PayPal is seeking a new solution to speed up the transaction time of cryptocurrency payments. According to Inverse, the online payment processing company filed a patent with the United States Patent and Trademark Office (USPTO) on March 1, 2018 for a new app that streamlines cryptocurrency payments.
One of the biggest hurdles of growing cryptocurrency from a novelty concept into a functional currency is reducing transaction times. Because they aren’t backed by any government or financial institution, cryptocurrency transactions must be verified, which takes time. As reported by CoinCentral, this process can take anywhere from 30 minutes to 16 hours for Bitcoin transactions. Unfortunately, this limits the utility of cryptocurrency, prompting buyers and sellers alike to use traditional payment methods like credit card, debit card or cash.
PayPal’s patented app eliminates the need for verifying cryptocurrency payments on the blockchain. Normally, cryptocurrency transactions are verified and recorded in a publicly available ledger, known as a blockchain. With PayPal’s solution, however, transactions would be verified using the company’s own technology, thus reducing the amount of time it takes to buy and sell goods using cryptocurrency.
The online payment processing company isn’t a newcomer to the cryptocurrency market. In 2014, PayPal signed a deal with three Bitcoin processing companies — BitPay, GoCoin and Coinbase — that allows merchants selling intangible products to accept Bitcoin payments from customers. In 2015, PayPal filed a patent with the USPTO for a cryptocurrency mobile app.
Founded 1998, PayPal has become one of the world’s largest online payment processors. More than 218 million people have a registered PayPal account, and the company operates in 202 markets. Using PayPal, consumers and businesses alike can easily send or receive money.
While long transaction times currently plague the cryptocurrency market, there are still benefits to using cryptocurrency over traditional payment methods. Credit cards, for example, have high transaction fees ranging from 2 percent to 3 percent. Cryptocurrency transaction fees are usually much less, often costing under $1 for Bitcoin transactions.
Cryptocurrencies also tend to increase in value whereas government-backed currencies have the opposite effect due to inflation. In March 2017, a single Bitcoin was worth approximately $1,200. Fast forward to March 2018, and Bitcoin’s value skyrocketed to $10,950. Until the issue of long transaction times is revolved, however, cryptocurrency won’t experience mainstream popularity. But with PayPal’s newly patented app, many cryptocurrency holders are optimistic about the future of virtual currency.
Dil Bole Oberoi
