According to a blog post from Coinbase on July 12, Coinbase Wallet users can now engage in instant messaging using their Ethereum identities. The new feature utilizes the Extensible Message Transport Protocol (XMTP), which enables communication through blockchain addresses. XMTP is also utilized by the decentralized social media network, Lens.
As per Coinbase’s post, selected wallet users can now send messages to fellow users’ cb.id, .eth, or Lens usernames. Initially, the feature will be rolled out to users who scan a QR code from the blog post or own Lens profiles. Eventually, all users will have access to the feature. To ensure privacy, messages are encrypted end-to-end, and users have the ability to block unwanted addresses.
Coinbase stated that the motivation behind introducing this feature was to reduce fraud within the crypto community. By enabling direct messaging to wallet address owners, users no longer need to rely on separate platforms where the recipient’s Web3 identity may be unverifiable. Coinbase believes this can eliminate unnecessary risk and potential losses.
Currently, popular chat applications for crypto users such as Twitter, Discord, and Telegram do not allow verification of Web3 identities.
Coinbase also argued that utilizing XMTP for messaging reduces centralization. Even if Coinbase ceases to exist or discontinue its wallet service, users can retain their XMTP chat histories and access them through other XMTP apps like Lenster or OrbApp. “Your chats will transfer automatically, so you can focus on connecting,” said Coinbase.
According to XMTP documents, the messaging protocol operates on a network solely owned by its developer, XMTP Labs. However, the company is actively working towards decentralizing the network in phases.
XMTP co-founder Shane Mac emphasized the value of decentralization in a conversation with Cointelegraph. He clarified that XMTP is not an instant messaging or social media app but rather a protocol available for use by applications like Coinbase Wallet and Lens. Mac believes this empowers users to choose their preferred app without sacrificing their identities or chat histories when switching.
Coinbase Wallet has been at the forefront of promoting the adoption of Web3 usernames. It distributed free cb.id usernames to all users in September, leading to a surge in registrations. Web3 usernames allow users to send cryptocurrencies to easy-to-read names instead of complex strings of characters that form a crypto address.