Paypal, one of the most popular payment platforms in the world, introduced an application in the United States Patent and Trademark Office to register a tool that would expedite the confirmation of transactions with cryptocurrencies.
The document, called “Expedited virtual currencies trasactions system“, was presented in the name of PayPal and indicates as creators to Cheng Tian and Sandy Lynn Godsey. The protocol proposes the creation of secondary wallet, with its own private key, which will be associated with the main wallet.
After this, each secondary wallet will be configured with a fixed amount of coins and, when sending the payment to the seller, one of these secondary wallets will be selected. At the time of the transaction, an exchange value will be determined between the cryptocurrency housed in the secondary portfolio and a fiat currency, to determine the amount that will be transferred.
The document mentions the growth of cryptocurrencies due to its decentralized nature and the advantages it offers when making international transactions. They say that “virtual currencies like Bitcoin have revolutionized money transfers and payment technologies by allowing transfers of economic value from person to person”.
The text also points out the problems that this type of payment presents, focusing mainly on the delay of the confirmations and focusing on the optimal confirmation time of Bitcoin transactions, which is approximately 10 minutes.
However, in the bitcoin community different scalability proposals have emerged to solve this problem, as well as to solve the different congestions that have occurred in the main cryptocurrency network due to momentary increases in the flow of transactions. In addition to SegWit, which reduces the cost and speeds up the confirmation time, and whose adoption has increased in recent weeks, the Lightning Network protocol was recently launched, which creates instant payment channels and is ideal for microtransactions.
On the other hand, it is not clear if the protocol presented by PayPal will go hand in hand with the adoption of cryptocurrencies on its platform. Although Peter Thiel, one of its founders, has invested large amounts of money in bitcoin, the payment system is not as optimistic about cryptocurrencies.
Thanks to the policies of the company, it would be possible to carry out frauds, since the buyer can indicate that he did not receive the product and the money would be returned. In addition, at the end of November 2017, a PayPal user reported that the company had blocked her account without the right to reply for selling cryptocurrencies. For this reason, it is not entirely clear what PayPal’s position will be regarding the cryptocurrencies of getting the patent approved.