Crypto Gloss

Why Calling It a ‘Wallet’ May Have Been Crypto’s Biggest Mistake

You probably “own” thousands of dollars in digital media. Steam games you can’t sell. Movies on a platform that can remove them. Albums tied to a subscription that ends the moment you stop paying. Music, films, and games that disappear from your library when a company changes its mind, shuts down a store, or loses a licensing deal.

This is one of the most concrete problems blockchain technology was positioned to fix. It didn’t get the chance to fix it cleanly — not because the technology failed, but because the framing did. And the framing problem started with a single word.

The Word “Wallet” Was Never About Ownership

A wallet is where you keep money. Not media. Not memories. Not the things you’ve collected. Money.

When crypto chose the word “wallet” to describe its core user-facing concept, it made an irreversible decision about how the entire space would be perceived: as a financial instrument, not an ownership layer for digital life. That decision attracted finance people, speculators, and developers — and filtered out almost everyone else.

Consider what the word communicates to someone who has never touched crypto. A wallet implies currency. Currency implies exchange rates, taxes, market risk, scams, and speculation. For someone who just wants to buy a film and keep it — someone who owns a Blu-ray collection and understands permanent physical ownership intuitively — the word “wallet” tells them this isn’t for them.

A “digital vault” communicates something different. A vault stores valuables. It protects things. It implies permanence and control rather than transactions and risk. If the mental model had been built around holding rather than spending, the adoption conversation would have been different from the start.

This isn’t semantic trivia. The language of a product shapes who uses it, who builds for it, and what gets built. “Wallet” shaped crypto into a trading ecosystem. A different word — vault, locker, collection, archive — might have shaped it into an ownership ecosystem. One of those has a significantly larger potential user base.

What NFTs Actually Were Before They Became JPEGs

The first widespread use of NFT-style tokenized ownership wasn’t digital art. It was CryptoKitties — a collectibles game. Before that, the academic and developer conversation around non-fungible tokens centered on property records, identity verification, and digital media ownership.

The idea was coherent: instead of a line in a platform’s database saying “user ID 4592031 has access to this file,” put an immutable token in a user-controlled wallet. The user controls the token. No platform can revoke it. It can be resold, lent, or transferred without the platform’s permission.

This is an excellent idea for music, film, games, and software. It’s the equivalent of buying a physical Blu-ray rather than streaming — except the digital version can do things the physical disc can’t, like encode a royalty payment every time the item changes hands.

What actually happened: the technology became primarily associated with speculative art trading. Bored Ape Yacht Club, generative PFPs, and a wave of celebrity-backed tokens that collapsed in value became the public face of NFTs. The media’s coverage followed the money and the spectacle. The genuinely useful ownership application — the one that would have made immediate sense to a movie buyer who’d had content removed from their Vudu library — never had its turn as the primary story.

The Streaming Problem Is Exactly What NFTs Were Built For

In 2023, Starz removed Outlander content from Lionsgate+ accounts. In 2022, Sony removed purchased Discovery content from PlayStation Vue customers. In 2021, Sony announced it would shut down the PlayStation Store for PS3, PSP, and Vita — meaning all purchased digital games on those platforms would become permanently inaccessible. Faced with public backlash, they reversed the PS3 and Vita decision. The PSP store still closed.

These are not edge cases. They are the normal operating behavior of digital media licensing.

When you “buy” a film on a digital platform, you are buying a license that is contingent on that platform remaining operational, maintaining its licensing agreement with the studio, and choosing not to change its terms. The word “buy” is functionally inaccurate. You are pre-paying for access with no guarantee of duration.

An NFT-based film purchase would work like a Blu-ray: the token is in your wallet (or vault, or collection), controlled by you. If the distribution platform shuts down, the token persists. If a smart contract links the token to a file stored on a permanent decentralized storage layer — Arweave, IPFS with pinning — the file persists too. The studio can’t remove it from your library because there is no centralized library.

The pitch for this is not complicated. It requires no understanding of blockchains, private keys, or consensus mechanisms. “Buy this movie. Own it permanently. Sell it if you want. No subscription. No revocation.” That is a pitch mainstream consumers immediately understand, because they understand what physical ownership means and they’ve been burned by its absence in digital purchases.

The reason this pitch wasn’t the face of NFTs isn’t that it doesn’t work. It’s that speculative JPEGs were generating more short-term revenue and coverage.

Sony’s DRM Problem Makes the Case

Sony’s recent anti-piracy enforcement has produced a new variant of the ownership problem. In 2024, Sony began implementing DRM mechanisms on certain PlayStation titles that — by design — allow remote deactivation of games under specific conditions. The stated intent is piracy prevention. The structural reality is that Sony retains the technical capability to disable a game you purchased.

This is not hypothetical leverage. It is a tool that exists and has been demonstrated in adjacent contexts across the industry. In 2009, Amazon remotely deleted copies of Orwell’s 1984 from Kindle devices without user consent — because of a licensing dispute Amazon hadn’t initially noticed. The irony is too obvious to need pointing out.

The industry response to these incidents tends to be “this was an edge case” or “this was a mistake that won’t happen again.” The point isn’t whether a specific company will misuse the capability. The point is that the capability exists, and as long as it does, you don’t actually own what you paid for.

An NFT-based ownership model structurally removes this capability. The token is in your wallet. The developer has no key to your wallet. A content removal requires — at minimum — a network-level governance decision on a public blockchain, which is slow, visible, and contested. That’s a meaningful structural protection that the current DRM paradigm does not offer.

