Can an “NFT” Be Given to the Bride at a Wedding?

At a wedding, would we be surprised if we heard an announcement like, “From the groom’s mother to the bride, one “CryptoPunks” NFT”? The answer for most of us, even for the bride, would probably be “yes”. To mediate between the groom who says, “I gave the bride a unique NFT” and the mother-in-law who laments, “What is this, groom?”, let’s take a short journey into the world of NFTs. After all, when the environment is virtual, traveling is free. At least for now… With the definition of non-fungible token (NFT), it seems like the mother-in-law is right in her initial worries. Who would want an NFT instead of a tangible, shiny golden five-in-one? Let’s say she bought an NFT, what will she call this asset in the financial statements? Fixed asset, financial asset, or intangible asset? The Short Story of NFT According to The Block Research data, the NFT market was $13.7 million in the first half of 2020, reaching $2.5 billion in the first half of 2021. According to CNBC news, the figures reached $10.67 billion in the third quarter of 2021. So, as you can see, the groom, who heard that Mike Winkelmann, known as Beeeple, sold his NFT called Everydays: The First 5000 Days for $69 million, might have thought he bought a unique gift for the bride. The ironic part is that the most important feature that distinguishes NFTs from other cryptocurrencies is that they are “unique” or “one-of-a-kind.” Why? Because while one Bitcoin is the same as another Bitcoin, the NFT given to the bride and the NFT you hold are different. Although NFTs, generally standardized and recorded with Ethereum blockchain and ERC-721 and/or ERC-1155, still cannot be bought and sold with Turkish Lira or Euro, and the pricing depends on gas fees due to Ethereum (EHT), causing great concern for both the bride and the mother-in-law, the NFT market continues to grow. Who would have thought that Kevin McCoy’s blue-red octagon (“Quantum” NFT) created in 2014 would one day create such a market? In the meantime, our groom has reassured his prospective mother-in-law’s concerns by stating that he could sell the NFT he gave to the bride in marketplaces such as OpenSea, SuperRare, Nifty Gateways, if necessary, instead of an auction. In light of recent information, the bride’s mind was at ease, but the mother-in-law, with worried glances, asked the groom, “My son, you did well, but what will we call this NFT now? What will its value be?” NFT in Financial Statements The answer to the question of what we will call this NFT will differ from the perspective of buyers/holders, issuers, and marketplace players. When we look at our story from the perspective of the bride holding the NFT, the accounting treatment in the financial statements will also change depending on the rights and obligations provided by the NFT and the purpose for which the NFT was acquired. Even if we have a record on the blockchain with the NFT we acquire, this may not directly give us ownership rights or intellectual property rights (IP rights) related to this underlying asset. For example, while CryptoKitties give the NFT owner commercial transaction rights under the name “kitty”, NBA Top Shot NFTs do not provide such commercial transaction rights. NFTs, which appear in a wide range of fields from games to art, from sports to collections, and even real estate, will be reflected in financial statements in line with the control and rights they provide to the buyer. The digital reflection of real estate, which is owned with i…