Coinbase Wins Patent For Secure Bitcoin Payments System

By Agi Fatou Ndow August 20, 2018 Digital Currency No Comments

A recently published Coinbase patent looks to ensure a method for making bitcoin buys more protected for clients.
In a filing that was published on August 14, the U.S.- based cryptocurrency exchange laid out how it could build up a payment portal which would enable clients to pay to utilize bitcoin specifically from their digital wallet.

“It may be a security concern for users that the private keys of their bitcoin addresses may be stolen from their wallets,” the patent expressed. “Existing systems do not provide a solution for maintaining security over private keys while still allowing the users to check out on a merchant page and making payments using their wallets.”

The system as depicted sets up a “key ceremony” that makes key offers that are consolidated into an operational master key – encoded with the clients’ passphrases – that can be made freely accessible and erased after used.
The operational master key is utilized for private key encryption during checkout, and in addition for transaction signing when a payment is made.

What the filing refers to as “freeze logic” is additionally utilized in the process, a safety measure that consequently stops transactions if an operator suspends the system.

The patent clarifies:

“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.”

The patent proceeds to note that the system incorporates an API key, which means diverse sites would have the capacity to launch their own variant of the portal.

The API key would have two sections: one would be particular to the host server, while the other would be stored on the system created by Coinbase. The two keys would need to coordinate for a transaction to go through, including another layer of security for clients.