San Francisco-based Coinbase has won a patent for a secure bitcoin payment system that would better facilitate the transfer of funds directly from customer wallets to merchants during purchases.
According to the patent, the new technology is designed to improve upon existing systems, which currently do not provide solutions for maintaining security over highly sensitive private keys. To address this, the technology leverages ‘key ceremony’ applications to encrypt private keys at checkout by generating a for-distribution master key that is deleted immediately after use.
A key ceremony application creates bundles for custodians encrypted with their passphrases. Each bundle includes master key share. The master key shares are combined to store an operational master key. The operational master key is used for private key encryption during a checkout process.
The patent also describes two additional features, including the ability for users to freeze transactions on demand and a system of APIs that would bring the technology to online merchants. The described innovations will likely soon find their way to Coinbase Commerce.
This news comes days after Coinbase rebranded Toshi, the Ethereum mobile wallet, as Coinbase Wallet. The Coinbase-developed app has been revitalized with a new name as the service merges into a larger effort to invest in products set to define the future of the decentralized web.
More: Official Patent Filing
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.