Coinbase, one of the largest cryptocurrency players, has acquired blockchain startup Distributed Systems, which focuses on identity standards for decentralized applications (dApps), Coinbase identity project manager P. Byrne said in a blog post on Wednesday.
According to Byrne, blockchain technology offers a chance to put control back into users’ hands by allowing them to manage their data on the Internet. For Coinbase, the acquisition is a means to push forward plans for a blockchain-based identification system that will make virtual currencies and their system more widespread.
“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. 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 wrote.
The Coinbase decentralized system will be like a ‘Facebook Login’ button, Distributed Systems CEO Nikhil Srinivasan told TechCrunch. He and Distributed Systems co-founder Alex Kern will create a new Coinbase team for the decentralized identification system, with Byrne put in charge of the project. The blockchain-based login will use KYC data from the 20 million customers of Coinbase with the aim to boost the dApps. According to Srinivasan, the main challenge for this project is to determine how “that really rich identity data [can] enable a new class of applications.”
Distributed Systems had held informal talks about an acquisition with several other technology groups, including Binance, Robinhood, and social media giant Facebook. It decided to accept Coinbase’s offer because of the Login project. Besides Srinivasan and Kern, the rest of Distributed Systems’ staff will also work with the Coinbase team that is responsible for the decentralized mobile browser and the Toshi wallet, which were rebranded as dApp Browser and Coinbase Wallet on Wednesday.