Leading crypto exchange Coinbase has won a patent that would make bitcoin payments secure and protect its customer’s wallets from attacks by hackers.
According to patent’s document, published on Tuesday, August 14 by the U.S. Patent and Trademark Office (USPTO), Coinbase said the new payment portal would allow users to pay using bitcoin directly from their digital wallet.
A paragraph from the document explains the major problem the patent seeks to address, “It may be a security concern for users that the private keys of their bitcoin addresses may be stolen from their wallets,” and then it goes further to state that; “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.”
Coindesk reports that the new patent design works by setting up a “key ceremony” that creates key shares that are combined into an operational master key – encrypted with the users’ passphrases – that can be made publicly available and deleted after use.
The operational master key is used as a private key encryption during checkout, as well as for transaction signing when a payment is made.
The design also features a “freeze logic” which serves as an additional security measure that automatically halts transactions if an administrator chooses to suspend the system.
According to Coinbase, “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.”
A flurry of rapid improvements to the speed and security of crypto transactions promise to bring the digital currencies closer to mass adoption. In July, financial services giant Mastercard won a patent for its design of a payment platform that would link accounts holding both fiat currency and cryptocurrencies.