What does Coinbase Wallet’s latest DM feature mean for the ecosystem?


An illustration of email icons floating around in blue and green.
Image Credits: MirageC (opens in a new window) / Getty Images

Crypto exchange Coinbase has launched a direct messaging feature on its wallet app, negating the need to copy-paste 42-character wallet addresses to and from other messaging platforms to send or receive digital assets, the company exclusively told TechCrunch+.

The feature also lets NFT and POAP holders connect with others who own the same asset by directly messaging their address.

All messaging is encrypted, Coinbase says, and is powered by XMTP, the open source messaging network. The inbox is also portable, meaning that messages, interactions, transactions and profiles can be transferred to platforms that are compatible with the network.

Coinbase Wallet launches messaging feature so users can interact directly on its platform

But that’s just the news. What is this new feature really good for, and how will people use it? We had a few thoughts:

Jacquelyn Melinek: Alex, you’ve been covering crypto for more than a decade now. What does this news mean to you?

Alex Wilhelm: I find it pretty bullish! One complaint that I have had with crypto in general is that it has long felt too financial. As someone who doesn’t really love spending time doing accounts, I have never really wanted an entirely new way to make my life more accounting-based.

I have to say, though, that adding messaging to wallets seems to transform them into something far more? So much so that calling them wallets seems like a bit of a misnomer. Perhaps we should call them identities?

Regardless, I am very curious to know if this is a feature that the crypto community writ large has been asking for or working toward. From my limited vantage point as someone who spends more time in meetings than breathing, it’s de novo!

JM: I think this feature isn’t necessarily something that has been asked for, but it would be helpful. Kind of like when I order takeout, I don’t always think to get cutlery (it’s not always necessary), but when I do, I’m like, “Great! A fork! I don’t have to do dishes!”

There’s also two buckets of users that this messaging is for: those who are solely looking for a more cohesive way to trade assets, and those who are trying to engage with the community. I spoke with Siddharth Coelho-Prabhu, director of product management at Coinbase, about this and he sees it that way as well.

It’s for the novice who may be nervous about sending funds and is double- and triple-checking to confirm that the address they copied to send crypto to is correct, and all the way to the seasoned crypto-native trader or community member who can transact with their eyes closed.

I think it also speaks to people wanting a unified space to talk and work with others in the community. Many people in the crypto world use a number of different applications to communicate, from Twitter and Discord to Telegram, Signal and WhatsApp. It can get complicated and confusing at times. I lose messages frequently because I just don’t have time to check every direct message I get. So having the option to be connected via a wallet address — and being able to directly engage with it — could be a game changer.

Do you think this opens the door to mainstream users or is it mainly for the crypto-centric world? What would it take to bridge that gap?

AW: OK, that was a lot, so let me hit on a few points. First, if messaging and wallet-to-wallet communication can help reduce the rampant fraud issue that crypto users deal with, then I give it a full cheer. It’s painful to read the frequent horror stories of folks who made a single mistake and then had their entire wallet drained. Of course, the scammers out there will update their tactics to exploit the new messaging service, but anything that makes crypto safer is a way to make it easier to use and adopt, so that’s cool.

For now, this feels very crypto-centric. I doubt anyone outside of currently active crypto users will want another messaging service, apart from folks who are hunting for a new encrypted chat service — I doubt that that is a very big group. For crypto users, however, this seems like a pretty obvious thing to build.

That said, if someone built a chat service that had a traditional UI atop this infrastructure, I could see it reaching mass adoption. But since the service is not on-chain and is instead more webbing between chains built by a centralized company, that would only be so “web3,” I suppose.

Can you help me understand just how big the opportunity is here? How many folks are using wallets today, and what sort of share does Coinbase have? I am trying to sort out what “scale” of response we can or should expect.

JM: Coinbase Wallet is available in over 100 countries and is one of the biggest crypto wallets out there. Given that its parent, Coinbase, is the second largest crypto exchange globally, it makes sense that users of the exchange also use its wallet. Similar to how I use Google products for my email, browser, and so on. Sometimes you just stick with the brands and companies that you know.

But some people might choose to have a Coinbase Wallet in addition to other wallets in other locations.

I think the other major crypto wallets are also focusing on expanding their product offerings, making security a bigger focus and going multichain. In April, Phantom, a crypto wallet that was once only for Solana blockchain users, started supporting the Ethereum and Polygon blockchains.

Coinbase Wallet supports hundreds of thousands of coins and decentralized applications but is focused on the Ethereum ecosystem. It’s also worth noting that Coinbase’s CEO Brian Armstrong recently said he thinks the company could become a “super app.”

Do you think this announcement is a move toward that goal? Can it give Coinbase an even stronger position when operating with institutions and retail players?

AW: Yes, this is certainly a move in the direction of a super app. Armstrong’s comments actually mesh well with what I consider to be the crypto-bull perspective. It goes something like this: Decentralization of ownership and control via blockchains is the future; therefore, many currently off-chain applications and services will be increasingly brought on-chain over time.

Now, Coinbase’s messaging service is not on-chain yet, but it certainly fits into that directional shift.

Regarding institutional investors and retail users: This is certainly aimed at the latter. I don’t think major players in finance are about to risk messaging through a fully encrypted service that is tied to crypto wallets, as I think it might give regulators conniptions. But a likely impact zone constrained to retail is not bad, given that super apps are built for consumers, not capital pools.

TechCrunch+ will circle back in a few weeks with what we can uncover regarding the uptake — or a lack thereof — of the new Coinbase messaging service to see how it is performing in-market.

More TechCrunch

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

5 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

2 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?