Coinbase, the largest crypto broker in the US with over 25 million clients, has acquired a domestic firm named Distributed Systems Inc., which offers decentralized identity solutions. The acquisition was made in an effort to improve the login and verification process presently employed by Coinbase.
Coinbase project manager Byrne stated that Distributed Systems was selected in order to make use of blockchain technology for verification purposes. According to Byrne, the use of blockchain technology for verification process will ensure better security to clients.
Byrne said
“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.”
Distributed Systems was established in 2015 to create an identity standard for DApps, referred to as the Clear Protocol. The company raised seed funding of $1.70 million. Distributed Systems had plans to raise between $4 million and $8 million later this year through another round of funding. However, it may not be required now as the firm has been acquired by Coinbase.
Nikhil Srinivasan, CEO of Distributed Systems, said “no one really understood what we’re building.” He further stated that once Coinbase evinced interest after studying the KYC potential of the platform, but added that once that Coinbase others “quickly tried to move to find a way to acquire us”.
Byrne is of the opinion that the acquisition will pave way for the establishment of a more secure proof of identity protocol using the technology developed by Distributed Systems.
Byrne said
“…let you prove that you own an identity, or that you have a relationship with the Social Security Administration, without making a copy of that identity.”
