PayPal has filed an application for a new technology designed to speed up its cryptocurrency payment system.
The ink is still drying on the cryptocurrency criticisms leveled by PayPal CEO John Rainey, but this has not stopped the online money transfer giant from filing an application with the US Patent and Trademark Office for a new technology aimed at enhancing its digital currency payment services.
PayPal touts its Expedited Virtual Currency Transaction System as a solution reducing the length of time it takes to transfer cryptocurrency payments. It apparently speeds up the process through the exchange of the private keys of sellers and buyers.
A portion of the application reads:
“Expedited virtual currency transactions are provided by identifying a first user primary wallet associated with a virtual currency and including a first user primary wallet private key.”
It goes on to add:
“First user secondary wallets are created that each include a respective first user secondary wallet private key, and a respective virtual currency transaction is performed using the first user primary wallet private key to transfer predefined amounts of the virtual currency from the first user primary wallet to each of the first user secondary wallets such that first user secondary wallets are provided with different predefined amounts of the virtual currency.”
According to PayPal, users’ private keys are linked to temporary wallets which contain the payment amount. By exchanging the keys, the system eliminates the need for digital currency payments to be processed directly on the blockchain before confirmation of the payment.
Rainey dismisses Bitcoin is reliable currency
PayPal’s new virtual currency transaction system clashes with the sentiment articulated by Rainey in an interview two weeks ago, when he expressed doubts over Bitcoin replacing fiat currency as a payment method.
Rainey was quoted as saying:
“Given the volatility of Bitcoin right now, it’s not a reliable currency for transactions because if you’re a merchant and you have a 10% profit margin, and you accept Bitcoin, and the very next day Bitcoin drops 15%, you are now underwater on that transaction.”
At the same time, Rainey claimed the Venmo payment platform was enjoying more acceptance from Millennial consumers because of its social media features and its ability to share purchases.
No demand for crypto payments
Also last month, Bill Clerico, CEO of JP Morgan’s payment arm WePay, said there were too few requests from clients to consider support for transactions using cryptocurrencies.
He added that cryptocurrencies are very interesting, but financial markets have yet to figure out a “killer use-case”.
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