Recently, Coinbase announced via tweet that it has stopped NFT transfers from its iOS application. Apple has blocked the release of its latest application (unless the NFT transfer function is disabled). The focus of the dispute between the two parties is the amount of fees charged for NFT transfers. Apple hopes to charge a 30% transaction fee, and Coinbase obviously does not want to be taken advantage of.
To make one thing clear, first of all, the Apple system does not support encrypted payments, and Coinbase NFT transactions use encrypted currencies. If Apple supports Coinbase's NFT trading function, it will not receive subsequent revenue and data collection, which will create uncertainty in its business control, because Apple will have to bear part of the risk of future industry supervision and complaints. Under uncertain factors and policies, Apple adopts a high fee charging method to ensure that it maximizes its commercial benefits.
However, the 30% transaction tax makes Coinbase bear taxes that are far higher than the highest taxes in the NFT trading market. Moreover, if NFTs are transferred free of charge through Coinbase payments, Coinbase must also pay transaction fees to Apple, which is also the focus of dispute between the two parties.
Apple Store Policy on NFTs
“Apps may allow users to view their own NFTs, provided that NFT ownership does not unlock features or functionality within the app. Apps may allow users to browse collections of NFTs owned by others, provided that such apps do not contain buttons, external links, or other calls to action that direct customers to purchase mechanisms other than in-app purchase.”
Currently, the uncertainty of Apple Store’s regulation on NFT and cryptocurrencies makes its transactions and transfers more conservative and nervous. It does not support buttons for guiding advertisements and third-party link jumps, which indirectly blocks the liquidity of Coinbase users’ NFT assets. Without circulating goods, there is no transaction value, and Coinbase will be the party that suffers the loss.
Traditional APP and Decentralized DAPP
With the improvement of mobile Internet infrastructure and the stabilization and speed-up of the network, the popularity of smartphones has far exceeded that of fixed PCs, and people are increasingly relying on mobile phone apps for communication, social interaction, entertainment and other activities.
DApp is the abbreviation of Decentralized Application, which can also be understood as distributed application. DApp is based on blockchain and mainly appears on distributed platforms or networks such as Ethereum and EOS. It does not rely on any central server to achieve the purpose of decentralization.
Unlike traditional APPs, DApps emphasize decentralization and must run on distributed operating systems, rather than on traditional platforms such as iOS and Android. Although DApps do not rely on any central node, they cannot do without smart contracts. It can also be said that relying on the constraints of smart contracts, DApps do not need to obey any centralized server or node and can achieve autonomy. In addition, DApps must also be stored securely and protect privacy.
In layman's terms, DAPP is to blockchain what APP is to IOS and Android. That is: DAPP = front-end + smart contract. The front-end can be written in any language as long as it can fully display the user interface and call the back-end code. Here, the smart contract is the bridge connecting DAPP and the database, which is equivalent to the API connector in the traditional Internet APP.
Let's make a comparison and see what are the advantages and disadvantages of each.
Advantages and disadvantages of traditional APP
Advantage:
Best user experience, convenient interactive design and gorgeous user interface
It has many functions and strong performance. Whether it is the comprehensive display of brands and products or online transactions, mobile shopping malls, marketing promotion and interactive communication, it has complete and powerful functions.
Access and demand are matched accurately, and users and brands form direct and accurate services.
Strong scalability, customization, upgrade, and quick connection with third-party software such as ERP, AO, and applets
High security, fast update and iteration, own technical advantages and team operation, and invest more in development speed and security performance to form efficiency
shortcoming:
The development cycle is long, the cost is high, and it requires a professional team and operations
Active collection of user information and data can easily lead to information leakage and asset loss
Information asymmetry: users passively accept brand releases and cannot determine accuracy
The inequality between members and ordinary users leads to an imbalance in assets and benefits. Excessive settings by developers increase barriers and capital investment.
If the centralized server is attacked or an emergency occurs causing login difficulties, the APP will be unable to connect and update.
Advantages and Disadvantages of Decentralized DAPP
Advantage:
DAPP runs on the blockchain network and guarantees the stability and security of the network through decentralized operation of network nodes.
Data is encrypted and stored on the blockchain, and property rights transactions and transfers are carried out on the chain without any third party in the middle.
All data and transaction records on the chain are open and transparent, and everyone can query and track them
The DAPP code is open source and can be viewed and audited to prevent possible malicious behavior.