The 30% Problem: What Platforms Actually Take

Apple App Store: 30% on all purchases (15% for developers under $1M revenue). Google Play: 30% (15% for the first $1M annually). PlayStation Store: 30%. Microsoft Store: 30%. Nintendo eShop: 30%. Steam: 30%.

The Epic Games Store launched at 12% specifically to compete on this number. Apple’s response to developer complaints about its 30% cut triggered the most significant antitrust litigation in the tech sector in a decade.

This number is not incidental. It is the operating margin of the entire digital distribution ecosystem. For every $30 game sold on Steam, the developer receives $21. For every $30 game sold on PlayStation, the developer receives $21. The platform collects $9 for hosting a file and running a checkout page.

That $9 is not free. It buys something: access to the platform’s user base, discovery algorithms, storefront visibility, and payment infrastructure. It also buys, less explicitly, the conditions on the transaction. The developer agrees that Steam sets the terms, Steam can ban their game, Steam can change revenue share terms in future agreements, and Steam owns the customer relationship.

A direct-to-wallet NFT sale eliminates the 30% cut. A $30 game sold as an NFT directly to a buyer costs approximately $0.50–$2 in blockchain transaction fees depending on network. The developer receives $28–$29.50 instead of $21. On 100,000 copies, that is the difference between $2.1 million and $2.85–$2.95 million in developer revenue — a 36–40% improvement.

For smaller developers — the studios shipping games at $5–$15 — the math is even starker. A $10 game on Steam nets $7. A $10 game sold direct nets $9.50. Over a production lifetime, that difference is meaningful.

The Secondary Market Advantage: What Programmable Royalties Change

Physical media has a secondary market. GameStop was built on it. Every used disc sold was a transaction that cut publishers out entirely. When a game sold used for $20, the original developer received $0. The retailer captured the full margin.

This is why publishers spent two console generations trying to kill the used game market through online passes, server shutdowns, and ultimately the shift to digital-only distribution. Digital-only effectively killed used game sales — and then used this as evidence that the used game problem was solved. What it actually solved was the problem for publishers. Consumers lost resale rights entirely.

Programmable royalties on NFTs do something that has never existed in any media distribution model before: they give developers a cut of the secondary market. A smart contract can encode a 5% royalty on every resale. If a game sells for $30 and is later resold for $20, the original developer automatically receives $1. If it’s resold ten more times over the following decade, the developer receives a royalty each time.

This is not anti-consumer. Used game buyers can still buy and sell freely. Developers participate in a market they’ve historically been structurally excluded from. The economic model changes so that creation and participation in the secondary market both generate developer revenue — rather than publishers choosing to kill one to preserve the other.

For music, the math is even more compelling. A musician selling an album as an NFT retains 100% of the primary sale and encodes a 10% royalty on every secondary sale. Under current streaming models, a major-label artist might receive 15–20% of streaming revenue after the label takes its cut. An independent artist uploading to Spotify earns roughly $0.003–$0.005 per stream. An album that streams 10 million times — a genuinely successful independent release — generates $30,000–$50,000 in streaming revenue for the artist. A limited NFT drop of 1,000 editions at $30 each generates $30,000 in a single day, with no streaming infrastructure needed and 100% going to the artist.

If NFTs Had Been Media-First

Imagine the following product launch, circa 2019: a major film studio releases its summer blockbuster simultaneously on a streaming platform and as a direct NFT purchase. The NFT version costs $25. You own it permanently. It’s stored on decentralized storage and tied to a token in your collection. If you want to resell it in five years when you’ve watched it three times and need the shelf space, you can — and the studio gets 5% of that sale. The studio also earns 100% of the $25 purchase price instead of the 70% they’d get after a platform takes its cut.

The consumer pitch: “Own this movie like a Blu-ray. Cheaper. No disc. Permanent. Sellable.”

This would not have required any consumer to understand smart contracts, gas fees, or wallet seed phrases. It would have required understanding one concept: you own this, permanently, the way you own a physical disc — except you can also sell it as easily as a digital file.

The 2021 NFT boom could have been that story. Instead, it became a story about $69 million Beeple collages, celebrity-endorsed tokens that lost 98% of their value, and wash trading on platforms that existed primarily as speculation venues.

The media-first framing failed not because it was wrong — the technology absolutely supports it — but because speculative trading was more immediately profitable for the platforms and early participants. The use case that would have drawn in millions of ordinary consumers who just want to own their digital purchases was consistently subordinated to the use case that would have drawn in fewer, wealthier speculators.

What the Naming Gets Right and Wrong

“Crypto wallet” tells you what the tool is technically: a place that holds cryptographic keys and the assets those keys control. That’s accurate.

What it fails to communicate is what the experience of using one should feel like for an ordinary person. Not a trader. Not a developer. The person who owns 200 Blu-rays and 500 Steam games and has never thought about custody or private keys.

That person needs a digital vault. A collection. An archive. A locker they control and that no subscription cancellation, no platform closure, no licensing dispute can touch. Something that works the way physical ownership has always worked, except better — permanent, resalable, and immune to the “we’ve decided to remove this from your library” email.

Crypto has built that infrastructure. It hasn’t yet built the product experience around it that makes the infrastructure invisible and the ownership experience obvious. Until it does, “wallet” will remain a word that signals finance to people who want ownership, and the most compelling use case for the technology will continue to live in articles rather than in mainstream storefronts.

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