Apple keeps changing their terms of service to make it impossible to use NFTs on the app store.
Recently Coinbase went public with how Apple was threatening to remove their app unless they disabled NFT trading (or promise to pay Apple platform fees on Ethereum gas, which is ridiculous).
In this video I go over why Apple wants to stop NFTs and how they could threaten Apple’s core business.
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coinbase’s twitter thread:
0:00 start here
1:24 the app store PRINTS money
2:28 why NFTs scare Apple
5:06 how Apple plans to stop NFTs
7:56 it’s not over yet (not even close)
Hey guys welcome back so a few days ago Coinbase came out with a Twitter thread Asking for help turns out that apple had Been blocking the coinbase mobile app From being updated until they removed All nft transfers inside the app so they Were just asking for help and getting The approval that they needed even Ending with a SAS sign-off tweet where They're like hey don't ghost me Apple I Think we can make this work I'm nothing Without you so here you have one of the Largest crypto companies in the world a Publicly traded company being completely Denied by the gigachad Apple corporation All because of a war that Apple has been Waging on nfts you know in a war that Has become even more Savage in recent Months now I know this might sound Strange because nfts are a tiny market Right so why would Apple even care about That like who would win in a fight right The world's most valuable company a two Trillion dollar business with deep Connections with politicians all over The world or a harmless crypto dick but With a little Santa hat but actually it Makes perfect sense because Apple isn't Targeting nfts because of what they are Today they're targeting them because of What they can be in the future and what That looks like is a huge threat to one Of Apple's core businesses which is of Course the App Store so let's quickly
Talk about why Apple might be feeling a Little worried about the growth of nfts And then we'll talk about the recent Specific attacks that they've been doing As a response now you probably know that The App Store is a big deal and it Generates a lot of revenue for Apple but You might not realize just how Ridiculously big this business has Gotten over the last few years what we Know is that in 2021 the App Store Generated somewhere between 70 and 85 Billion dollars in revenue for Apple They make this money by taking a Platform fee on every dollar that goes Through the App Store and so all those Subscriptions that you have all those Items that you buy Apple will take Somewhere between 15 and 30 percent of That and maybe even more impressive is The profit margin which some analysts Believe can be as high as 80 percent so Quick maths 8 85 billion dollars in Revenue with 80 margin gets you to 68 Billion dollars in profit which means That if the App Store were completely Split off from Apple and turned into its Own publicly traded company it would be Amongst the top 10 highest earning Companies in the world just by itself so Obviously with so much at stake you know That Apple has a team of analysts that Are always looking for ways to Strengthen that business but they're
Also spending a lot of time probably Looking at the biggest threats to that Business and it doesn't take a genius to See why nfts could eventually become one Of the biggest risks so first off you Have the expected future size of the Market okay so today the market for nfts Is probably worth somewhere between 10 To 20 billion dollars but some research Firms estimate that this could Eventually be worth 200 billion dollars By 2030. now these research firms do Make a ton of assumptions so you can Absolutely debate you know how big it's Going to eventually be but I think They're directionally correct and I have A bunch of videos explaining why I Personally you know believe that nfts Will be huge so let's just grant that They will be big in the future and we Don't have to put a specific number on Them okay now the reason why Apple might Be concerned about this is because of The way that nft revenue is generated You see today most digital goods go Through traditional payment rails okay So you play a mobile game use a credit Card to buy some Cosmetic Skin and then Apple would just take 30 of that you Can't take that skin outside of the game And usually you can't bring anything Into the game either nfts on your other Hand are pretty different okay so while Technically there are services that
Allow you to buy nfts with a credit card Once that nft hits your crypto wallet It's like anything goes right you can Just sell it you can transfer it you can Just give it away all of that happening Outside of the App Store and without Apple being able to control any of that In fact the majority of volume in nfts Today tends to happen on secondary Markets like open C and can even happen On desktop or through Android devices All of which could evade that 30 tax but It gets even worse for Apple because Because if a mobile game lets you Connect your crypto wallet that means That they could verify the nfts that you Purchase outside of the game and then Use that to give you some value inside So for example let's say that there's a Crypto racing game that I really wanted To play and specifically there was a Lamborghini nft that I wanted for the Game I could just buy that directly from The game Publisher's website or maybe From someone else on openc and when I Connect to the app with my wallet it'll See that I have the lambo nft and then It will be able to give me the lambo Inside the game all that without you Know Apple's eye of Sauron even noticing What's happening now today this isn't Really a problem because you know if We're honest there aren't really any Popular games that use nfts but over
