What Epic vs. Apple Means for Crypto

The biggest crypto news and ideas of the day

Sept. 14, 2021

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ETHEREUM ATTACKED? An attack on the Ethereum blockchain early Tuesday morning temporarily diverted a small percentage of the network’s nodes to an out-of-sync chain. Ethereum researcher Marius Van Der Wijden said the attack was “experimental” in nature. Ethereum’s mainnet is now operating normally, and the attack is unlikely to be replicated at a larger scale, according to an expert.

THE QUANTS: Quantitative trading firm Jump Trading has launched an 80-person crypto division that will build “the plumbing” for blockchain ecosystems. Meanwhile, billionaire New York Mets owner Steven Cohen is again betting on the crypto industry, this time with a personal investment in quantitative digital asset trading firm Radkl.

GAMING THE SYSTEM: Game developer and Ethereum layer 2 Immutable has raised $60 million in Series B funding to scale its NFT trading infrastructure. While Huobi Ventures, the investment arm of Huobi Group, is setting up a $10 million fund to invest in early stage projects at the intersection of gaming and decentralized finance.

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"You need a framework that governments can live with, but [it] shouldn't be that nobody is allowed to do anything that doesn't fit within banking regulation. The framework should be that crypto is a whole new activity."

–Former Acting Comptroller of the Currency Brian Brooks, on CoinDesk's “First Mover" live at Salt.

What others are writing...

Off-Chain Signals

A message from Aimedis

Aimedis - an eHealth platform based on blockchain technology, which has been developed since 2017 and released in the current version 2020 for web, iOS and Android. Aimedis combines all relevant eHealth applications such as health records, video chat
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Amber Group: Crypto Evolution in Real Time

Many crypto companies begin life focused on their products and individual customers. As the crypto markets gain institutional acceptance, these crypto players are now in the process of trying to morph into businesses with the capacity to service institutions. Amber Group has done things rather differently, being institutionally focused from Day One.

Putting the news in perspective

The Takeaway

In Epic Vs Apple, It's Open Vs Closed

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

A heated legal battle between Apple 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).

Judge Yvonne Gonzalez Rogers 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.

This 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.)

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 towards 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 Facebook, Google and Apple.

A functioning metaverse will require that payments be instantaneous, 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 this 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” towards other payment options, it appears that all goods that are sold must also be offered by Apple. This 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.

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.

–Daniel Kuhn

The Chaser...

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