U.S.-based payments giant PayPal has filed a patent with the U.S. Patent and Trademark Office (USPTO), published on March 1, to increase the speed of cryptocurrency payments. The patent describes an “Expedited Virtual Currency Transaction System”, involving the use of secondary private keys to shorten wait times for transactions between consumers and merchants.
The last time it was reported that the company filed a patent application related to cryptocurrencies was back in mid-2016 when it showed plans for a modular payment module that accepted bitcoin, litecoin and dogecoin.
The patent’s inventors are listed as Cheng Tian and Sandy Lynn Godsey of San Jose, California, with PayPal Inc. listed as the applicant. According to the patent, PayPal is attempting to solve the problem of slow transaction times for cryptocurrency trades that have led potential crypto users to “instead choose to perform the transaction using traditional payment methods rather than virtual currency”
The system described by the patent application is meant to work by creating secondary wallets that each include a respective secondary wallet private key, and a transaction is performed using the primary wallet private key to transfer different predefined amounts to each of the secondary wallets. When an instruction is received to transfer a payment amount to a second user, they are allocated a subset of the first user’s secondary wallet private keys that together contain cryptocurrency that equals the needed amount.
Need for Speed
The Paypal application explains that the need for this proposed system for cryptocurrencies is due to the time delay or latency period between the initialization of the transaction and the point at which the transaction has been confirmed. It gives as an example waiting for ten minutes or more for a bitcoin conformation, which they indicate hurts the user experience, putting it at a disadvantage over seemingly instant choices such as fiat credit card payments.
“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.