Coinbase, the largest U.S. exchange by trading volume, has launched a new service called Coinbase Verifications. The identity verification service enables over 100 million users to validate their account and country credentials on the blockchain. Announced Thursday, this initiative represents a significant step in decentralized identity technology.
The service operates on Coinbase’s Layer 2 network, Base, utilizing the Ethereum Attestation Service. This open-source standard ensures that verifications are transparent and interoperable. Within a day of its launch, Coinbase Verifications saw over 9,300 users attest to their credentials, per data compiled by Dune Analytics. This accounts for 15% of all Ethereum Attestation Service verifications to date.
The context of decentralized identity
Decentralized identity (DID) standards have been a vital yet missing component in the development of web3. These standards enhance protection against Sybil attacks and enable functionalities like unsecured loans for individuals and improved governance models. Coinbase’s move into this domain aligns with efforts by other organizations, such as Proof of Humanity and Fractal ID and tech giants like IBM and Microsoft. However, Coinbase’s approach, utilizing a public blockchain, distinguishes it in this emerging field.
Despite its broad user base, Coinbase’s identification service is currently limited to the countries where it operates. The development and adoption of decentralized identity verification services by major players like Coinbase signal a growing trend in blockchain technology applications beyond traditional finance. This could potentially lead to a network of interoperable KYC providers in the future, enhancing the security and utility of blockchain technology in various sectors.
