The new feature provides end-to-end encrypted private information to anyone with a cb.id username, .eth domain, or Lens ID.
Coinbase Wallet users can now use their Ethereum identities to instant message each other, according to a Coinbase blog post on July 12. The new functionality relies on the Extensible Message Transfer Protocol (XMTP), an instant messaging system that allows users to communicate using blockchain addresses. The decentralized social media network Lens is also using XMTP.
According to the Coinbase article, some wallet users can now send messages to other users’ cb.id, .eth, or Lens usernames. This feature is currently rolling out to all users who scan a QR code in a blog post or owner of a Lens profile, and going forward all coinbase users will have access. Messages will be encrypted end-to-end to ensure privacy, and users can also block addresses that they do not want to receive messages.
One of the motivations behind this feature, according to Coinbase, is to reduce fraud in the virtual currency community. Since users can now send messages directly to the owner of a wallet address, they don’t need to rely on a separate messaging platform that may not be able to verify the recipient’s Web3 identity. Coinbase said this could “remove unnecessary risk and potential loss.”
Currently, the most popular chat apps for virtual currency users are Twitter, Discord, and Telegram, but none of these apps allow users to verify their Web3 identities.
Coinbase also explained 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 chats and view them using other XMTP apps like Lenster or OrbApp. According to Coinbase, “user chat history will automatically follow, so users can focus on building long-lasting connections.”
According to the XMTP document, the messaging protocol is currently running on the network of its developer, XMTP Labs, and the nodes are 100% owned by XMTP Labs. The document also states that XMTP Labs is “working to gradually build a decentralized network.”
XMTP co-founder Shane Mac reiterated the value of decentralization in a conversation with Cointelegraph. He emphasized that XMTP is not a social media or instant messaging application. Instead, it’s a protocol that other apps like Coinbase Wallet and Lens can use. This, he argues, allows users to choose which apps they want to use without giving up their identity or chat history if they switch apps.
“To really have an interoperable and decentralized web, developers have to be willing to build on top of it. Currently we have over 400 developers working together on XMTP to build […] you really have to Incentivize developers to work with you instead of building a closed standalone system yourself.”
Coinbase Wallet has been a major force in the movement to adopt Web3 usernames. Last September, it gave all users free cb.id usernames, which helped it create a small spike in sign-ups late last year. Web3 usernames are meant to allow users to send virtual currency to a human-readable name, rather than the long strings that make up a virtual currency address.