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Money Is Fungible. NFTs Are Not. | Insights – Holland & Knight

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“Fungible” is an adjective that describes something easily capable of mutual substitution, such that one part or quantity may be exchanged by another equal part or quantity. Money is fungible. It is designed to be completely interchangeable: one dollar always equal to another dollar. Cryptocurrencies are also fungible and designed to operate similarly to fiat currencies. In contrast, NFTs are not.
NFTs are non-fungible tokens, so they are explicitly designed to be unique assets that are irreplaceable and not interchangeable. An NFT is a token built on a blockchain and “minted” using the same technology as cryptocurrencies, but they represent a distinctive underlying asset, which renders them non-fungible in character.
Each NFT fundamentally has an identifier, metadata and a smart contract. Beyond those very basic parameters, the possible applications of NFTs vary widely. They are differentiated by aesthetic and arrangement. Conceptually, you should think of an NFT as a deed that utilizes blockchain to track a real-world asset, but the stylistic aspect of NFTs, like art, is practically limitless.
NFTs were created as a better means of tracking chain of title, and they accomplish this goal exceptionally well. The immutable nature of blockchain means title is more securely and reliably recorded than by other currently existing means.
Like a deed, an NFT tracks ownership, but for most the real question is: ownership of what? The simplest answer is: a digital collectible embodied in an electronic file. The general consensus is that NFTs (associated with art) should gain some collectible or cultural value over time.
An NFT is a digital asset in and of itself, but it is fundamental to recognize that NFTs are distinct from the underlying work of art or other asset. Rather, an NFT is representative of the asset. Just as nothing prevents an artist from making and distributing reproduction of an original work of art, they are not preventing from minting numerous NFTs of that piece of art.
Minting an NFT fundamentally requires an identifier and coding. NFTs can exist only on blockchains with an NFT standard, such as Ethereum, which is a blockchain that can be programmed with a smart contract. Ethereum is considered the NFT standard, and it is the most popular blockchain for NFTs. The underlying asset is disconnected from the NFT. The following items have been minted into NFTs:
An NFT ledger may be programmed to credit the original artist/creator, indicate copyright ownership or contract for commissions or royalties. Copyrights and copyright licenses may also be incorporated into smart contract aspects of the NFT ledger. Whether an NFT purchaser is obtaining anything other than the right to use/display the NFT is dependent on the particulars of the NFT sale. If you intend to purchase copyrights or enter into a license related to an NFT, you should consult an intellectual property attorney with knowledge of NFTs.
Ownership mechanics of NFTs operate similarly to ownership of cryptocurrencies. NFTs transactions mostly occur within NFT marketplaces that are specifically designed for sale and purchase of NFTs. NFTs are purchased with cryptocurrency, held in a wallet and programmed on the blockchain.
If you own an NFT, be sure to tell your estate planner and, conversely, estate planners should inquire about NFT ownership upon intake and when updating estate plans. Because NFT ownership is recorded on the blockchain, there are special considerations and provisions that must be taken in order to guarantee that they pass to desired heirs. Simply providing an intended heir an electronic NFT file without more would be akin to providing keys to a house without more – i.e., without the deed. It is insufficient to transfer ownership. A change in NFT ownership must be entered as a transaction on the blockchain. Sophisticated planners can ensure the proper transfer will occur.
The value of an NFT is demand-based. In terms of value, you can think of an NFT like a baseball card. Some are very valuable, and some are not. Instead of having a baseball card in hand, an NFT owner has a digital file. Similar to baseball cards and artwork, rarity or uniqueness is directly related to desirability, demand and value.
Other issues with valuing NFTs and their ultimate taxation include: 1) the NFT’s fundamental tie to the blockchain it is programmed on – e.g., if programmed on Ethereum, the value of Ether is linked to the NFT and itself would be subject to possible gain taxation; 2) the potential status of some NFTs as collectibles, which would subject the NFT to the higher 28 percent long-term gains treatment; and 3) domicile of an NFT, which is not yet defined and thus could be transferrable to other tax jurisdictions, etc.
While the intended use of NFT is deed replacement, the creative world has taken hold of NFTs. Some practitioners think of NFTs as a new genre of copyright that recognizes the value of token rights in copyrighted works.
Emerging uses of NFTs include linking an NFT to original artwork and its creator by including authorship credit, reserving moral rights, automating royalties on future sales, and providing additional services or subscriptions, etc., in the smart contract. For example, a musical artist might sell an NFT that comes with a subscription to all music content generated by that artist in the future. Copyright owners who mint NFTs of their own artworks may include assignment or transfer of all or a portion of the associated copyrights along with the NFT purchase. NFTs have also been utilized as indicators of membership or to allow access to an exclusive club. These are just a few creative uses of NFTs, and there is no consensus on intended future use of NFTs at this time.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.
Please note that email communications to the firm through this website do not create an attorney-client relationship between you and the firm. Do not send any privileged or confidential information to the firm through this website. Click “accept” below to confirm that you have read and understand this notice.

