PayPal files patents for an “expedited virtual currency transaction system”

PayPal

While PayPal has previously signaled its willingness to accept cryptocurrency as tender, the company has now outlined its own expedited transaction system in a new patent filed with the United States Patent and Trademark Office.

The filing, published on March 1, details a new method wherein the private keys used to control one’s cryptocurrency holdings are swapped between a buyer and a merchant.

The concept – which would reduce the amount of time required for a transaction to authorize between a consumer and a merchant – would leverage a secondary wallet system that could transfer private keys for an exact amount (or payment) of any given cryptocurrency.

A new way to transact

As the patent describes, ‘expedited virtual currency transactions’ are facilitated by firstly identifying a user’s primary wallet associated with a virtual currency, and then including a private key to that wallet.

Thereafter, a secondary wallet is created that holds a respective private key.

A virtual currency transaction is then performed by using the primary wallet private key to transfer predefined amounts of a virtual currency from a primary wallet to a secondary wallet.

An instruction is then received to transfer a payment amount to a merchant, and the merchant is then allocated a subset of a consumer’s secondary private keys tied to a secondary wallet containing predefined amounts of the virtual currency intended for payment.

The patent describes that the system “practically eliminate(s) the amount of time the payee must wait to be sure they will receive a virtual currency payment in a virtual currency transaction”.

The submission marks PayPal’s most overt expression of interest in digital currencies yet, despite its frequent partnerships with Bitcoin payment processors in the past.

The move might well be tied to PayPal co-founder Peter Thiel’s interest in cryptocurrencies – the entrepreneur has reportedly invested heartily in Bitcoin through his venture capital firm Founder’s Fund.

Have your say!

What are your thoughts on PayPal’s patent filing? Could the proposed system be a key means to alleviate transaction times between consumers and merchants? Be sure to let us know your opinion on Twitter – join the conversation @coininsidercom!

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