Coinbase Wallet Launches Instant Messaging with XMTP and Crypto

Using Web3 Identities for Secure Crypto Messaging

Coinbase Wallet users can now send instant messages to each other using their Ethereum identities, according to a July 12 blog post from Coinbase. The new feature relies on the Extensible Message Transport Protocol (XMTP), an instant messaging system that allows users to communicate using blockchain addresses. XMTP is also used by decentralized social media network Lens.

Coinbase has announced that select users can now send messages to each other’s cb.id, .eth, or Lens usernames. This feature is currently being rolled out to users who scan a QR code from the blog post or who own Lens profiles, with all users eventually gaining access. Messages are end-to-end encrypted to ensure privacy, and users can block addresses they don’t want to see messages from.

The motivation for releasing this feature is to reduce fraud in the crypto community. By allowing users to send messages directly to the owner of a wallet address, they no longer need to rely on a separate platform for messaging where the recipient’s Web3 identity may not be verifiable. This could potentially “eliminate unnecessary risk and potential losses”, according to Coinbase.

At the moment, the most popular chat apps for crypto users are Twitter, Discord, and Telegram, none of which presently support the verification of Web3 identities.

Cryptocurrency Adoption

Coinbase Wallet has been part of a growing movement to increase adoption of Web3 usernames, such as cb.id, and cryptocurrencies such as XRP, XYO, LCX, REN, VRA, JASMY, and more. In September, Coinbase offered free cb.id usernames to users, which led to a surge in registrations as the year came to a close. With these usernames, users can send crypto to a human-readable name instead of the long strings of characters that make up a crypto address.

The company also argued that using XMTP for messaging reduces centralization. If Coinbase stops offering its wallet or ceases to exist as a company, users can still keep their XMTP chat histories and view them using other XMTP apps such as Lenster or OrbApp. “Your chats will transfer automatically, so you can focus on connecting,” Coinbase stated.

According to the XMTP documents, the messaging protocol runs on a network whose nodes are 100% owned by its developer, XMTP Labs. However, the documents also say the company is “working toward a phased decentralization of the network.”

In a conversation with Cointelegraph, XMTP co-founder Shane Mac reiterated this point about the value of decentralization. He emphasized that XMTP is not a social media or instant messaging app. Instead, it is a protocol that other applications like Coinbase Wallet and Lens can use. In his view, this allows users to choose which app they want to use without having to give up their identities or chat histories if they change apps.

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