Recent Court Ruling Could Bring NFTs and Crypto Payments One Step Closer to Apple’s iPhone


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Where oh where is the metaverse? Not on the Apple App Store, apparently.

A heated legal battle between Apple (NASDAQ: AAPL) and Epic Games, the maker of Fortnite, may have opened the door to allowing cryptocurrency purchases within the tech giant’s iOS ecosystem. In the much-watched case, Epic argued that the tech giant maintained a monopoly over its App Store and engaged in anti-competitive practices by requiring all in-game purchases be routed through Apple’s proprietary payment system (for which it charges a hefty 30% commission).

U.S. District Judge Yvonne Gonzalez Rogers of the Northern District of California issued a permanent injunction Friday loosening this restriction: Apple must now give users the choice to buy digital goods on the App Store or exit the app to buy directly from developers on the web, though the 30% fee remains.

That is a victory for consumers, but it leaves a lot of questions unanswered. The first big case against a Big Tech company in the U.S. largely left Apple’s monopoly in place, and could have significant repercussions for the development of interoperable, open and user-centered worlds colloquially called the metaverse. In fact, Gonzalez Rogers punted on defining the term:

“At this time, the general market does not appear to recognize the metaverse and its corresponding game modes in Fortnite as anything separate and apart from the video game market,” she said. (She also didn’t define what makes a game a game, essentially saying you know it when you see it.)

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Although not central to its case, Epic was taking a stand on the future of gaming and app development. Accelerated by crypto, digital reality is trending toward a world where virtual identities can move seamlessly across platforms, where digital goods can actually be owned and where the internet “feels” as real as meatspace. This is apart from the web we know, where large swaths are owned, maintained and controlled by centralized parties like Apple, Facebook and Google.

A functioning metaverse will require that payments be instantaneous and that commerce can spring up naturally between two consenting parties without restriction. Friday’s ruling moves us a step of the way there, by enabling developers to sell digital items directly to players. In practice, we don’t know what that will look like: Users may be forced to leave games, open a separate browser and enter their credit card information – a far greater hassle than a one-tap buy Apple Pay enables.

Indeed, Apple still has a vice grip over its iOS operating system. Although users can be “steered” toward other payment options, it appears that all goods that are sold must also be offered by Apple. That means goods on the forefront of cultural acceptance – like non-fungible tokens (NFTs) – are still in a gray area for iOS users.

Reportedly, Apple is blocking an update to wallet service Gnosis Safe, on the grounds that NFTs are “not appropriate for the App Store,” according to an email from an app store reviewer, tweeted out by Gnosis developer Lukas Schor this morning. Gnosis allows users to store NFTs and other crypto assets.

“Since NFT are digital assets that have a price and cost associated with them. App’s [sic] that access, whether it is just simple storage or marketplace, are not appropriate for the App Store. We suggest that you remove this feature from your app,” the email read.

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And then, in a separate email, the review continued: “Specifically, app that access previously purchased digital content must make the digital content available to App Store users as in-app purchases.”

CoinDesk has not verified the emails, but if this is true, it seems remarkably shortsighted. There could soon be a day where my train tickets, music and restaurant reservations are all stored as NFTs on my phone.

Gonzalez Rogers stopped short of allowing third-party developers from opening their own in-app marketplaces (the very reason Epic and Apple started to feud). Epic is now appealing that decision.

[Exclusive: Jeff Brown on Non-Fungible Tokens (NFTs), “World IPO Day, and the $2.1 Quadrillion Shift to Tokenization]

Read more from Daniel Kuhn at CoinDesk.com

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