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Cardano (ADA) and Dogecoin (DOGE) Volatility Leads Investors To Buy Flasko (FLSK) | Bitcoinist.com – Bitcoinist

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Some cryptocurrencies are stable, but they are not capable of delivering the returns that investors are looking forward to having. Cardano (ADA) and Dogecoin (DOGE) are great examples of cryptocurrencies. Due to the same reason, investors are now looking for alternative cryptocurrencies like Flasko.
Dogecoin (DOGE) Is Hanging On
There is no demand at all for meme coins as of now. However, the best meme coin, Dogecoin (DOGE), is still hanging on.
Dogecoin (DOGE) completed a $44 billion acquisition last month. And Twitter is looking forward to working closely with Dogecoin (DOGE) as well. Hence, Dogecoin (DOGE) will be able to stay while other leading cryptocurrencies struggle.
Cardano (ADA) Might Bounce Back
Another major cryptocurrency that investors are mindful of is Cardano (ADA). Cardano (ADA) recently went through a massive update that helped investors to keep better hopes for the future of cryptocurrency.
Cardano (ADA) is gaining value along with the increasing popularity of Metaverse. At the end of the current bear market, Cardano (ADA) is expected to become one of the fastest-growing cryptocurrencies to be made available out there.
Flasko (FLSK) Is Doing Well
Despite the bear market, Flasko is doing good as a new project because of its unique and innovative concept. Flasko enables people to purchase luxurious and rare wines, champagne, and whiskey. The purchases are made digitally in the form of NFTs. However, there will be a physical allocation of the bottles, which users can get when they purchase the full NFT.
The phase 2 presale of Flasko project recently started at $0.085. This value is further expected to increase exponentially in early 2023.
Website: https://flasko.io
Presale: https://presale.flasko.io
Telegram: https://t.me/flaskoio
Twitter: https://twitter.com/flasko_io
 
Disclaimer: This is a paid release. The statements, views and opinions expressed in this column are solely those of the content provider and do not necessarily represent those of Bitcoinist. Bitcoinist does not guarantee the accuracy or timeliness of information available in such content. Do your research and invest at your own risk.
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© 2022 Bitcoinist. All Rights Reserved.

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Here's Why This Rare Bored Ape NFT Just Sold For $933,792 In ETH – Ethereum (ETH/USD) – Benzinga

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The Bored Ape Yacht Club (BAYC) is an exclusive community for holders of the ape and mutant themed NFT collections on Ethereum's blockchain. Commonly referred to as the Bored Apes, only 10,000 generative art pieces will ever be in existence.
What happened: Bored Ape #1268 just sold for 780.00 ETH ETH/USD ($933,792 USD). The value of Bored Apes is typically determined by the Ape's attributes, with the laser eyes, crown, and golden fur traits being the most coveted.
Here are a list of its attributes and how many others have the same trait:
Why it Matters: Bored Apes are the ultimate store of culture for NFT collectors. The NFT collection has gained huge influence in 2021, with an ever growing list of top tier celebrities making apes their profile pictures on Twitter. With the recent explosion in popularity surrounding the Metaverse, rare blockchain-based avatars are all the rage for those looking to flex online.
Being a member of the Bored Ape Yacht Club is not just about flexing online. Yuga Labs, the creators of the Bored Apes throw exclusive parties often with free private performances from members of the club such as Lil Baby. Other notable celebrities in the club include Post Malone, Stephen Curry, Dez Bryant, and Jimmy Kimmel.
Yuga Labs also created another NFT collection known as the Mutant Apes, which also provides membership to the elusive club. There are a total of 20,000 Mutant Apes, and the price floor is historically lower than the Bored Apes.

