Apple wants to tax all NFT transfers made from an iOS application. Unfortunately, the iPhone maker seems to have misunderstood cryptocurrency and blockchain.
Apple just blocked the latest update from the Coinbase wallet app on iOS. The mobile wallet offered by the American exchange Coinbase enables the storage of digital assets such as cryptocurrencies or coins NFT. Without this update, it will no longer be possible to send NFTs from this wallet, Coinbase regrets.
“If you keep an NFT in a wallet on an iPhone, Apple just made it that much harder to port that NFT to other wallets.”Details Coinbase in a thread on twitter.
You may have noticed that you can no longer send NFTs on Coinbase Wallet iOS. This is because Apple blocked our last app version until we disabled the feature. 🧵
— Coinbase Wallet (@CoinbaseWallet) December 1, 2022
Also read: Mark Zuckerberg on a crusade against Apple’s control of iOS
Apple defends its 30% commission
Questionable : the transaction fees required by the blockchain when sending a non-fungible token to an address. True to form, Apple charges a 30% commission on these fees. To collect its debt, the Tim Cook-led company requires those blockchain fees to be paid through the App Store’s in-app purchase system. Simply put, Apple is asking a Coinbase user to register an NFT on the blockchain…without paying the blockchain fee. It’s obviously impossible. Unsurprisingly, Apple doesn’t appreciate the blockchain’s ability to circumvent the rules of its business.
With this ban, the Cupertino giant is content to apply App Store regulations. In fact, Apple has always recovered 30% commission on all purchases takes place via an application installed from the App Store. This controversial tax is the basis of the business model from the online shop.
At the beginning of autumn, the Californian company also reminded that cryptocurrencies and NFTs do not escape the commission. To sell tokens non-fungible iOS apps should rely on it In-App Purchase System. Everything absolutely has to happen within the application. Apple justifies itself by wanting to protect iOS users.
“Apps can use in-app purchase to sell services related to non-fungible tokens (NFT). Apps may allow users to browse collections of NFTs owned by others as long as they don’t contain buttons, external links, or other calls-to-action directing customers to purchase mechanisms other than in-app purchase »explains Apple further its official website.
Apple’s unreachable demands
As Coinbase points out, the demand is from Apple not compatible with the operation of the blockchain and NFTs. The exchange platform reminds that the in-app purchase system developed by Apple does not support digital assets such as NFTs.
“So we couldn’t keep up even if we tried”says Coinbase.
By blocking the update, Apple appears to be assuming Coinbase is making money from blockchain transaction fees. That’s not the case. In this case, it is not the exchange that collects these fees from users. It’s about inherent costs of running the blockchain. So the money doesn’t end up in Coinbase’s pockets. Fees are paid by individuals who secure the network, such as miners or validators ether.
“It’s like Apple getting a share of the cost of every email sent over open Internet protocols.”compares Coinbase.
For the crypto platform ” Apple has introduced new policies to protect its profits at the expense of consumer investment in NFTs and developer innovation.”. This isn’t the first time Coinbase has pointed the finger at rules enacted by Apple. 2020, Brian Armstrong, founder of Coinbase, already regretted that Apple banned Decentralized Applications (abbreviated as dApps) in its App Store. Again, Apple justified the ban by adding an external payment system to avoid its 30 percent tax.
It is very likely that Apple will apply a similar restriction to other iOS applications dedicated to storing digital assets, such as Metamask or Trust Wallet. In fact, we can expect other players in the ecosystem to resist Apple’s practices in the near future.
Note that Google also claims a 30% commission on sales made through an Android application installed on the Play Store. However, the situation is very different. Unlike Apple, Google allows its users to download apps outside of its store. In addition, the Mountain View giant wants to be more flexible than its rival. It allows, in fact, to step through apps little by little an alternative payment system, starting with Spotify.
Apple and crypto assets, a complicated relationship
Apple entertains an ambivalent relationship with the digital assets provided on the blockchain. In the App Store rules, the Cupertino giant is openly opposed to the launch of crypto assets. The company is evidently aware that cryptocurrencies threaten to weaken the hegemony of its integrated payments system.
By making an exception for NFTs and cryptos, Apple could see its earnings cut. In a 2020 filing with the US Treasury, the company also estimated that a relaxation of App Store rules would come with ita significant reduction in income. 2021, The business generated nearly $70.6 billion, 60 billion for developers and 10.6 billion for Apple. The group is not prepared to revise this amount downwards.
At the same time, Tim Cook, CEO of Apple, has repeatedly shown himself open to cryptocurrencies. Last year, the market leader revealed that it holds crypto assets including Bitcoin and Ether:
” I’ve been interested in this for a long time. I’ve done my research, I think it’s an interesting area.”
Steve Jobs’ successor then stated that Apple was interested in the cryptocurrency sector, although it ” nothing we want to do right away ». Despite the faint interest of Tim Cook and a plethora of rumours, Apple has yet to put a single toe in the cryptocurrency space.