of this crypto world for a couple years now and where I am, my tax accountant went through all of my holdings. Game crypto wasn't even a factor since I hadn't sold or swapped any of it.
I understand what you are saying and yes, in the US your STATE income tax liability will change, just like anything else related to your State, but your Federal will not. Also, I do not know if it is settled as to WHERE your item is earned. Did you earn it in Florida where you live or did you earn it in Seattle where the server resides, or did you earn it in Canada where the company's address is?
And remember, while what you are discussing is items you BUY with crypto... If there is an NFT drop (Sword of Doom) and if that Sword of Doom has a value that they can estimate, then you owe tax on that regardless of whether you sell it or not. These should be treated as Collectibles and taxed on perceived value at receipt.
You will 99% get away with non-reporting now... but in the future I am 100% confident that they will enforce it. Just like they mandate Amazon and online retailers collect sales tax now.
This is completely dependent on whether the "drop" was airdropped or a drop from within a game, and what the drop corresponds to.
For example, as I said I have several blankos and some of them are given through prime, but the most recent one given out hasn't even been listed or sold on the market at all. Not a single one. There would be no decisive taxable amount to pull from.
It could be murky, but as of right now, when I do my taxes, it is significantly less murky as long as I'm not selling them.
Now if I turn around and sell that blanko for 10 grand, well, yeah, that's going to cost me. Some gaming NFTs already do charge sales tax on an initial purchase, but they don't when you resell. You wouldn't have to pay sales tax on that, as it would be considered a "private sale" even if the sale is on a proprietary market.
Honestly I do hope they regulate it in the future.
The main issue right now for me isn't the costs, or the taxes, or the implications, it's how difficult it is for the average gamer to understand it and get involved.
Pretty much every blockchain game that tries to leverage NFTs or bridge to main net is so freaking difficult to understand with the multitude of wallets, main net changes, purchase prices with gas fees.
Even if everyone was on board with the idea of blockchain gaming, trying to get into some of these games is way too convoluted for the average gamer they would HAVE to pay you or it isn't worth the effort.
They always did collect sales tax for online shopping. The difference was whether you were an international or a domestic customer.
Now it no longer matters, I pay Canadian sales tax no matter the origin of the online retailer.
Not here in the US. We were supposed to "self-report".. umm... yeah
Comments
Take, I dunno, Everquest or whatever. How to you make a game that's both affordable enough for mainstream appeal and financially sustainable if you have to verify every item transfer and you have to pay to mint a new NFT for every trash item. How do you stop bottlenecks in block verification? People aren't gonna want to wait to trade. Seems super inefficient to me.
So, the cost to mint NFTs can be essentially free if you aren't minting them on one of the popular chains.
It doesn't necessarily take a lot of time to mint them either.
Why you would want to use blockchain is a good question too. Especially since some games that utilize blockchain don't actually want them to be decentralized. Some would say for security, some would say for interoperability, some would say specifically for the monetization. Solid question, and I would suspect if you asked 5 different developers you'd get 5 different answers.
The next issue is, how do you make the items affordable. Man, that's a tough question, because items from the developer are generally affordable in many cases, but once "players" get their hands on them, it's a completely different story.
I find it really funny that people are worried about what the developers will do with NFTs when the players mark up prices way worse. But then again that's probably in part what the developers hope for, so they get their percentage. But I digress.
As for bottlenecks, it depends on the protocol and implementation. Some protocols have a pretty robust throughput. It would nearly a hundred thousand transactions a second prolonged over a period of time to really cause a bottleneck. Not really unheard of with a high number of players, but not something I think developers are worried about right now.
But you've seen this in games with auction houses too. If auction houses aren't saturated with items, there are always sellers looking to make as much as anyone is willing to pay.
Companies certainly are bad with monetization a lot of the time, but players so far have been worse. Devs at least try and make some purchases accessible, players don't care if they buy it all and price you out, as long as someone buys. They owe you nothing whereas developers at least attempt to be inclusive for the sake of the average player.
