U.S. cryptocurrency exchange Coinbase (NASDAQ: COIN) has secured a patent for protecting a method of making Bitcoin purchases much more secure for its customers.
In the patent filing published last Aug. 14, Coinbase explained its plans for a payment portal that would allow its users to pay using cryptocurrencies like Bitcoin that comes directly from their digital wallet. It’s worth noting that the crypto exchange loosely used the term “Bitcoin” in referring to “a peer-to-peer payment system having a plurality of nodes that are connected to one another,” in which “users send payments by broadcasting digitally signed messages to the Bitcoin network.”
“It may be a security concern for users that the private keys of their bitcoin addresses may be stolen from their wallets,” the patent stated. “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.”
The system involves a “key ceremony,” where key shares are created and eventually combined into operational master keys. These are then encrypted with the user’s passphrases which can be made available publicly and eventually deleted after their use. The operational master key is then used for private key encryption during the checkout process as well as for the signing of transactions when payments are made.
The filing also mentioned utilizing a security measure called “freeze logic,” which automatically stops transactions in events when an administrator opts to suspend the system.
According to the patent, “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.”
Coinbase system will also have an API key, giving different websites the capability to launch their own version of the portal. The API key, according to the patent, is composed of two parts: one specific to the host server, while the other will be stored on Coinbase’s own system.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