DAPP executes smart contracts and automatically executes commands on DAPP. The deployment and content of smart contracts are determined and executed through the resolution of the majority to ensure fairness and correctness.
shortcoming:
Poor experience, high entry threshold, requires certain encryption knowledge and wallet address
The transaction processing speed of blockchain network cannot be compared with the existing platform applications, resulting in transaction delays, increased transaction fees and the risk of transaction failure.
The immutability of blockchain also makes it difficult for developers to update and improve the performance of DAPP, and it is difficult to modify it if errors are found or it is attacked.
There is no operating system for DAPP applications, especially for use on mobile devices, resulting in a situation where various DAPPs have a small number of users and low profits.
After understanding the advantages and disadvantages, what are the uses of DAPP?
Where is DAPP used?
1. Decentralized Finance (DeFi)
Traditional finance relies on financial institutions to act as middlemen. With DApp, everyone can use financial services without any central institution and have full control over their assets. DeFi DApp provides instant transaction settlement, almost no credit checks, and allows digital assets to be used as collateral. Users can have greater flexibility in the DApp lending market.
Decentralized exchanges (DEX) are another important application of financial DApps. Such platforms facilitate peer-to-peer transactions without the need for intermediaries such as centralized digital currency exchanges. Instead of transferring assets to an exchange and entrusting them to a third party for safekeeping, users can trade directly with another user through smart contracts. Orders are executed directly between user wallets on the chain. Decentralized exchanges require less maintenance, so transaction fees are much lower than centralized exchanges. Popular decentralized exchanges include Uniswap, SushiSwap, and PancakeSwap.
2. Game on the blockchain (GameFi)
Unlike traditional video games, in most gaming DApps, players have full control over their in-game assets and the opportunity to monetize those items outside of the game.
For example, game characters, virtual land, and game items in Axie Infinity are all NFTs. Players can store them in crypto wallets, transfer them to other Ethereum addresses, or trade them with other players on the NFT marketplace. Within the ecosystem, players can compete with each other to collect ERC-20 tokens that can be traded on the exchange platform. Generally, the longer you play, the more in-game rewards you can get.
3. Art Entertainment (NFT)
Traditional art collection and artist copyright ownership is a major pain point today. The emergence of NFT with clear ownership blockchain technology can greatly enhance the authorization and transaction of art. Artists can generate income from artistic value through NFT. DAPP focusing on digital ownership provides an entry point for NFT creation and trading, serving as a bridge between artist creators and the secondary market.
4. Community Governance (DAO)
DApps enable users to play a greater role in the governance of online organizations by introducing community-centric decision-making mechanisms. With the help of smart contracts, users who hold governance tokens of a specific blockchain project can create proposals for the community to vote on and vote anonymously on proposals of others.
One of the decentralized governance models is the Decentralized Autonomous Organization (DAO). DAOs use smart contracts to make decisions without a central authority and can be considered fully autonomous DApps. There is no hierarchy within a DAO, but rather economics align the organization with the interests of individual members.
5. Knowledge Sharing (Library)
Traditional websites’ collection and misuse of personal information may cause trouble to creators. Upload and sharing are easily restricted, and resource storage faces the consequences of loss and network shutdown. The desire for a permanently secure decentralized DAPP that does not require personal information is becoming more and more urgent. Knowledge sharing requires a decentralized, free and permanently secure carrier.
DAPP focuses on technology development and can provide creators with secure and permanent network storage and construction, anonymity and encryption security.
in conclusion
The obstruction of Coinbase's crypto business also reflects the current dilemma of DAPP development and application: DAPP does not have a safe and reliable operating system to support the download needs of real users, and DAPP currently lacks underlying blockchain development and management talents, resulting in the inability to solve the shortcomings of on-chain transactions. The service objects are largely concentrated in Defi and GameFI, which cannot cover the actual needs of the people. The high threshold of the single experience makes people lose interest for a while. The profit model on DAPP is mostly speculative business actions, which can easily cause asset instability, which can easily create a bad impression of scams for the subsequent user groups.
In the future, with the addition of blockchain talents and the continuous upgrading and transformation of public chain technology, an operating system that can be freely downloaded by everyone will appear, and DAPP will emerge in large numbers like mushrooms after rain. DAPP on the blockchain will increasingly enhance the user experience and support of the user group.
"Statement: According to the Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation issued by the Central Bank and other departments, the content of this article is only for information sharing and does not promote or endorse any business or investment behavior. Readers are requested to strictly abide by the laws and regulations of their region and not participate in any illegal financial activities."
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