Coinbase Applies for Direct Bitcoin Payments System Patent 🚨 This article is 6 years old...
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Coinbase Applies for Direct Bitcoin Payments System Patent
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Updated: Mar. 24, 2020 at 6:55 am UTC
Photo by 35mm on Unsplash
Digital asset exchange Coinbase continues to make strides in streamlining user access to cryptocurrency payments and trading, following an application for a direct bitcoin payments system patent, filed Aug. 14.
Making Bitcoin Payments More Convenient and Secure
San Francisco-based startup Coinbase is seeking to solve the security issues surrounding direct bitcoin wallet payments, according to a patent.
In the patent, filed Aug. 14, it states:
“Existing systems do not provide a solution for maintaining security over private keys while still allowing the users to checkout on a merchant page and making payments using their wallets.”
Coinbase plans to employ a “key ceremony” system to integrate key shares with operational master keys for encrypted, sovereign merchant transactions. The operational master key contains users’ passphrases and acts as a transaction signature for when payments are made.
To ensure security, Coinbase’s patent also outlines a security measure called “freeze logic,” which automatically halts a transaction if the administrator decides to back out of a purchase.
“At any point in time after the master key is loaded, the system can be frozen. The system can be unfrozen after it has been frozen using keys from the key ceremony. The checkout process can be carried out when the system is frozen and when the system is unfrozen. The payment process can only be carried out when the system is unfrozen.”
The patent also outlines enterprise applications via an API key that would give different websites the ability to launch a customized version of the portal.
Coinbase Expands Blockchain Ecosystem
Earlier this month, Coinbase acquired digital identity startup Distributed Systems.
Founded in 2015, Distributed Systems is a decentralized identity solutions company that has developed an identity standard for decentralized applications (dApps), called the Clear Protocol.
Under the terms of the agreement, Distributed System’s five-person team will merge with Coinbase and begin working on the company’s new Coinbase Wallet and “Login with Coinbase” product, which will allow dApp developers to easily integrate identity platforms for users to register and connect their crypto wallets.
CEO Nikhil Srinivasan and co-founder Alex Kern will head the new decentralized identity team at Coinbase.
Meanwhile, on Aug. 15, Coinbase rebranded its Toshi cryptocurrency wallet as Coinbase Wallet, adding several new features.
Among the added functionality, Coinbase Wallet will have the ability to send payments, access decentralized exchanges to purchase and sell tokens and store crypto collectibles.
To increase security, Coinbase wallet will also utilize Secure Enclave and biometric authentication systems.
