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Login with Coinbase Works to Widen Crypto Useage

bitcoin social trading

When Emilie Choi joined up at Coinbase, a higher level of M&A at the company was nearly a sure thing. She has spent the last few years making strategic acquisitions for Linked-in, and now it looks like she is helping Coinbase to do the same thing. Coinbase just picked up a five person company called Distributed Systems, but their emerging “Login” platform could be a major force in the online payments sector.

Login with Coinbase

Distributed Systems Team, Image from TechCrunch

Distributed Systems has been talking to Facebook, Robinhood, Binance, and Coinbase, according to their CEO, Nikhil Srinivasan. Apparently Coinbase won the company, and now three of the lead members of Distributed Systems will be working on Coinbase’s new Login platform.

The details on what Login will be are still sketchy. According to TechCruch, Login will be a, “platform for decentralized app developers to make it much easier for users to sign up and connect their crypto wallets.” This may only be the tip of the iceberg, as Nikhil Srinivasan asked TechCrunch rhetorically, “How can we allow that really rich identity data to enable a new class of applications?”

Coinbase is Going Big

It isn’t hard to see that Coinbase is setting it sights on a much larger presence in the online space. Nikhil Srinivasan and Distributed Systems co-founder Alex Kern are apparently going to form a new “decentralized identity team”, and develop the Login platform. After this takeover the Distributed Systems team will have access to the “know your customer (KYC)” data that Coinbase has on 20 million people that use its existing services.

The goal here is probably a next-level online payments platform, as well as a system that could be integrated with existing banking infrastructure. Reliable KYC data is a big part of getting through the regulatory barriers that have separated the crypto space from the established banking system. If Coinbase develops a payments platform that can replace something like, oh, lets say Visa, then their company could be in an incredible position going forward.

A KYC Nexus?

Establishing solid KYC data is fundamental to allowing crypto users to interact with established financial infrastructure. Unfortunately, KYC data is also some of the most valuable personal data there is. Whatever platform becomes the go-to destination for online identity verification, it is sure to be a target for the world’s best hackers.

Bitcoin Money Laundering

Read: Bitcoin and Money Laundering: Complete Guide to Worldwide Regulations

Coinbase is also going to face stiff competition from companies that are much, much larger then they are. Facebook’s David Marcus just left Coinbase’s board, and stated explicitly that it was so he would avoid a conflict of interest. All of this points to an upcoming race to create a workable online payments platform, which could be a winner-take-all game.

Even after the recent series of scandals, which involved the sale of ultra-sensitive user data, Facebook is still widely used, well funded, and has global name recognition. They also have an established messenger service that could easily be modified to make micro-payments, though their ability to reassure people about how they handle private data seems like a pretty big drawback for Facebook at the moment.

Social Crypto Could go Global, or Not

One thing that may be getting lost in all of this is the fact that cryptos like Bitcoin have been used as means of exchange for years. Many people who have used cryptos up to this point have done so specifically because they don’t require ID verification, nor do they involve third-parties.

A messaging app that acts as an intermediary for crypto transactions could help to widen the use of cryptos, but there are many other options that don’t involve companies that are clearly trying to grow into major commercial interests.

The platform that Facebook could be developing may end up looking something like Amazon Prime mixed with PayPal, but whether or not that will attract existing crypto users is totally unknown. Equally, many people that currently use platforms like Visa probably aren’t going to change their habits because Coinbase and Facebook are pouring money into a platform that could replace existing settlement systems.

One of the biggest attractions that cryptocurrencies have offered up to this point is the fact that major corporations and the existing banking system had no hand in their operation. A payments platform that is designed to work within the established financial system, and is under the control of a corporation like Facebook, may not have the level of market appeal that its creators hope it will.

The post Login with Coinbase Works to Widen Crypto Useage appeared first on Blockonomi.