Coinbase has traded a patent on a new bitcoin payment system designed to make cryptocurrency payments safer. The new platform will provide an additional level of security for user keys and enable them to make bitcoin payments directly from their digital wallets.
One segment of the patent repository states: "It could be a security issue for users that the private keys of their Bitcoin addresses can be stolen from their wallets.Existing systems do not provide a solution to maintain security on the keys private users, still allowing users to checkout [sic] on a merchant page and make payments using their wallets. "
If approved, the system would work by allowing customers to encrypt their passphrases in a master key to create an additional buffer against theft. The master key encrypts the private keys of the customers and the transactions carried out. Once the transaction is completed, the master key is deleted, ensuring that no external party can access the information. A new primary key is created for each transaction.
Another innovative element of the system is its "blocking logic", which would allow administrators to suspend the system and prevent transactions from occurring in the event of theft or cyber attack. The patent says: "At any time after loading the master key, the system can be frozen.The system can be unlocked after being frozen using the keys of the key ceremony.The checkout process can be performed when the system is frozen and when the system is unlocked The payment process can only be executed when the system is unlocked and not when the system is frozen. "
Finally, the application offers API integration functionality, which would allow various websites to run versions of the payment system. The API uses a specific pair of keys – one of which is stored on the corresponding website, the other on Coinbase – which must match for a transaction to be approved and completed.
This is not the first time that Coinbase has filed such a patent The company had tried for something like this nine times only in 2015, leading critics to accuse the exchange of attempts to create a monopoly on bitcoin services. The CEO Brian Armstrong denied this, stating that the company's goal was to keep the blockchain technology away from the "patent trolls".
"One of the best ways to defend yourself from patent trolls is to build your own patent portfolio, and that's exactly what we're doing, along with almost every other technology company out there," he wrote in a blog post. "It's an unfortunate game that we all have to play, but we have not invented the rules."
The company also filed a patent in 2016 to protect Bitcoin-based private keys.
In addition to Coinbase, several traditional financial institutions have filed blockchain-based patents. Bank of America has deposited around 50 patents live in the blockchain space, more than any other company. The software giant IBM also has several in it, including one for "the characterization of the node in blockchain", which would allow a distributed ledger to host a series of nodes characterized by specific functions.
Last June, the UPS delivery company also filed a blockchain patent for what it calls "autonomous service selection system and distributed transport database". Whenever something is delivered from one point to another, it must go through multiple networks and segments before it reaches its destination. This makes it difficult for logistics services to coordinate with each other. The patented system would generate transport data sets that will then be stored securely on a blockchain and easily monitored to ensure that logistics companies meet the management requirements appropriately.