The San Francisco-based digital currency exchange, Coinbase, has successfully won a patent to ensure their bitcoin purchases are more safe and secure for customers.
According to the filing published on August 14th, the US Patent and Trademark Office has granted protection for a secure Bitcoin payment system to Coinbase. Here is the excerpt taken from the patent filing: “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.”
The aforementioned Bitcoin payment system would initiate a key ceremony application that would create bundles for custodians which are individually encrypted with passphrases. Each bundle that has been created will obtain a master key share and later combined into an operational master key. The operational master key will be then utilised for private key encryption during the checkout process.
The filing also include a term called “freeze logic”, which refers to a type of security measure whenever an administrator chooses to freeze the system in an event of automatically holding the transactions.
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.
Another feature that includes in the patent is an API key, which will allow different websites to set up their own version of the portal. The aforementioned key will be categorised into two sections – one will be strictly for the host server, while the other will be stored in the Coinbase system. Both of these keys are required to match whenever a transaction is taking place, which in turn, giving their customers a peace of mind with an added layer of security.