Coinbase nixes NFT wallet feature in fee dispute with Apple

Coinbase has killed a non-fungible token (NFT) feature on its mobile wallet because Apple demanded a cut, although the cryptocurrency platform didn’t get a cut either.

Driving the news: The company nixed a “Send NFT” feature in its Coinbase Wallet, because it costs money (ether) to send an NFT.

• Meanwhile, the iPhone maker — which has come under fire for the harsh cut it charges larger app makers — has claimed that “gas” fees required to send NFTs should be paid in-app, according to Coinbase.

Why it’s important: Many large firms (and not a few informed users) in Silicon Valley are mad about the 30% Apple takes from any transaction that takes place on a major developer’s iOS app.

• Spotify and Epic Games have been fighting it for a long time, and Elon Musk has joined that fight now that he runs Twitter.
• Even the French are upset with the Cupertino-based giant.

What they say: “Apple’s claim is that the gas fees required to send NFTs must be paid through their in-app purchase system so they can collect 30% of the gas fee,” Coinbase Wallet wrote in a Twitter thread.

Context: Apple controls the most lucrative app marketplace in the world. Coinbase has been one of the most popular apps at times.

Zoom in: Sending an NFT (doing literally anything on a blockchain) costs the sender some money. Every time a user makes an action that goes into Ethereum or related blockchains, the user must pay the many computers that will run that computation.

• This is called “gas” but is actually paid with the coin of the blockchain realm (when on Ethereum, gas is paid in ether).
• Still, Coinbase gets no of this when a Wallet user presses “send NFT”. It goes all the way to the blockchain’s validators. That’s just how Ethereum works.

• Still, money changes hands through one of its apps, so Apple thinks it deserves a cut.

Flashback: Apple has long had a hard time wrapping its head around blockchains and NFTs.

• Back in 2018, it started the Coinbase wallet when it tried to let users view their NFTs for a video game that was in development at the time.
• In 2015, it removed a game that earned bitcoin.
• Coinbase itself had a tough time with the iOS store early on.

Earlier this year, guidelines gave a definite “no” to selling NFTs without cutting Apple in.

Quick take: If we had to bet, we’d say Apple do not even has an Ethereum address to send the cut to, although Coinbase has set one up.

Apple and Coinbase did not immediately respond to Axios’ request for comment.