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Currently no its really to inefficient, group encrypted chats would only make it worse to deal with.
Its one of the reasons we have listed to likely being after launch since there needs to be some consulting. That stuff would have be stored via database for now unless we make a plugin for the witnesses to run. But even that limits users to so many seconds between replies, if its just like text yeah it will work if its more like an "IM" well it kinda needs to be instant. If anyone has a better solution we are all ears for sure. Anything that helps with decentralized chatting I'm for sure interested in hearing.

Have you looked into the XMPP (Jabber) protocol? It supports federation ... maybe WebRTC or something and make each client a user... or maybe adapt it... I will have to think a little more on this.... maybe a sister temp block chain for chats that's faster... just thought diarrhea here lol

Well thanks for your thoughts.

Is this open source? Where is the repo if so... I might experiment with a few IM ideas if I get any.

Sweet, and makes sense. Over the course of steem's history I've talked to a few people about wanting to store encrypted/private information on the blockchain - it almost always is a bad idea :)

Good to hear you're going the database route for the time being!

Yeah i figure its best to go the way we know will work then to go the route we know might fail.