PayPal wants to boost the speed of crypto, and it could be great news for adoption. A patent filing published last week details a new system that would transfer private keys outside of the blockchain to speed up transactions. Such off-chain solutions have been hailed by the likes of Microsoft as a solution to speeding up cryptocurrency.
“Virtual currencies like Bitcoin have revolutionized money transfer and payment technology by allowing for inexpensive peer-to-peer transfer of value between users,” the company says in its patent filing. However, the decentralized nature of such virtual currencies is accompanied by a need to confirm transactions, and those confirmation processes introduce a time delay or latency period between the initialization of the transaction and the point at which the transaction has been confirmed.”
The patent is aimed at speeding up transaction times, an issue that has plagued Bitcoin. The world’s largest cryptocurrency processed an estimated seven transactions per second globally, far fewer than the 50,000 on major credit card networks.
PayPal’s system to involve transferring private keys outside of the blockchain could boost times, using a secondary wallet with keys tied to predefined amounts of virtual currency. The patent description explains:
The systems and methods of the present disclosure practically eliminate the amount of time the payee must wait to be sure they will receive a virtual currency payment in a virtual currency transaction by transferring to the payee private keys that are included in virtual currency wallets that are associated with predefined amounts of virtual currency that equal a payment amount identified in the virtual currency transaction.
It’s not the only solution along these lines on the cards. The “Lightning Network,” an under-development method that makes Bitcoin transfers through channels, is touted by its developers as one day offering “billions” of transactions per second. If they come to life, Bitcoin could enter mainstream usage and shoot past its mid-December price high of nearly $20,000 to set new records.