Coinbase Wallet Introduces Instant Messaging Feature Powered by XMTP

In a recent blog post on July 12, Coinbase announced the launch of an instant messaging feature within its Coinbase Wallet. Users of the wallet can now send instant messages to each other using their Ethereum identities. The functionality is made possible through the integration of the Extensible Message Transport Protocol (XMTP), a blockchain-based instant messaging system also utilized by the decentralized social media network, Lens.

According to Coinbase, a select group of wallet users currently have access to this messaging capability. Messages can be sent to others using their cb.id, .eth, or Lens usernames. The feature is being gradually rolled out, initially available to users who scan a QR code from the blog post or who possess Lens profiles. Access will eventually be extended to all users. To ensure privacy, messages are end-to-end encrypted, and users have the ability to block specific addresses from receiving messages.

Coinbase identified the reduction of fraud in the crypto community as one of the driving forces behind the introduction of this feature. By enabling direct messaging between wallet address owners, users can communicate without relying on separate platforms where the verification of the recipient’s Web3 identity may be difficult. This move aims to eliminate unnecessary risks and potential losses associated with external messaging platforms.

Presently, popular chat applications for crypto users, such as Twitter, Discord, and Telegram, do not support the verification of Web3 identities.

Coinbase also highlighted the decentralization aspect of using XMTP for messaging. If Coinbase Wallet were to discontinue its services or cease operations, users would still be able to retain their XMTP chat histories and access them through other XMTP-compatible apps like Lenster or OrbApp. Coinbase emphasized the seamless transfer of chats, allowing users to focus on connections rather than concerns over platform availability.

The XMTP protocol operates on a network exclusively owned by its developer, XMTP Labs, as stated in the XMTP documents. However, the company expressed its commitment to working towards a phased decentralization of the network.

Shane Mac, co-founder of XMTP, clarified the decentralized nature of the protocol. He emphasized that XMTP is not an instant messaging or social media application itself but rather a protocol that can be utilized by other applications such as Coinbase Wallet and Lens. This approach grants users the freedom to choose the app they prefer without sacrificing their identities or chat histories when switching between apps.

Mac further emphasized the importance of incentivizing developers to build on decentralized and interoperable networks. Over 400 developers are currently building on top of XMTP, illustrating the desire for an open ecosystem rather than isolated silos.

Coinbase Wallet has played a role in the growing adoption of Web3 usernames. In September, the platform offered free cb.id usernames to all users, resulting in a surge of registrations towards the end of the year. Web3 usernames enable users to send cryptocurrencies to human-readable names rather than relying on lengthy and complex crypto addresses.

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