PayPal Files Patents For a Faster Cryptocurrency Transactions Technology
The revolutionary Blockchain technology that allows for instant payments at reduced costs has caused several financial institutions and services to shift from the existing system to the new platform. The Global electronic payments firm ‘PayPal’ is working on new ways in order to further boost the speed of cryptocurrency payments.
The patent application "Expedited Virtual Currency Transaction System" filed on March 1, proposes for a new method wherein the private keys - a string of letters and numbers used for transacting and controlling one’s crypto holdings - are swapped between the buyer and the seller in an anonymous manner behind the scenes.
The major aim of the new system proposed by PayPal is to further reduce the total time taken by the transaction to go through from a consumer to a merchant, avoiding the process of transaction and waiting for it to be included in the next block.
In other words, the transactions take place ‘off-blockchain’ thereby creating secondary wallets having their own unique private keys for buyers and sellers. The system is designed in a way such that it allows to transfer the private keys corresponding to the exact number of any given cryptocurrency.
The official patent filing explains that “The systems and methods of the present disclosure practically eliminate the amount of time the payee must wait to be sure they will receive a virtual currency payment in a virtual currency transaction by transferring to the payee private keys that are included in virtual currency wallets that are associated with predefined amounts of virtual currency that equal a payment amount identified in the virtual currency transaction.”
Note that this is just a patent at the moment and it is still not clear as when the system will be introduced in the crypto markets and which cryptocurrencies would be compatible with it. PayPal’s system is the latest one which demonstrates to solve the scalability issues on the blockchain network and joins other protocols like the Lightning Network on the Bitcoin blockchain.
Note that this is not the first experiment by PayPal in the blockchain space. Back in 2014, the global payments services giant announced its partnership with three crypto payments exchanges - GoCoin, BitPay and Coinbase.
Peter Theil, PayPal co-founder is also heavily invested in Bitcoin via the ‘Founders Fund’, a Silicon-Valley based VC firm that he co-founded himself. Last year in October 2017, during an interview with Fox Business Network, Theil said that the world was “underestimating [Bitcoin] especially because … it’s like a reserve form of money, it’s like gold, and it’s just a store of value. You don’t need to use it to make payments.”