Time we are going to see more and more Games adopt nfts because consumers are Just going to demand them for you know a Bunch of reasons that I've gone over in Other videos but you know we're not Going to get into any of them today but The main point what this all means is That Apple could lose control over one Of the biggest markets in the world Which is mobile gaming okay an industry That today is Val value that a hundred Billion dollars in Revenue so you can See why from Apple's perspective this is Starting to seem like a pretty bad deal And that's why we're starting to see Apple try to stop the expansion of nfts And their first step came in October When they announced new Creator terms of Service that said approved apps may Allow viewing nfts only if they don't Unlock content or offer additional Functionality and of course developers Could now sell nfts featured on the App Store but only via its in-app payment Mechanism which comes with that 30 tax So with all those restrictions unless You bought the nft from the app store Then the utility of those nfts would Really be restricted to just looking at Them in a gallery app okay and also Maybe you know you could send them to Friends and transfer through apps like Coinbase now at this point you might say Come on that's enough okay you've
Already heavily restricted nfts give us A break but no Tim Cook Apple CEO and Real life Tony Soprano said we ain't Done here and that brings us back to the Latest Dagger from Apple and the one That calls coinbase to go public with That thread a few days ago now what Apple's saying is that they want 30 of The ethereum gas fees used when you Transfer an nft from one wallet to Another if you're not aware gas fees are Basically the fees that you pay to Individuals that verify transactions on Ethereum and so it's essentially a Network fee and not something that goes To the person that you're transferring Your nft to nowadays in the bear Market That might just be you know a few Dollars but when there's more activity On the network those gas fees can become Pretty expensive and putting an Additional 30 tax on those fees just Doesn't make any sense right it's Basically like taxing every single Blockchain transaction and even if you Were just sending an nft from one of Your wallets to another you'd have to Pay Apple to do that and since coinbase Clearly wasn't just going to go along With that setup they were forced to Disable nft transfers or lose access to The App Store altogether now many people When they saw this just figure that Apple just doesn't understand how
Blockchains work right because attacks On gas fees is so ridiculous that it Just has to come out of some kind of Ignorance but Apple isn't stupid okay They know that taxing anything Discourages that kind of activity right Like if you wanted people to eat more Tacos and pizza then you would make Tacos tax-free and you would put as many Taxes as you can on pizza and if you Want people to buy Web 2 digital items Instead of nfts then well you're going To tax nfts as much as you can now this Is definitely a bearish development for Nfts I'm not going to sugarcoat it you Know Apple's no longer even trying to Appear neutral when it comes to nfts Anymore and it's clear that they're Actively trying to slow down the growth Until maybe they can figure out how to Maximize their profit from it and look It's a smart play right it's smart for Them to be as aggressive as possible now Before there's any consumer products That people even care about which might Not be the case even a year from now but I also don't think this is going to be The last say okay not even close Okay Apple is still in the middle of a legal Battle with epic over whether or not the App Store should allow other payment Methods outside of in-app purchases and Other CEOs like Elon Musk have been Bringing even more heat to this issue so
Generally I think we're just gonna see More lawsuits and appeals over the next Few years especially if nfts continue to Grow in demand and Android is another Wild card here and they might take a More relaxed position when it comes to Nfts and so if nfts do grow in size this Could be a differentiator between Android and Apple which might Force Apple to back off from some of its you Know more crazy policies and I'm not Going to pretend like I know how this Turns out but at the end of the day this Is just another point that shows why Decentralization is important right the Alternative is having one company like Apple basically monetize the entire Internet and eventually monetize the Entire metaverse as we spend more time Online okay and that's not a good thing Unless I guess you're just someone who Loves paying taxes in which case you're Gonna have a blast fast all right guys That's it for today thanks for watching I'll catch you at the next video