Coinbase Launches Wallet as a Service. Details
- Coinbase believes WaaS will improve blockchain adoption.
- Coinbase has focused on building more tools for developers in addition to its wallet and crypto exchange services.
- Coinbase reported a loss of $2.6 billion in 2022, which was caused by a decline in trading activities.
Crypto exchange Coinbase launched a new service on Wednesday that it said would help more users embrace Web3 technology. The new Coinbase service simplifies digital wallets for businesses and is seen as a breakthrough offering.
The Coinbase Wallet as a Service is a collection of developer tools that enable businesses to integrate unique digital wallets into their applications. According to Coinbase, the idea is to bypass the technical aspects of the bulk of the existing standalone digital wallets and make creating a wallet as simple as generating a username and password.
WaaS offers businesses access to a wallet application programming interface (API) that enables them to develop wallets for user-friendly onboarding, loyalty schemes, or in-game purchases. Coinbase believes its new wallet service would change the existing narrative about Web3 wallets, which have struggled to gain widespread acceptance due to their poor user interface, complexity, and difficulties with storing mnemonic seeds.
Patrick McGregor, head of product at Coinbase’s Web3 Developer Platforms, was questioned about how WaaS resolves the challenges of Web3 wallets. He explained that the new solution offers “control over end-to-end product experiences,” a decrease in “implementation cost and complexity,” and assists businesses to improve security while minimizing risks.
McGregor added that the new service is “basically eliminating this huge source of friction for getting Web3 adopted.” He noted that Coinbase has effectively “created a system to give wallets to literally every human on the planet.”
The WaaS also features multi-party computation (MPC), in its toolkit. MPC is a type of encryption that enables multiple parties to collectively compute a function without disclosing their inputs. In a press release, Coinbase said that “MPC allows a ‘key’ to be split between the end user and Coinbase.” The company added that “this means if a company’s end user loses access to their device, the key to their Web3 wallet is still safe and can be securely restored.”
Coinbase believes its wallet-as-a-service could help developers and companies “bring the next hundred million customers into Web3 through a seamless wallet-onboarding experience.”
The announcement comes as Coinbase aims to provide more blockchain-based services to developers in addition to its existing services, such as the exchange and Coinbase Wallet. Coinbase recently increased its focus on subscriptions and services in response to a drop in the value of digital assets and a consequent drop in trading activity on the exchange.
Coinbase remains one of the leading exchanges in the United States but has suffered greatly from the crypto winter. The crypto exchange reported a loss of $2.6 billion in 2022, which was a huge distance from its $3.6 billion profit in 2021.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
