PayPal applies for patent for crypto currencies

PayPal has filed a patent for fast transactions of crypto currencies. Their idea includes the use of „second keys“, which are linked to a user’s wallet. Instead of transferring a payment as usual, only parts of the private keys are exchanged or passed on. The private keys contain a certain amount of money.

The patent application states that the systems and methods that PayPal wants to implement ensure that the time that the payee normally has to wait for his payment is practically non-existent.

In a digital currency transaction, this is done by giving the payee the private keys to the addresses that have a certain value of a digital currency.

How will this Ethereum code work in practice?

For example, someone who has Ethereum code has a bit coin stored on several addresses, i.e. on the first address he has 0.1 bit coin, on the second 0.05 BTC, on the fifth 0.005 bit coin and so on like this:

If someone now wants to buy an item that costs 0.055 BTC, they would send the seller the private keys of the second and fifth Bitcoin addresses that contain exactly that amount.

The seller does not have to wait for the confirmations and thus has no waiting times and security at the same time, as he receives immediate payment.

Personal transactions for the Bitcoin revolution

From six confirmations, a Bitcoin transaction is considered secure and irreversible like shown here: Once the six blocks have been mined and the block chain added, the seller can trust the transaction. With a block time of ten minutes at Bitcoin revolution, this means one hour – a long wait.

This is no problem if you know and trust the other person, or if you order something online. However, it becomes problematic if the Bitcoin price falls significantly during the waiting period. It is possible that the seller is no longer interested in the transaction or is asking for more Bitcoins to get the desired price (in Euro).

Even if someone wants to buy a cup of coffee with Bitcoin, they must wait for this time if the seller insists on it. An hour for a takeaway coffee is a bit of an exaggeration.

In such transactions, the idea of PayPal would be helpful, an instant secure confirmation for the seller and the buyer does not have to wait.