PayPal Files Patent For "Virtual Currency Transaction System"
Content adapted from this Zerohedge.com article : Source
When will online retailers get into the cryptocurrency game?
Of course, the biggest fish in that pond is Amazon, a company subject to many rumors.
One online organization that is starting to move in that direction is PayPal. On March 1, it filed for a patent to speed up cryptocurrency transactions.
Expedited virtual currency transactions are provided by identifying a first user primary wallet associated with a virtual currency and including a first user primary wallet private key. First user secondary wallets are created that each include a respective first user secondary wallet private key, and a respective virtual currency transaction is performed using the first user primary wallet private key to transfer predefined amounts of the virtual currency from the first user primary wallet to each of the first user secondary wallets such that first user secondary wallets are provided with different predefined amounts of the virtual currency. Subsequently, an instruction is received to transfer a payment amount to a second user, and the second user is allocated a subset of the first user secondary wallet private keys included in respective first user secondary wallets that are associated with predefined amounts of the virtual currency that equal the payment amount.
We shouldn't however expect a Paypal Lightning Network or anything close to that any time soon. There is currently a global race to file patents for everything crypto or "blockchain" related and the company might just be strengthening its portfolio for future patent battles.
The patent filing deals with one of the main points of contention with cryptocurrency as a method of purchase. There is a long delay from the time the transaction is intitiated until confirmation. PayPal seeks to speed up this process to enable cryptocurrency to be used like other methods of payment.
"In many transaction situations, a 10 minute wait time will be too long for payers and/or payees, and those payers and/or payees will instead choose to perform the transaction using traditional payment methods rather than virtual currency. Issues like this have slowed the adoption of virtual currencies despite their advantages. Thus, there is a need for an expedited virtual currency transaction system," explains Paypal
When news of the patent filing broke, Wall Street pushed PayPal higher.
Acceptance of cryptocurreny as a form of payment by a major online merchant or two would go a long way to giving it the boost many are looking for. PayPal might be one of the players to bring this to reality.
Non-adapted content found at zerohedge.com: Source
PayPal had no choice with the rate at which payment services are changing which was bringing them out of business. Cryptocurrency was becoming a huge threat for the future of PayPal.
But for now am glad they have come up with a system boosting the speed of it's cryptocurrency payment services.. and they have gone far with this transition by detailing a method by which the private keys are swapped from a buyer to the seller.
This will put stop to the frustrating time of waiting for a transaction one has sent to be included in the next block of the network; thus lessening the amount of time it takes for payments to go between a consumer and a trader.
PayPal, like the banks, could be at risk by cryptocurrency. PayPal is the proverbial "middle man" which means that fully embraced cryptocurrency could spell the end for them.
It makes sense to embrace it to try to delay this happening. And who knows, PayPal is a very popular brand...perhaps people embrace them more than using crypto direct.
Or maybe the flip side is for PayPal to market to online retailers and handle the transactions for them.
It is very fascinating to see how traditional companies are positioning themselves with crypto.
Yes, PayPal is the "middle man", and could someday be at risk because of cryptocurrencies. However, in it's infant stage, I believe it is super important that big companies get involved with cryptocurrencies. I also believe that some of the companies to jump on board early will benefit greatly from adopting crypto. I think this was a great move for PayPal, and I am super excited to see what they do next.
In the future will face great problems because the encrypted digital currency is the future and will become the whole world deals with it means PayPal will become in the abyss will be a lot
I love the idea. You mentioned tha it could just be manhunt for patents that have anything to do with crypto. This kind of reminds me dot com bubble. Yes, there was a crash, but look at these companies today. We just might have to wait how this all plays out and slowly accumulate crypto we like and we believe in. There are many companies filing for patents having anything to do with crypto for example eBay, the parent company of PayPal, filed patent application for “Gift Token”. Bank of America has filed for the most Bitcoin patents, for a total of 45 patents since 2008. Another once’s such as Coinplug (39), Alibaba (36), IBM (34) and Mastercard (21). Interestingly, many Chinese companies filing for crypto patents can be found in the top 10 list, and it turns out that even more Chinese companies are present in the top 50 and top 100 lists. Just like I said, get ready for dot com bubble.
One of the things I kind of worry about is that all the crypto that is currently existant will be dublicated by online giants and they will centralize it. Everything is open-source in the cryptospace. So corporations can make their own blockchains. A lot of the little projects will be dead in a few years.
Well, I always believe that one day cryptocurrencies will take the lead. Most people are optimistic about that revolutionary idea, others are scared of loosing their treasured business with the advancement of cryptocurrencies. This will be the case for Banks which will eventually shut their doors.
Moreover, if PayPal will speed up the process, then cryptocurrencies will have to be a priority means of market and daily transactions. The only problem resides in the pessimistic countries which tend to ignore cryptos.
My only problem is really to understand be if cryptocurrencies will stabilise the market. Bitcoin prices keeps shifting high and down. How could the merchants, sellers, suppliers and even customers respond to that? I think there is still a need to perfectly understand cryptocurrencies before taking the business into it.
"PayPal may liberate the market though there a number of pros and cons regarded to a particular market aspect of interest. After all, if only big online market platforms such as Amazon, Alibaba and other more accept cryptos, then the whole world will have to join ".
@jona12
Great news. One more step on the path towards mass adoption of cryptos.
Though it's still unknown on how they are going to fill these wallets. It seems to me they'll have wallets that contain an arbitrary ($1, $5, $10, etc) amount and they'll add them together and ship a subset of the keys to fill the exact amount from primary (buyer) to the secondary user (seller).
I suspect when you add funds in crypto to PayPal it'll be responsible for creating these "secondary wallets" for you, abstracted from the user (in the form of a simple balance). Same for the secondary user, when they receive a balance it'll most likely be shown as a simple balance.
PayPal is losing their long term assocation as the primary payment system with eBay. eBay is moving to another company. Adyen, a Dutch company, is picking it up. This puts paypal on notice that the status quo is dead. They are gonna have to adapt or die. PPCoin gonna save them? Doubt it. I run a small biz and got my start on ebay. It was great 10+ yrs ago. Today ebay is sellers hell. I hate eBay now. We started our own website and work the product related forums hard. As the website gains traction I will gladly say goodbye to ebay. For now they are still a necessary evil but less so every year. Paypal is how we tend to get paid. They skim their 3%. I would be happy to see a viable stable crypto come out to replace it. If it saves me money and is not just another fee based system.
We are falling behind the curve, these patents are preparation of what is to come later this year and into next year....We start seeing the introduction of State Run Cryptocurrency Exchange, I know its sounds weird but its coming... The patents are just coloring to the bigger picture... Paypal and other companies especially the banks are ensuring that their business model survives
The only thing I can guess is that they are trying to get rid of the whole memorize this large number to access your account thing. It might be a way to make crypto more accessible to those who think the whole thing might be too complicated. Hide the keys from sight and just have users worry about their own paypal account username and password. If that is the case, it's commendable that they are trying to think out of the box to reach the untapped crypto-virgin market. It'll either be amazingly good or terribly bad.