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PayPal has filed a patent to speed up cryptocurrency transaction times by eliminating payment verification time. Bitcoin expert says that this is already made possible through existing technologies in the cryptocurrency industry.
On March 5, 2018, Cointelegraph reported that PayPal has filed a patent with the US Patent and Trademark Office (USPTO) for a technology that is supposed to accelerate cryptocurrency payments through the use of secondary wallets .
Essentially, PayPal seeks to optimize the process of payment of cryptocurrency payments between merchants and buyers on retail or e-commerce platforms. Users’ secondary portfolios, as described in the official patent, would allow behind-the-scenes transfer of the unique private keys of buyers and sellers, to prevent each transaction from being included in blocks and disseminated to the public Blockchain.
The patent strongly emphasized that the transaction verification system including payments in blocks has limited the potential of cryptocurrencies like Bitcoin.
“In order to be sure that the Bitcoin transaction will ultimately result in a transfer of Bitcoins To the payee, the payee must wait until the process of extraction confirms the transaction before transferring goods and / or services to the payer In many transaction situations, a waiting time of 10 minutes will be too long for the payers and / or beneficiaries, and these payers will instead choose to perform the transaction using traditional payment methods rather than virtual currency Problems like this have slowed the adoption of virtual currencies despite their advantages. “
Bitcoin developer Peter Todd answers
] Peter Todd, Bitcoin developer and consultant in applied cryptography, said that PayPal is trying to patent a technology that already exists in the cryptocurrency industry, developed by Opendime.
Looks like PayPal is trying to patent @ OPENDIME # ShittyPatentshttps: //t.co/zj7C80QR2d
– Peter Todd (@peterktodd) March 5, 2018
Established in 2016 through a former Bitcoin Coinkite marketplace, Opendime is a Bitcoin hardware wallet with multi-signature bank security. It allows users to transfer Bitcoin with internal private keys, with the vision of allowing users to use Bitcoin as currency, such as the US dollar.
Opendime is structurally different from other material portfolios like Trezor and Ledger, which can be reused. Opendime is a USB key that can only be used once, like a piggy bank. The USB drive must be destroyed to use the funds stored inside, which allows it to be used as cash.
The patented technology of PayPal and Opedime is similar in that private keys are exchanged backstage. an instant way. As the Opendime team explains, “Since we place private keys in a physical form that you can trust, you can simply switch Opendime units to move amounts.” There are also no predefined amounts of Bitcoin with Opendime. Store as much or as little as necessary.
The Bitcoin payment transfer process with Opendime is similar to PayPal PayPal’s technology encourages each user to transfer an entire wallet or private key associated with a predefined amount of a cryptocurrency, such as The patent:
“The systems and methods of the present invention virtually eliminate the duration the payee has to wait to be sure that he will receive a virtual currency payment in a currency transaction. virtual by transferring to the payee private keys included in virtual money portfolios associated with predefined amounts of virtual currency that correspond to a payment amount identified in
Can PayPal’s technology optimize cryptocurrency payments ?
If PayPal’s technology can be implemented on a large commercial scale, it could allow instant processing of cryptocurrency transactions between merchants and buyers. off-line, eliminating significant transaction costs and, especially, long verification periods.
[1 9459009] Recently, the leading hotel reservation platform in South Korea, Yeogieottae, has partnered with Bithumb, the country’s largest currency exchange purse, to accept cryptocurrency payments. In Japan, the biggest retailers in the country such as Capsule, the airline Peach and Bic Camera have been accepting Bitcoin payments for a while.
PayPal’s low-cost, cryptocurrency payment processing system could allow retailers to process payments for users without having to deal with long-term verification periods.
But, a problem could arise in the private key transfer process, if this settlement occurs off-line, centrally. PayPal’s patent explicitly explained that it could rely on a payment service provider to settle payments, which could lead to a centralized system overseeing the transfer of private keys.
“In a specific example, a payment service provider such as, for example, PayPal, Inc. of San Jose, California, may use a payment service provider device to perform the method 100 [ private key transfer method PayPal – Cointelegraph ] and, in some embodiments, may cooperate with one or more other system providers (via their system provider devices) and / or users (via their user devices ) to perform the process 100 described below. “
Owen Williams, a technology-based podcast host, revealed the results of GDPR, which revealed that PayPal shared sensitive financial data from its customers with more than 600 entities.
With GDPR, we now know who PayPal shares data with (more than 600 entities) https://t.co/Fz97Ec3GLA pic.twitter.com/JKCQk4vCH1
– ⚡️ Owen (@ow) March 4, 2018
The centralization of cryptocurrency payments and private keys can lead to vulnerabilities and the sale of data unless PayPal’s technology can use non-proprietary portfolios and allow merchants and users to maintain full control over their private keys throughout the process.