Crypto Exchange Coinbase, recently filed a patent in regards to a new technology aimed at increasing the security of cryptocurrency wallets. The patent was filed on August 14, 2018, and has been submitted to the United States Patent and Trademark Office (USPTO). The purpose of the patent is to guarantee that customers can make direct payments from their Bitcoin wallet without exposing themselves to risk.
Coinbase’s patent states that private keys may be a security concern for clients since their private keys of their Bitcoin addresses may be at risk of theft from their wallets. The exchange claims that the current systems do not offer a solution for securing private keys while still allowing the users to make a purchase on a merchant page or to make payments using their wallet.
Coinbase wants to offer a new solution to the problem. The exchange is looking to allow users to pay directly through a “key ceremony.” The process is straightforward in order to create a secure transactions. The key ceremony encrypts the private user’s keys into a master key during the checkout process. In order to proceed with the transaction signing the master key is required to decrypt the private key, after the master key is used it is permanently deleted. Having a master key would, therefore, reduce the risk of private keys being stolen during the process.
ZDNet noted that an exciting part of the patent is its concept of freeze logic. “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.”
Coinbase’s patent also contained an API generation service that will allow the payment system to be used by third party services and websites. The API generation will be split into two parts. The first one will be stored on the Coinbase web service and the other part on the host server. The API generation service is to provide secure Bitcoin payments throughout the web and ensure that it has the potential to be a mainstream currency used in the e-commerce sector.