Coinbase’s security features are about to receive an exciting update, as the popular US-based exchange has filed a new patent regarding the Bitcoin (BTC) payment system.
Coinbase Security Patent to Improve BTC Payment System
According to reports, Coinbase seems to be seeking a new patent that would provide an additional security layer to its ever so popular platform. The US-based exchange doesn’t seem to be happy with the security of its users’ private keys, which is why they wish to improve upon their crypto security structure.
According to the filed patent, this new security measure would allow users to make Bitcoin payments directly from their wallets, thus improving Coinbase’s security. The filing also states that there is a real concern of private keys being stolen from Coinbase’s servers. The systems that are currently in place may not be enough to stop the thieves from retrieving other individual’s private keys, which might endanger the funds of the users.
The newly proposed system would allow the wallet users to encrypt the passphrases, and add an additional protection layer by creating a master key. This master key would work by encrypting the private keys that the customer possesses, as well as all the transactions that they make. After the transaction is done, the master key will be deleted, and no third party will be able to steal it and retrieve the encrypted information. This would also mean that each new transaction will require a new master key to be made.
Freeze Logic and API Can Put a Stop to Crypto Theft
The system will also introduce a new element called ‘freeze logic’, which will let administrators to completely suspend the system if necessary. If a cyber attack or a theft is detected, all transactions will be prevented from being processed until the system is deemed safe again. According to the patent, the system can be frozen at pretty much any point after loading the so-called “master key”. After the cybersecurity threat is dealt with, the system can return to normal through the use of administrator-specific keys.
As for the checkout process, it can still be carried out in both cases, whether the system is frozen or not. However, the payments can only be made when the system is not frozen, which might prove to be the best of the Coinbase security features, especially when we consider the significant increase in hacking attacks.
Finally, the filing also proposes the introduction of API integration capabilities. These would allow websites to run different versions of this system. There would be a rather specific pair of keys for the API to use. The first one would be stored on the website of a Bitcoin transactor, while the second one would remain safe in Coinbase-owned servers. In order to the transaction to be approved, the two keys would have to be a perfect match for each other.
Blockchain Tech can Increase Security
Coinbase has had security on its mind for a long time, and the firm tried to file for this a security-focused patent before. In fact, they seem to be so worried about their users’ safety that they filed for similar patents up to nine times in 2015 alone. The critics of the firm saw this as an attempt to create a monopoly on BTC services, which the platform vehemently denied.
Brian Armstrong, the CEO of Coinbase, even wrote a blog post regarding the subject, explaining that the best way for the exchange to defend against the so-called ‘patent trolls’ would be to create an entire portfolio of patents. After this realization, the exchange tried to do just that, but it is also not the only one to do so.
Additionally, in 2016, Coinbase also tried to file another patent that would secure Bitcoin private keys. Blockchain-based patents became a big trend at the time, and even the Bank of America joined in by filing approximately 50 patents. This move has surpassed the efforts of pretty much any other venture out there.
Even IBM itself has several blockchain-related patents that it has filed, as well as the delivery firm, UPS. According to UPS, a patented system for transportation data would be of great use to the company. Delivering packages from one point to another can lead to many complications due to various segments and networks that the package has to go through before reaching the destination. Through blockchain tech, a package can be tracked with ease, and the safety of the delivery can be ensured.