One of the big reasons people hated on passkeys and smart wallets: a passkey is only accessible from a specific domain, meaning Coinbase could technically block you from your funds.

No longer! Coinbase Smart Wallet now has recovery keys (this was always their plan).

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Is the recovery key different than the seed phrase? Especially with services like icloud it's definitely a step up for people not having to manage 12 words in a piece of paper, that was never going to work for the common folk

It’s tricky because if you lose your passkey you probably also lose your iCloud. This is sort of extra advanced security for those who want it. Even a company as focused on UX as Apple can’t avoid “write this down” as the ultimate backstop.

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ahh that's sound tricky indeed, crazy "we" haven't come up with a better solution that would work for all 🤔

The recovery key is a seed phrase right now. 

I'm sure they'll make it easy to save to iCloud later. Progressive roll outs and all.