Coinbase reveals that the goal of creating a messaging feature was to reduce the prevalence of fraud in the crypto community.
Cryptocurrency exchange Coinbase has partnered with the Extensible Message Transport Protocol (XMTP) project to add an encrypted messaging feature to its self-custodial wallet offering. Select Coinbase Wallet users with a cb.id (Coinbase Decentralized ID) username, .eth domain, or .lens address will now be able to send instant end-to-end encrypted messages to each other. According to a blog post by the exchange, the service will be rolled out to other Coinbase Wallet users in the future.
XMTP is an open-source, instant messaging protocol that enables users to communicate using their blockchain addresses. Web3 social network Lens, for example, uses the XMTP protocol. The XMTP integration into Coinbase Wallet puts the service on par with popular mainstream payment services such as PayPal’s Venmo and Block’s Cash App.
According to the exchange, this new feature presently supports thousands of cryptocurrencies, with users transacting in Circle’s USDC stablecoin exempted from paying gas fees. Like most messaging services it also has a blocking feature that allows users to block blockchain addresses they do not wish to interact with.
Coinbase reveals that the goal of creating a messaging feature was to reduce the prevalence of fraud in the crypto community. Some of the popular communication channels in crypto circles include Twitter, Discord, Telegram, and Signal where an individual’s Web3 identity may not be so easy to verify. With Coinbase’s new feature, users can send messages directly to the owner of a wallet address.
The exchange hopes this will “eliminate unnecessary risk and potential losses” caused by accidentally sending crypto to the wrong address, individuals falsely claiming ownership of an .eth username, or fake social media profiles. Coinbase Wallet users will be able to check the wallet profile of other users for more information before deciding whether to engage with them or not.
The exchange also promises users less centralization and full control and ownership over their identity and chats. Users will be able to take their conversations and view them across XMTP-compatible apps such as Lenster or OrbApp. Even if Coinbase were to discontinue the service, users would still have ownership of their chat history. Commenting on the decentralization XMTP co-founder Shane Mac emphasized that XMTP is not a social network or messaging app but a protocol that can be integrated into other applications. As such, he believes that users will be able to use an application of choice without giving up their identity or compromising the security of their chats.
“To really have a network that is interoperable and decentralized, developers have to want to build on top of it. So we have over 400 developers building on top of XMTP […] You really have to incentivize developers to build with you, not to build a closed-walled silo,” Mac stated.
Besides encrypted private messaging, the XMTP protocol can also be used for announcements and alerts. The project raised $5 million in a 2021 seed round led by California-based venture capital firm Offline Ventures.
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Mercy Mutanya is a Tech enthusiast, Digital Marketer, Writer and IT Business Management Student.
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Source: https://www.coinspeaker.com/coinbase-wallet-encrypted-messaging-xmtp/