Coinbase Acquires Digital Identity Company to Expand Their Portfolio of Services
Coinbase, Inc is one of the world’s largest digital currency exchange platforms supporting 32 countries and with a total of US$1 billion revenue for 2017. Ever since it was founded in 2012, it grew to have over 13 million users worldwide and it currently holds more than $20 billion in digital currency. Coinbase offers several core products – trading tools and services for buying, selling and exchanging cryptocurrency for fiat money and others. The services and tools consist of:
- former GDAX – a Global Digital Asset Exchange, evolved into Coinbase pro (professional individual trading platform) and Coinbase Prime – a trading platform for institutions
- Online Digital Wallet
- Paradex – used for trading Ethereum tokens
- Asset management
The cryptocurrency coverage that Coinbase has is for Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
Coinbase has recently acquired the digital identity start-up Distributed systems, Inc with the idea to incorporate decentralized digital identity features and tools in their products and services.
Before going into further details, let us clarify what the term ‘digital identity means, to help you understand what companies working on decentralized digital identity are basically dealing with. Digital identity can be described as the cyberspace equivalent to the actual (analog) identity. What it represents is the collective set of information about an individual, organization or device, which exists online, only in a digital form. It requires not only identification (stating who you are) but also authentication or validation (proving you are the person you say you are). Some of the features that form a person’s digital identity originate from the personal information (some elements of their real identity such as name, date of birth) they use or have used online along with the shadow data constituting user’s actions online. Deriving from our daily activities and actions on the web, the shadow data is often generated automatically, not created intentionally.
Digital identity usually consists of data attributes and characteristics such as:
- Username, unique ID, and password (might be a name or email or pseudonym)
- Online search activities
- Date of birth
- Purchase history or behavior
- Date of birth
- Name
Continuing with the topic of the Coinbase acquisition of Distributed Systems, Inc, it is important to note that the newly found San-Francisco based company has been working on decentralized digital identity solutions – such as open identity standard, for DApp users, called Clear Protocol. Five employees of Distributed Systems will be joining the Coinbase Identity team and will be working to create a service which provides users the opportunity to have more control over their data and privacy.
According to TechCrunch, Coinbase managed to win over the promising start-up, which had been in talks for acquisition with two or three other major tech companies, so that they can work on an identity platform, potentially called “Login with Coinbase” (similar to Login with Facebook). They are hoping to build a native SDK (software development kit) for their platform, which will aim to ensure safer identity even than the one we have offline. However, this objective might face numerous challenges and it would require a lot of work. Plus, it is still somewhat unclear how exactly that technology would work and Coinbase are not sharing any further details as of now.
Allegedly, Coinbase is planning to build this platform which other apps can integrate as a means of facilitating the users to sign up and connect their wallets to other software services without the need of creating a whole new account. This will allow Coinbase to broaden the scope of their services even beyond the Cryptocurrency market.
Coinbase has previously taken over other companies like Keystone Capital Corp., Paradex, Cipher Browser, Venovate Marketplace, Inc., and Digital Wealth LLC in order to expand their portfolio of services and improve them.