PayPal is gearing up to improve upon current cryptocurrency transaction speeds with their latest patent application for an “Expedited Virtual Currency Transaction System.” In the application, which was published on March 1st by the U.S. Patent and Trademark Office (USPTO), PayPal details a method of swapping private keys between the buyer and seller during a transaction to eliminate the need of the transaction to be included in the next block on a network to process payment. This is done through the creation of secondary wallets with unique private keys that enable the transfers of exact amounts.
Here’s how it works at a high level, as described in the patent application:
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.
With news that Coinbase is ramping up their payment platform, PayPal is clearly focused on keeping their competitive advantage in the payment market with this latest news. We will look for an official announcement from the PayPal team regarding their larger cryptocurrency plans