Patent application describes a virtual currency that may offer tax benefits and ways to improve domain name leasing.
Epik founder Rob Monster and SVP John Lawler have filed a patent application titled “System and Method for Domain Leasing, Acquisition and Development Incorporating a Virtual Currency Platform”.
You may recall that Epik started a virtual currency called Epik Bucks. These could be used to buy domain names, purchase web design packages, and other domain related services.
The patent application (pdf) notes that, by using a virtual currency, domain name traders could potentially avoid/defer taxes on domain sales:
In order to minimize this loss, there is a need for an alternative payment method, such as using virtual money as currency for any and all domain-related transactions. The virtual money can be used to purchase other domain names, related services, and related products. In some cases, the transactions using virtual money can qualify as a tax deferred “like kind exchange.” In these situations, the user may not be obligated to pay taxes for each transaction relating to the purchasing and selling of domain names allowing the user to realize the full value of his transaction.
The application also describes a method of handling a domain name lease, whereby the domain is placed into a locked state for the duration of the lease.
This patent application was filed in March 2013, but follows a provisional patent application filed in March 2012.
Epik owns a domain name registrar and marketplace and also offers web development services.