Coinbase Files Patent To Make Direct Bitcoin Payments More Secure For Customers

  • Coinbase's recent patent application aims to protect a secure method of making Bitcoin (BTC) payments, which would allow users to pay directly from their crypto wallets.
  • The patent filing also stated that it will include an API key to allow other websites to develop a similar payment network, with added security from Coinbase's system.  

San Francisco-based cryptocurrency exchange Coinbase recently filed a patent application that aims to protect a secure method of buying goods and services with Bitcoin (BTC).

Coinbase noted in its August 14 patent filing it found a way to create a payment channel that would let users make BTC payments directly from their crypto wallets, instead of having to use a third-party bitcoin payment processing service like BitPay.

Secure BTC Payments Via "Key Ceremony"

Coinbase’s crypto patent document stated that "It may be a security concern for users that the private keys of their bitcoin addresses may be stolen from their wallets. 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."

In order to make BTC payments more secure, Coinbase’s filing mentioned that a “key ceremony” application will be used to create “key shares”, which will then be “combined to store an operational master key.” The master key will be “encrypted with [users’] passphrases” so it can be shared publicly, and deleted after the transaction has been confirmed, the filing noted.

The checkout and payment process, as described in the filing, stated that users’ private keys will also be encrypted by using the operational master key. When a payment is processed, the operational key will be used for transaction signing as well.

"Freeze Logic"

Additionally, an administrator may suspend suspicious transactions through an automated process called “freeze logic”, which is also part of the payment system mentioned in Coinbase’s filing. Freeze logic, as explained in the patent application, works by allowing the system to be frozen only after the master key has been created. Moreover, the system may be unfrozen by using keys from the key ceremony, the filing stated.

To make transactions safer:

“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’s payment software will also allow other websites to create similar crypto payment portals through an API key the exchange will provide. The API key will be designed to make payments safer by storing the key on the host’s server and on Coinbase’s system. Transactions can only be validated if both keys match.

Bitcoin Goes Above $10K 15 Minutes After President Trump's Speech on Law and Order

Siamak Masnavi

At 23:05 UTC (or 19:05 EDT) on Monday (June 1), 15 minutes after President Donald Trump finished explaining (during a speech from the White House's Rose Garden) how he was going to stop the rioting and looting going on across the U.S., the price of Bitcoin surged above $10,000 for the first time since May 7.

According to the White House, President Trump started delivering his prepared statement at 22:43 UTC (or 18:43 EDT).

Here are a few highlights from this speech, which took place on the sixth day of riots across the U.S. following the death of George Floyd whilst under custody of Minneapolis police:

"All Americans were rightly sickened and revolted by the brutal death of George Floyd... But we cannot allow the righteous cries and peaceful protesters to be drowned out by an angry mob. 

"The biggest victims of the rioting are peace-loving citizens in our poorest communities, and as their President, I will fight to keep them safe.  I will fight to protect you.  I am your President of law and order, and an ally of all peaceful protesters...

"But in recent days, our nation has been gripped by professional anarchists, violent mobs, arsonists, looters, criminals, rioters, Antifa, and others...

"That is why I am taking immediate presidential action to stop the violence and restore security and safety in America.  I am mobilizing all available federal resources — civilian and military — to stop the rioting and looting, to end the destruction and arson, and to protect the rights of law-abiding Americans, including your Second Amendment rights...

"Today, I have strongly recommended to every governor to deploy the National Guard in sufficient numbers that we dominate the streets... 

"If a city or a state refuses to take the actions that are necessary to defend the life and property of their residents, then I will deploy the United States military and quickly solve the problem for them."

President Trump finished his speech at 22:50 UTC (or 18:50 EDT), which is when Bitcoin's price surge started; according to data from CryptoCompare, Bitcoin was trading around $9,718 at 22:50.

The Bitcoin price then spiked above $10K approximately 15 minutes after the President's speech ended and by 23:35 UTC (or 19:35 EDT), or 45 minutes after the speech finished, Bitcoin's price had reached $10,332, as you can see from the 24-hour BTC-USD price below:

BTC-USD 24 Hour Chart  on 2 Jun 2020.png

Here is how crypto-focused behavior analytics startup Santiment commented on Bitcoin's price action:

Finally, Santiment says that either FOMO (Fear of Missing Out) "kicks in now, or profit takers end up taking the safe route with the expectation of buying below $10,000 again."