See Also: NFT Release Calendar and Best NFT Projects of 2021
Data provided by OpenSea.
Checkout the full Bored Ape Yacht Club collection
You can learn more about this NFT here.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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How to buy NFTs: Trojans' venture Moonlight aims to make it easier – USC News

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Blake Asherian realizes that most people don’t have a spare $60,000 just lying around — which is about what you’d need to buy an NFT (non-fungible token) of any real value. He also understands that at a broader level, most people don’t even know what an NFT is or how to buy one.
That’s why Asherian and three other Trojans — Gabriel Perez, Matthew Hausman and Can Toraman — have started Moonlight, a fractionalized NFT marketplace that allows users to buy, own and sell fractions of an NFT in a simple and user-friendly way.
Moonlight — Blake Asherian, CEO and founder; Matthew Hausman, frontend architect; Can Toraman, technical advisor; and Gabriel Perez, product and community (clockwise from top left) — allows users to buy, own and sell fractions of an NFT in a simple and user-friendly way. (Photos/Courtesy of Blake Asherian, Matthew Hausman, Can Toraman and Gabriel Perez)
Despite gaining significant traction within the last year, NFTs are still in their infancy, and there are financial risks involved given their uncertainty and high price tags. Moonlight hopes to remedy that, or at least help bridge the gap between most people and this emerging space.
“If the average personal income is 63K, and the average cost of a blue-chip NFT is 51K, that’s a big problem,” said Asherian, a business administration undergraduate in the USC Marshall School of Business.
“Part of the reason why people are not as prone to getting into NFTs is because there’s such a high barrier in terms of knowledge, and technology,” Asherian added. “We’re breaking down that barrier.”
The concept of Moonlight is simple: A group of people will choose an NFT they want to crowdfund, and once the funding goal is reached, each crowdfunder becomes a co-owner. From there, co-owners can buy and sell their fractions on Moonlight’s platform.
Though the platform might be simple — or at the least the goal is to make it as simple as possible for people — the concept of an NFT isn’t widely understood and can seem a little daunting.
Essentially, an NFT is a unique piece of digital art that is certified using blockchain, an immutable record of ownership. The non-fungible part means that no two items are alike or equal. NFTs function similarly to how people collect and sell art or trading cards. Some items are worth next to nothing, while others fetch millions of dollars.
Moonlight’s goal is for people to have the opportunity to own fractions of NFTs of real value, which is why the company focuses on “blue chip” — or most valuable — NFTs, like Bored Ape or CryptoPunks, which have the potential to provide long-term returns and can easily go for six figures.
But why would a digital image of an ape or a pixelated person be worth hundreds of thousands of dollars?
Well, why would someone pay over $7 million for a baseball card? Or thousands for any of the “contemporary art” listed on Sotheby’s?
All are fair questions, and the answers could vary depending on the person or item. The common factor is that collectors feel that these are assets that will increase in value. NFTs are just the newest version.
I would always argue with people: What is the difference between your trading card and an NFT? They took a picture of a guy and then put it on a piece of paper, and it has value somehow.
Matthew Hausman, Moonlight frontend architect
“I would always argue with people: What is the difference between your trading card and an NFT?” said Hausman, Moonlight frontend architect and 2021 USC Viterbi School of Engineering graduate.
“They took a picture of a guy and then put it on a piece of paper, and it has value somehow.”
For those who only read certain media accounts, it may seem like NFTs and the cryptocurrency used to buy them are a losing venture, and they might be for some. However, the creators of Moonlight were quick to point out that there are a lot of financial risks out there, and their platform’s crowdfunding feature can help eliminate some of those potential dangers.
With Moonlight, crowdfunding is key. Users select an NFT and then have a certain number of days to raise the funds. If the money is raised in time, the NFT is moved to the Moonlight platform where people can buy and sell shares. If the funds are not raised in time, then everyone who contributed gets their money back.
“No other protocol allows you to literally raise funds to buy cool stuff together,” Asherian said. “The secret sauce here is having a technology that can allow any number of people to put their money into something and as a group get anything they want.”
The next concept, fractionalization, is not necessarily new, but how Moonlight allows users to fractionalize is in direct response to a large issue within the NFT community. Right now, someone who owns an NFT can fractionalize it and sell those fractions at whatever price they see fit, regardless of the actual market value. People who are knowledgeable about and can afford a six-figure blue-chip NFT don’t have a need for fractionalization. So, the practice can take advantage of those who are new to the space — a problem that Moonlight wants to correct.
“For a bunch of people who are just entering the space of NFTs, how can they trust that that valuation is true?” Asherian said. “They don’t know enough about the protocols or the NFT collections. They’re kind of swayed in an untrue direction and it’s unfair to them.”
Asherian and his team at Moonlight emphasize that their platform is truly for everyone. NFTs — and even the cryptocurrency used to purchase them — might seem daunting for those who aren’t already in that world, but their hope is to take away some of that hesitance.
