Cross-border payment service provider PayPal Holdings (NASDAQ: PYPL) has filed a patent with the US Patent and Trademark Office for a new payment processing mechanism that could resolve the issues related to transaction confirmation times of Bitcoin and other cryptocurrencies. The title of the filing was “Expedited Virtual Currency Transaction System.”
While appreciating the blockchain technology that allows peer-to-peer transfer of value, PayPal has stated that there is a need to ensure quick confirmation of transactions. A Bitcoin transaction may take up to 10 minutes for confirmation and PayPal intends to make it instantaneous using the system explained below.
The patent filed with the regulators on March 1, 2018 explain the method which can be applied to make cryptocurrency transactions instantaneous.
The 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 rexspective 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.
PayPal’s patent filing does not reveal when or how the new system is going to be implemented in the market. The patent does not refer to any particular cryptocurrency. Even though the market has taken a note of it, a majority of cryptocurrency investors could be more interested in Lightning Network, a technology that resolves scalability issues of Bitcoin and already being tested on the mainnet of Bitcoin’s blockchain network.