Coinbase Patent Proposes an Upgraded Security for Bitcoin Payments

The U.S crypto exchange and wallet provider, Coinbase,  proposes a new method of protecting and securing BTC purchases outlined by a new patent.

According to the filing, published Aug 14, by the U.S patent and trademark office (USPTO). It focused on how cryptocurrency exchange could develop a standardized payment portal enabling users to make bitcoin payments directly from their digital wallet. The filing outrightly claims that current existing systems operated by Coinbase do not adequately address deeming concerns as the private keys of BTC users may be stolen from their wallets either when making payments or when reviewing a new merchant page.

Key Ceremony is the solution

Coinbase, therefore,  concretely proposes the introduction of a so-called “key ceremony” considered to be a solution, involving the encrypting of private users passphrases into master key shares. These distinct shares are then combined into an operational master key that could be used to generate an encrypted private key upon checkout and then a decrypted private key when signing transactions in a payment process.

An employed tactic called “freeze logic,” according to the filing is another uptight security measure that sharply halts transaction if an administrator chooses to suspend the system.

The patent furthermore explains, “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 Application programming interface (API) is also another security seeking tactic the patent credibly notes. This key generation provides an extra layer kind of security when the system is used across the web.

The patent also outlines that the API could be stored in two parts which are the Coinbase web service and the other being specific to the host server. It is noted that transactions would only be confirmed if the API key received from the server matches the API key stored by the service.

Just as Coinbase undoubtedly has looked toward fostering security services within crypto transactions, MasterCard has also recently been pursuing a patent that could use blockchain to protect consumer payment credentials at the point of sale.