news

Jack Dorsey's Plan for Decentralized Social App May Be Thwarted by Apple's Strict Payment Rules

Anushree Fadnavis | Reuters
  • Damus, which is backed by former Twitter CEO Jack Dorsey, said on Tuesday that Apple could remove the app from its App Store within 14 days.
  • Damus said in a tweet that Apple is considering the ban because of the messaging app's integration with the Lightning Network, which is a payment protocol related to the bitcoin cryptocurrency.
  • Dorsey called for Apple CEO Tim Cook to reconsider removing Damus from the App Store.

A team behind the decentralized social messaging app Damus, which is backed by Twitter co-founder Jack Dorsey, warned on Tuesday that Apple could remove the app from its App Store within 14 days. Apple later reneged on its threat, but only if Damus agreed to remove certain payments functionality.

The move could stall one plan to ease the use of bitcoin and turn it into a more convenient transnational digital currency.

Damus originally said in a tweet that Apple is considering the ban because of the messaging app's integration with the Lightning Network, a payment protocol that lets users exchange bitcoin directly over the network without needing another app. On Nostr — the underlying platform Damus runs on — these types of payments are known as "zaps."

In its tweet, Damus said that Apple was worried that zaps could be used by content creators to sell digital content on its platform. Apple has a long history of prohibiting app makers from using in-app payments to sell additional content or add-ons, unless those payments go through Apple, which takes a 30% cut.

Damus later added in another tweet that the app makers must remove the "zap button" on posts, because Apple considers that "selling digital content."

"Only zaps on profiles are allowed," Damus said in the tweet. "This cripples damus pretty bad, but you can still zap at least."

Apple said in a statement that the company reviews "all apps against the same set of guidelines that are intended to protect customers and provide a fair and level playing field to developers." The iPhone maker added that it "identified a feature in the Damus app that allows users to send a tip in connection with digital content in the app, which violates App Store Review Guidelines."

Dorsey tweeted his displeasure against Apple saying that "Tipping on posts is not selling digital content. It's a form of feedback."

"Why limit people sending bitcoin to each other?" Dorsey asked. "This is our one opportunity to build a truly global payment protocol for the internet (which would benefit your company immensely)."

Dorsey, who is also the CEO of payments company Block (formerly Square), is a cryptocurrency adherent, and Block has made several big bets on cryptocurrency, including a system to help people "mine" bitcoin — that's the process of running resource-intensive computer programs to validate bitcoin transactions and create new coins.

Last December, Dorsey donated 14 bitcoins worth roughly $245,000 at the time to the team building Nostr, which is a decentralized social media initiative intended to not be owned by any particular leader or commercial entity. Nostr users can maintain their identities on multiple Nostr-powered apps like Damus and exchange bitcoin with each other via the Lightning network.

Dorsey, one of the co-founders and former CEO of Twitter, has been championing decentralized apps as the next evolution of social media, in which users can speak their minds and not be forced to adhere to policies of social media operators.

A lot of these platforms have no algorithms to recommend particular content — a sore point for some Twitter users who complain they're seeing less relevant content in the "For You" tab of Twitter since Elon Musk took over. They don't sell ads, and don't collect and sell user data, which are the classic ways that social networks make money.

Dorsey is currently also a backer of the Bluesky messaging app, which is built on top of a decentralized networking technology called the AT Protocol. Bluesky, which is still only available to users via invitations, has grown in popularity as users flee Twitter amid a rise of hate speech and bugs, but it still much smaller than the popular messaging app, which Tesla CEO Musk bought last fall.

Watch: Twitter fumbles coverage of Ron DeSantis candidacy announcement

Copyright CNBC
Contact Us