Meet the wallets of the future: Coinbase Wallet & Trust0.3

Digital wallets are becoming more like browsers, if products like Coinbase Wallet and Binance's Trust are any indication. These and other wallets will become the primary means through which users interact with blockchain, writes FlatOutCrypto. 

I previously looked at the way crypto wallets are expanding to meet a range of new use cases, and how they will likely continue developing in future. Today I will turn the focus to some of the projects leading the charge, including a duo of wallets owned and funded by two of the largest firms in the crypto space.

Coinbase Wallet, formerly Toshi, is one of these well-resourced wallets. Coinbase launched Toshi in April 2017, intended to operate as a mobile web browser which enabled access to a select number of Ethereum based DApps. They subsequently also acquired Cipher, another DApp browser.

Coinbase’s main business operates on a custodial basis – if you keep your crypto on Coinbase then you are trusting them with its safe storage. Coinbase Wallet, however, returns that control to users. This allows for a wider remit, including allowing for the storage of cryptoassets, crypto collectibles (such as CryptoKitties and other ERC-721 tokens), the reception of airdrops and ICO tokens and generally moving from an auxiliary app to an end to end solution designed to eliminate the need for a desktop.

 

This shift is an acknowledgment that, whereas to date companies in the space have generally earned outsized profits from enabling speculation on crypto, the next stage and thus profit driver will come from enabling access and usage of crypto DApps.

You can imagine a wallet as an iPhone...it is an interface to connect and interact with many applications...it will grow into your personal bank and digitial identity - Viktor Radchenko, founder of Trust Wallet

This ties in with Brian Armstrong’s, Coinbase CEO, comments that the next wave of crypto users will come from those earning it – not buying it. For Coinbase, a company which prides itself on complying to regulatory approvals, it also provides them with a product they can use in markets they are yet to be regulated in or which they are never able to seek such approval given their US base.

Brian Armstrong
@brian_armstrong

3/ Those people will get their first crypto by earning it, not buying it. Completing a task, or finding a job (employment!) in the gig economy, will be a major gateway for people to obtain their first bit of cryptocurrency.

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This shift from investment to usage can also be seen in the acquisition of Trust Wallet by Binance, the exchange juggernaut. Trust Wallet has similar aspirations to Coinbase Wallet but will also function as a default wallet upon launch of Binance’s forthcoming decentralized exchange. Viktor Radchenko, Trust Wallet founder, commented that "Trust will be the first wallet to have the Binance DEX integrated natively".

Trust Wallet, which launched in November 2017, will similarly provide Binance with a user custodian wallet as opposed to its own exchange business where it acts as custodian.

A perhaps overlooked aspect to both Trust and Coinbase Wallet lies in the user data that the leading wallet will likely collect. The current cohort of web giants are built upon access to user data. If there was a shift from the current web to a DApp based ecosystem, then so too would access to data change. Although Radchenko noted that "the only thing we collect is crash reports and daily usage of the apps to improve user experience...there is an option to disable it all in the app and all data is anonymized", even if current offerings do not track or share data there are no guarantees that future developers won't.

This data would not be useful solely for traditional marketing usage, and chain analytics will become an ever-important area. There are companies such as Chainalysis already in the space, and if significant amounts of economic activity begin to be transacted over public blockchains then this area will explode in value and activity.

Although there is no indication that Trust or Coinbase Wallet will record user data, it will inevitably provide a competitive advantage – and lucrative business opportunity – should they garner significant amounts of traffic and elect to make use of this information.

Developing new wallets is not confined to large entities, with the likes of Balance also developing mobile first wallets. Balance addresses similar issues to both Coinbase and Binance, but also tackles another pain point – the inability to easily connect desktop DApps with mobile wallets. WalletConnect solves this problem, using a QR code to enable the interaction (in a similar fashion to how WhatsApp works when you try to link your account to your laptop or tablet).

Balance
@Balance_io

You can use Manager to make a trade and confirm it on iPhone using Wallet.

Log in with @WalletConnect, click Exchange, tap on the notification and approve the transaction.

If you’re a dapp developer, reach out to @pedrouid to learn more.

TestFlight: eepurl.com/dBXdeX

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Richard Burton, Balance co-founder, outlined additional use cases at ETHBerlin that Balance aims to tackle such as staking. This is a use case which will only rise in popularity as more Proof of Stake chains come online (particularly once Ethereum makes the transition from Proof of Work to PoS) yet can remain a difficult process for the less technical.


Meeting new use cases will be key

To date there has been limited investment in wallets, although there are others not mentioned in this article (such as Status, Eidoo, Ethos, Enjin and Bread) which have raised substantial proceeds at ICO and other wallets which have received funding (MyCrypto and imToken for example). However, the sums raised are dwarfed by the wider ICO landscape, which has seen billions flow towards protocols and DApps.

Wallets will become the primary means through which users interact with blockchain, particularly the expanded use cases of the smart contract protocols. As such it is inevitable that the number of competing wallets is going to rise in coming years as we move from speculation to adoption – the potential prizes are too rich for it not to.

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Comments1

Absolutely, wallets will become the primary means to blockchain. However, smart contract protocols are not expanded at all now :(