Experts Explain Blockchain Technology to Root Israel

Mon Mar 19 18:53:40 CST 2018

Blockchain technology is widely used in Israeli politics and business because it is designed to reduce fraud and corruption

The Israeli government has always been committed to promoting an open government policy. Its recent innovation in communications and information technology can greatly improve its parliamentary democracy. This approach strengthens the public’s right to know about the decision-making process, improves government services, and increases trust between the government and citizens.

The Israeli government has established cooperation with enterprises, educational institutions, and funders to promote and continuously develop innovative technologies and sciences. The Israel Blockchain Association has become a bridge between these partners to communicate on blockchain technology initiatives.

CoaliChain, a start-up blockchain company, is designing an interactive political platform that aims to promote open government policies and remove barriers between electors and elected people. Based on interactions and dialogues between citizens and governments, the platform produced heat maps and related charts to convey the interests of citizens to politicians so that politicians can answer questions of their voters in real time.

The data collected by the system tracked the company’s influence and the frequency of payments to politicians. The system uses smart contracts to force politicians to implement commitments they make, such as budget proposals and policies. According to the company's website announcement, the first quarter of 2018 will be released on the test version. The full official version of the integrated blockchain application will be launched by the end of 2018.

The Democracy Earth Foundation in Colombia launched Plebiscito Digital, a blockchain-based digital voting platform, and collaborated with several civil society organizations to allow Colombians from abroad to conduct a symbolic vote through the platform, which Sierra Leone has already held. The world’s first presidential poll based on blockchain technology.

According to Bloomberg, Israel is ranked tenth in the world's most innovative country, ahead of the United States. This is because it has the highest proportion of engineers and scientists, and it is also one of the countries with the most technologically advanced technology startups. The smart phone electronics industry has promoted technological advancements and has also accelerated the use of unmanned aerial vehicles (UAVs) in business.

The initial purpose of the drone was because of military exercises, which could reach dangerous places that humans could not reach. Over time, their scope of use has been extended. They have been used in military applications, such as aerial views of complex operational tasks and monitoring, investigation, and implementation of related intelligence work, such as the Iranian spy shot down by Israel in Syria. machine.

With the passage of time, the demand for drones is further extended. Drones have begun to be used for a variety of other purposes, including inspections, investigations, surveillance, maintenance of security, delivery of items, and access to the wireless Internet.

Israel is the leading drone exporter. Airobotics is a start-up company headquartered in Pektikowa, Israel, and is the first company in the world to obtain the CAAI commercial flight authorization.

For drones for commercial purposes and the goods they carry, another company, Applied Blockchain, a start-up company created by Adi Ben-Ari, developed blockchain-based drone registration. Ben-Ari explained:

The blockchain platform brought drone operators, drone manufacturers, and regulators together as they came together for the common purpose of data source authenticity. Data from drones during flight can be downloaded to the same distributed ledger and visualized with interactive maps.

Since these data are attached to registered drones, aeronautical authorities can map the flight patterns of certain drones, all the drones of specific operators, and even all the drones of a certain manufacturer. Flight maps, all of which are plotted on a map in real time to ensure the safe operation of drones in the airspace. This access to data is a transformation of traditional systems. Traditional systems inherently rely on a single trusted party to maintain data. This shift can improve the accuracy of the data.

Israel has an advanced technology market economy and it plans to issue government-backed cryptocurrencies. At present, cryptocurrency is regarded as an asset of the Central Bank of Israel.

The Israeli Ministry of Finance and the Central Bank of Israel have expressed interest in promoting government-backed cryptocurrencies. Their purpose is to minimize corruption, money laundering, and tax evasion. The recent deputy in Netanyahu, Israel, was investigated for corruption. This is particularly important for Israel to reduce corruption.

Israel limits the number of banks, regulatory agencies and financial infrastructure due to the size of its market. Hapoalim Bank and Leumi Bank monopolized the industry due to the support of local regulators.

Hapoalim Bank accepted blockchain technology, and the Israeli Supreme Court ruled that Leumi Bank is prohibited from restricting corporate bank accounts from being linked to cryptocurrencies or the blockchain industry. The Israeli Supreme Court also dismissed the appeal of the bill banning binary options.

Israel is a fintech start-up country with many disruptive companies such as Bancor, Zen, and DAGlabs. Among them, DAGlabs is developing a technology to improve the expansion of cryptocurrency. Although there is no ICO regulation, the head of the Israeli Securities Authority (ISA) has set up a committee to assess Israel’s need for ICO regulations.

Taxes on cryptocurrencies

According to Yitzchak Chikorel, director of international tax department, tax partner and certified public accountant at Deloitte and Touche, Israel, the Israel Revenue Agency has listed cryptocurrency as an asset (a tax notice was issued in May 2018). Therefore, buying and selling cryptocurrencies is tax-related. Behavior, which is considered as a barter transaction, generates a corresponding capital gains tax on the value of the assets traded.

If a cryptocurrency is held by its owner as a capital asset, the proceeds will be classified as capital gains and taxed at approximately 46% (23% capital gains tax, 30% dividend tax) on the company and Individuals are levied at 25%. If the proceeds from processing cryptocurrency are considered part of a business activity, such as mining, individuals will be taxed at progressive rates, with a tax rate of 47% and a corporate tax rate of 46%.

Foreign investors can be tax exempt under the tax terms and if there is no tax exemption clause, they will be taxed as Israeli companies or Israeli individuals. In some cases, the proceeds that ICO issuers receive from investors on the day of the ICO should not be taxed on the same day, but will be deferred.