Blockchain technology and the consequential cryptoeconomy it enabled, may be described as one of the biggest digital revolutions since the internet. We have seen web technology shift from its beginnings of ‘read’ only (web1) to ‘read-write’ (web2). Through the development of blockchain technology, this has further transitioned the internet to web3 – ‘read-write-own’. Yet this burgeoning innovation space also deeply disrupts the tax system and government revenue collection. How do we operate, and what needs to change, in an era that is ultimately ‘Read-Write-Own-Tax’?
When the internet emerged, ‘web1’ allowed for mainly one-way information distribution. Users could mainly surf the web and read web pages. ‘Web2’ shifted web platforms to “read-write”. This allowed for two-way information distribution and engagement – the birth of content creation, YouTube, and social media.
However, ‘web3’ represents a substantial shift to interactive distribution of information, where coordination can occur without any trusted intermediary such as a government or organisation required to verify. The blockchain-based digital assets or tokens (essentially digital representations of value) have created the capacity to undertake economic activities in novel ways. Critically, we now have the capacity for property rights and ownership – “read-writeown”.1 How does a tax system created for traditionally physical concepts of ownership adapt and apply to digital assets?
The potential of this evolving technology and the tax consequences are not just restricted to business. The cryptoeconomy permeates across all
