Coinbase Is Planning a Year-Long Decentralized Identity Experiment

Crypto exchange turned corporate unicorn Coinbase has a 17-person team currently exploring decentralized identity solutions.

B Byrne, the product manager of Coinbase's identity team, told CoinDesk he wants to "Help people own more of who they are online."

Revealed exclusively to CoinDesk, Byrne's approach relies on creating bridges between Coinbase products, such as its mobile wallet, with a built-in decentralized application explorer.

In Byrne's mind, the best way to start lies in identifying a small segment of Coinbase users who would gain real value from controlling more of their personal data, rather than Coinbase repeatedly collecting and storing their know-your-customer information across the platform's products.

Although Allen is urging companies like Coinbase to take a more active role in these standards-building efforts - arguing that at least 5 percent of a tech corporation's budget should be devoted to community contributions - Byrne said Coinbase is hesitant because such efforts are still too academic and might distract from the daily priorities of serving customers.

Coinbase's VP of corporate and business development, Emilie Choi, told CoinDesk there aren't plans so far to delegate a portion of the $300 million Series E that Coinbase raised in October to the identities team or related community projects - aside from perhaps hiring at least three more digital identity experts.

By starting with a few Coinbase Wallet users, Byrne's team hopes to find niche groups that could benefit from partially decentralized identity solutions in specific, regulator-friendly contexts.

Coinbase's Byrne generally agreed with this distinction, adding "At this point, it doesn't feel like there's a clear standard that we've agreed on that solves a problem." He said it would be a steep commitment for Coinbase to be involved with each group that is currently working on its own identity standards.

Even if Byrne's team develops identity solutions that reduce cross-platform friction or increase customers' privacy, these solutions will probably rely on public tools and protocols that exist beyond Coinbase.

Without commenting on any specific resources or priorities, Byrne agreed Coinbase would need to commit to keeping the infrastructure for future solutions "Healthy." Byrne also expressed curiosity about how Coinbase could someday take a more active role in community efforts.