Coinbase Wallet Introduces WhatsApp-Like Messaging

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Coinbase Wallet, a self-custody crypto wallet, is introducing a direct messaging feature that enables users to communicate with each other on the platform.

The new feature, which is powered by the Extensible Message Transport Protocol (XMTP) protocol, will allow users to send and receive messages to other users on the wallet using their blockchain addresses.

Direct Messaging on Crypto

The Coinbase Wallet is a platform that allows users to connect with Web3 and blockchain-based websites and services, collect NFTs, purchase and sell cryptocurrency, and bridge digital assets between networks.

To communicate with other users concerning transactions, however, users would use third-party messaging platforms such as Twitter, Discord and Telegram. This would result in an external back-and-forth when attempting to confirm transaction details making the process lengthy and prone to fraud.

The messaging feature will allow users with cb.id, .eth, or Lens usernames to send messages to each other. According to Coinbase, the messaging feature is end-to-end encrypted providing privacy and protection from third-party access.

Coinbase's addition of a messaging function to its crypto wallet opens up new communication possibilities for Ethereum users. It's a significant integration with a large user base, enhancing the overall experience.

— Lecca Intern 🚀 (@leccaintern) July 13, 2023

Similar to Whatsapp, the feature also offers the option to block accounts that one would prefer not to receive messages from.

One of the reasons for the feature’s release, according to Coinbase, was to reduce fraud in the cryptocurrency industry. Sending messages directly to the recipient’s Web3 identity aids in the prevention of issues like unintentional cryptocurrency transactions to the incorrect address.

Users are also protected from false claims of .eth address ownership, and fraudulent profiles on social media claiming to hold wallet addresses. The messaging feature might “eliminate unnecessary risk and potential losses”, says Coinbase.

Speaking to TechCrunch, Siddharth Coelho-Prabhu, director of product management at Coinbase said:

“You won’t have to worry about if you’re actually talking to Punk6529, you can see their balances and transactions — and that level of safety, security and convenience is a big upgrade.”

Decentralized Communication

Normally, messaging features are centralized and customized to fit the platform. With the aim of making communications decentralized, Coinbase chose the XMTP protocol which will allow users to retain and continue their conversations on other XMTP-based applications such as Lenster or OrbApp.

“You can now take your messaging data and chats with you because they’re tied to your wallet address and not a single company. You can take your chats to any other XMTP-compatible app at any time. Your chats will transfer automatically, so you can focus on connecting,” the crypto firm explained.

XMTP chat as a function of a wallet is absolutely genius

I've explored building a chat app and there are several great teams working on decentralized messaging but this model honestly makes the most sense

Coinbase Wallet is the new everything app

— Tom (@thomasjeans) July 12, 2023

The feature is still in its initial rollout stage and is available to users who scan the QR code on the company’s blog post or those with a Lens profile. With time, it will be made fully available to all the 1.3 million Ethereum addresses in the 100 countries where the Coinbase Wallet is accessible, based on its Q1 2023 shareholder letter.

Aside from sending messages, the new feature will also provide the chance for new connections in the NFT space. NFT and POAP owners will be able to communicate directly with other individuals who own the same asset as them. They also have the option of presenting an offer to a holder of an asset they are interested in.

This development presents a new front in the crypto space. According to Coelho-Prabhu, there are two distinct groups of people who will adopt the messaging feature. One is those who seek more trustworthy interactions to transact money.

The other group is made of early adopters who are native to the ecosystem and looking for methods to connect with other like-minded players in the market. “Even without crypto transactions, the idea that communication can happen under this paradigm is new,” he says.

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