“At the end of the day, if you look at who’s into NFTs, it’s that 1%, right?” Asherian said. “We want to tap into the 99%, so we have to create a product that’s comprehensive for that group, which not too long ago included myself.”
The initial concept for Moonlight came to Asherian in late 2021, but his interest in NFTs started around two years ago when he was working for his cousin, Sean Rad, the founder and former CEO of the dating app Tinder. Rad — at one time at USC student — had invested in Genies, an avatar technology company, and Genies co-founder Akash Nigam started talking to Asherian about the company’s venture into NFTs. Though Asherian knew nothing about NFTs or blockchain, the concepts piqued his interest.
Soon after, he left his jobs to buy and sell NFTs full time. He admits that there were some definite growing pains early on because of the high barrier to entry, but those missteps put him in a position to succeed down the road.
He started drafting up the concept for Moonlight while studying abroad in Paris last year. He connected with fellow Trojans abroad which led to even more connections when he returned stateside. Asherian credits USC with introducing him to Perez, Hausman and Toraman, and making Moonlight what it is today.
Ever since I was a freshman, I’ve always heard that term ‘Trojan Family,’ but then I was really able to witness what it can do.
Blake Asherian, Moonlight CEO and founder
“I really believe in the Trojan Family and what it offers,” Asherian said. “Ever since I was a freshman, I’ve always heard that term ‘Trojan Family,’ but then I was really able to witness what it can do.”
A transfer student from the University of Wisconsin-Madison, Perez said his interest in NFTs has been a gradual progression since he was in high school. He started by selling stocks with his friends, and then in college he found a new interest in cryptocurrency.
“I kind of fell in love with the philosophy behind Bitcoin, which is a very anti-centralization of money, anti-central banks, power-back-to-the-people sort of thing,” said Perez, a junior economics major in the USC Dornsife College of Letters, Arts and Sciences.
“Then I learned about Ethereum, which was the first time I realized this has a huge potential to be the currency of the internet in the future.”
Ultimately, Perez, product and community lead at Moonlight, felt that if he wanted to further his career in the crypto world, he’d have to move somewhere where he felt it was more popular and valued. He found just such an innovative environment at USC, where USC Viterbi even offers a blockchain minor.
He came to USC before the fall 2021 semester and joined Blockchain@USC — a student-run organization that engages with blockchain-related topics, develops blockchain applications, and connects with industry professionals — as the director of external relations.
We started talking about fractionalizing NFTs and the ability for smaller capital players to be able to dive into these collections, and I was hooked from there.
Gabriel Perez, Moonlight, product and community
At USC, both within his field of study and social groups, Perez surrounded himself with other like-minded people that shared his passion, which is when he first heard about NFTs and eventually met Asherian.
“We started talking about fractionalizing NFTs and the ability for smaller capital players to be able to dive into these collections, and I was hooked from there,” Perez said.
By the end of the spring 2022 semester, Perez and Asherian had formed the Moonlight team formed and started the work to launch their idea.
The Moonlight crew is aware of some of the sustainability concerns with NFTs, primarily the proof-of-work blockchain system that is used by most cryptocurrencies so that transactions can be processed peer-to-peer in a secure manner without the need for a third party. Proof-of-work consumes a significant amount of energy. Rooms full of computers are needed to run complex mathematical equations, and coolers are needed to make sure those computers don’t overheat. By one estimate, mining 1 Bitcoin consumes as much electricity as a standard American home would use in nine years.
Most NFTs are part of the Ethereum blockchain, which currently uses proof-of-work. However, next month the Ethereum “Merge” will shift its blockchain to proof-of-stake, which uses 99.95% less energy by reducing the amount of computational work needed to verify the blocks and transactions that keep the blockchain secure.
“Fingers crossed that ‘Merge’ goes well because it’s a very anticipated catalyst in the crypto world,” Perez said. “If it does go correctly, NFTs are probably not going to have much of an environmental footprint at all, compared to something like a few office buildings downtown.”
But before they get to the point of using more sustainable blockchain, Asherian said they must establish their footing. Moonlight is projected to go live later this fall, and Asherian said once they’ve developed their community and built trust, they can influence people to move towards more sustainable methods.
“When you’re a huge marketplace that everyone starts suspecting has authority within the NFT space, then you’re able to sort of tell them what to do next,” Asherian said. “We really want to be able to gain that authority, and the way to do so is by being transparent, simple and fun.”
Trust and NFTs — or crypto, for that matter — might not go hand-in-hand just yet for much of the general population, but that’s exactly what Moonlight is hoping to fix. They see NFTs as an opportunity not just for those “in the know,” but for everyone.
“We believe there is power in numbers,” Asherian said. “At the end of the day, we want to give power to the people so they can own anything they want, together.”
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