Coinbase has taken a significant step toward building on its blockchain-based identity security efforts by acquiring Distributed Systems, a five-person strong San Francisco-based startup, which has been developing an open identity standard for decentralized apps, or dApps.
According to TechCrunch, three of Distributed Systems’ team members will work with Coinbase’s Toshi decentralized mobile browser team, while CEO Nikhil Srinivasan and co-founder Alex Kern are going to form a newly created decentralized identity team that will work on a “Login with Coinbase” product, described as an “identity platform for decentralized app developers to make it much easier for users to sign up and connect their crypto wallets.”
TechCrunch compares the “Login with Coinbase” product to Facebook Connect, which allows people to interact with other partner websites by using their Facebook account. But crucial to Coinbase’s efforts – and in stark contrast to Facebook’s handling of user data – is developing a way to decentralize identity to protect it online.
“As we continue our work to bring cryptocurrency into the mainstream and help create an open financial system, it’s important that we continue to find new and innovative ways of validating and verifying identity,” B. Byrne, Coinbase’s PM for Identity wrote in a blog post. “Blockchain technology that powers cryptocurrencies offers a new way to let us all be ‘verified’ everywhere we go on the internet, feeling safer about our interactions with others and opening the door to the experiences that require trust.”
Byrne writes that there will continue to be “new questions to answer about anonymity, privacy, and how permanent the different pieces of our identity should be” as our presence online continues to grow.
“But ultimately, decentralizing online identities will transform our relationship with technology,” he adds.
Wired points out that Coinbase’s acquisition of Distributed Systems “joins a string of acquisitions in recent months aimed at diversifying the Coinbase’s offerings beyond its cryptocurrency exchange.”
“In an industry rife with fraud, the company has leveraged its reputation for relative safety and approachability to become popular with retail investors,” Wired‘s Gregory Barber writes.
Coinbase has valued itself at roughly $8 billion, according to Recode.
Photo: Coinbase