Thats one of my main concerns with this trend.
So with all these custom chains, how do we know who’s honest and who’s not?
How could anything go wrong?
"Be water my friend" - Bruce Lee
Some years back, a California couple found a stash of gold coins in their back yard.
By stash, I mean $10 million worth.
They had to pay taxes on its value, even if they didn't sell it. It was "taxable income."
Here's an article on it.
But also notice that "gift taxes" might be the IRS's ruling in these game NFTs.
Funny, because in that case, it's the giver of the gift that owes the taxes.
The "game" companies may be shooting themselves in the foot.
https://www.forbes.com/sites/robertwood/2014/02/26/couple-finds-10-million-in-gold-coins-taxes-take-half/?sh=6fb7af4d48f9
Once upon a time....
There are some that are completely useless, fabricated only to take advantage of people.
Then there are some with utility.
Then there are others that are meant to be a currency.
Others that are meant for governance of the protocol.
I don't blame anyone for being skeptical and wary of it at all. My advice is to stay far away from anything you're not comfortable with.
And only every "buy into" a game that is something you'd play even if NFTs and blockchain weren't a part of it.
And I fully understand that those options are extremely scarce, if any exist right now.
It was already decided that many of the art NFTs are taxed as property, and technically there's a case for capital gains taxes of tokens or nfts if there was substantial appreciation when sold.
Gaming nfts are a little different though. Since they differ from case to case there's no real precedent for their worth, which is why they are more easily taxable on sale.
But unless you're a big time investor even hundred or thousand dollar sales of nfts would be unlikely to be taxed unless you cashed them out,, though it would still be smart to report them.
Most people don't even bother though.
All time classic MY NEW FAVORITE POST! (Keep laying those bricks)
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Here's a listing to some sold by Pantheon Online that don't appear to be taking off.
https://opensea.io/collection/visionary-realms-pantheon-store
"True friends stab you in the front." | Oscar Wilde
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Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
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"This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon
The thing about crypto markets is you can generally see what's been sold and for how much even if you don't know who it was sold to.
Tbh I'm no different though. I listed an asset for insanely high, I know it will never sell for that price, but I can't use every asset I own so if someone wants to pay an insane price for it I won't complain. If I was honestly trying to unload it though I would have put something way more reasonable. But as high as I priced my asset, there were dozens more two or three time the price, with worse mint numbers.
You guys are putting a bullseye right on yourselves.
"Be water my friend" - Bruce Lee
"Be water my friend" - Bruce Lee
Some have even bought in far more than I'm comfortable with. China for example went ahead and outlawed mining and other currencies while they started their own digital yuan built on a centralized blockchain.
It's happening one way or another around the globe. Remember when you wanted to be the monopoly banker? Might be way late to that game.
They need new sin taxes.
NFT’s
Not like anybody needs them, in fact many in the public might even be supportive of taxing stuff like this.
Time will tell
Edit: Thinking more on it, why don’t we drop the tax on things we need and put that tax on things that nobody needs.
That could be popular.
"Be water my friend" - Bruce Lee
The taxation will occur at the point of sale.
"Be water my friend" - Bruce Lee
Isn't the point of the block chain that it's decentralized? I'm not super savvy about this stuff, but I was under the impression that the benefit of using block chain was so you had to verify every transaction through a series of chosen machines or whatever you call the person that gets to verify the block?
I guess what I'm wondering now is what would be the functional difference between a centralized block chain ledger and a traditional database?
I believe that is the strength of blockchain and people are using that trait to sell snake oil.
Imho
"Be water my friend" - Bruce Lee
i agree with the snake oil but a system designed by snakes only works for snakes.
"Be water my friend" - Bruce Lee
i can see the blockchain serving a similar function. Getting too technical will only blind you to its purpose. Doubtful anything about it is for your benefit.
"Be water my friend" - Bruce Lee