PayPal prosposed a patent to improve transaction times

MoonJeina

sr. member

Activity: 652

Merit: 250

Make winning bets on sports with Sportsbet.io!

Quote from: dado7 on March 06, 2018, 03:26:27 AM

I stumbled upon a very interesting news this morning:
https://www.ccn.com/paypal-files-patent-improve-cryptocurrency-transaction-times/

“In many transaction situations, a 10 minute wait time will be too long for payers and/or payees, and those payers and/or payees will instead choose to perform the transaction using traditional payment methods rather than virtual currency. Issues like this have slowed the adoption of virtual currencies despite their advantages.”

"Under PayPal’s proposal, the system would automatically create multiple secondary wallets for its users — wallets whose private keys could be aggregated and transferred to match any desired payment amount. This, the patent argues, would “practically eliminate” confirmation times."

I am not sure how exactly and if this would work. Opinions?

This is the thing about instant payment through digital currency . All the delays makes it less efficient and less trust worthy in the eyes of people .
The effort to make this problem less of a problem by PayPal is good but is still not very efficient . Since the private keys will be known by everyone . Every time there will be a payment made by the new user , there will be a need for generating a new private key for new user . This would still not be a very fast process . The lightening network has slowed down the delay in the confirmation to a large extent but there is still a lot of need to make it an "instant" payment.

dado7

full member

Activity: 322

Merit: 141

Quote from: BingoDog on March 06, 2018, 02:02:29 PM

I'm not trilled with such solution. This could maybe solve the issue of confirmation time but the method of cotrolling private keys like PayPal proposes I don't like. It seems too centralized, too controled and too unsecure for my taste.
I think PayPal is losing its role and the business is suffering and is trying to find some niche to survive.

While after reading all of your comments I do agree that the system they proposed is flawed, I don't necessarily think that Paypal is losing its role. I still haven't found a better and more easy + secure payment system for making online payments. Not only that I haven't found a better one, I haven't found the one that is even close. Neteller, for example, is one of the better ones yet nowhere near PayPal.

BingoDog

hero member

Activity: 658

Merit: 505

I'm not trilled with such solution. This could maybe solve the issue of confirmation time but the method of cotrolling private keys like PayPal proposes I don't like. It seems too centralized, too controled and too unsecure for my taste.
I think PayPal is losing its role and the business is suffering and is trying to find some niche to survive.

ufocoder

newbie

Activity: 4

Merit: 0

LMAO. I don't think you can swap private keys between two parties in a decentralized system!

dado7

full member

Activity: 322

Merit: 141

From what you all write, it seems they are trying to implement a similar system to that which should be implemented with Lightning network. However, PayPal solution seems much worse, and too me there are two main reasons:
1. Transactions are not evident in the Blockchain whatsoever (so what will actually happen with the spent Bitcoins, how to return them back in the proper manner)?
2. The sole idea of creating billions of wallets and handing private keys hence rendering them useless afterwards is giving me itches.

If they are looking for the temporary solution then maybe it has some sense.... PayPal might just be too hasty to fully have Bitcoin adopted, which when come to think about it is a good thing - not for them, but for the general atmosphere around Bitcoin.

cellard

legendary

Activity: 1372

Merit: 1252

Just more nonsense from the old empire trying to stay relevant. If PayPal really wanted to help Bitcoin, they could like... accept Bitcoin transaction? for starters.

And if they wanted to get on the scaling game, they could help by implementing lightning network solutions into their interface. But what these scammers want to do is none other than a proprietary closed source system in which they can selectively cancel any accounts they don't like (just like what they do with PayPal currently).

I predict that they want to do something like Bitpay but worse, and in the next hard fork drama they will support big blocks or whatever other controversy because most likely they will be following orders by US government or whoever is attacking with the hard fork.

Jet Cash

legendary

Activity: 2828

Merit: 2472

https://JetCash.com

Come on guys - this is PayPal. Just think of the potential that they will have to lose wallets, and thus to increase ther profits.

Of course you will be able to pay a $50 fee to recover a $10 wallet.

o_e_l_e_o

legendary

Activity: 2268

Merit: 18771

Quote from: monsterer2 on March 06, 2018, 06:16:56 AM

Quote from: o_e_l_e_o on March 06, 2018, 06:00:59 AM

Exchanges generally move everything in to main hot- and cold-wallets, and then pay out from these main wallets. Paypal are not proposing that, but instead to split everyone's money up in to countless small wallets, and then move these wallets around between customers. As you say, specifics are scant, but I fail to see the benefits of Paypal's proposed method.

It's actually a terrible idea. In order to hand out private keys, they are forced to transact on the blockchain unless they don't aggregate at all, which is the opposite of what they're saying. You can't put funds into a new private key with magic.

It's a little bit like your out-of-date dad trying to be "down with the kids".

monsterer2

full member

Activity: 351

Merit: 134

Quote from: o_e_l_e_o on March 06, 2018, 06:00:59 AM

Exchanges generally move everything in to main hot- and cold-wallets, and then pay out from these main wallets. Paypal are not proposing that, but instead to split everyone's money up in to countless small wallets, and then move these wallets around between customers. As you say, specifics are scant, but I fail to see the benefits of Paypal's proposed method.

It's actually a terrible idea. In order to hand out private keys, they are forced to transact on the blockchain unless they don't aggregate at all, which is the opposite of what they're saying. You can't put funds into a new private key with magic.

o_e_l_e_o

legendary

Activity: 2268

Merit: 18771

Quote from: monsterer2 on March 06, 2018, 05:28:12 AM

Quote from: o_e_l_e_o on March 06, 2018, 05:08:06 AM

Not quite. Paypal want to transfer wallets and private keys between users. Exchanges simply update the balances in their own database, and then pay out from a main hot-wallet as and when required.

The exchange method is superior, so I am failing to see where Paypal are heading with this patent.

Exchanges lump everyone's money in a shared pool of PKs, then withdrawals draw from this set. That's basically what they're saying in the patent, barring the use of actual private keys as the deliverable, but they're not specific enough to tell....

Exchanges generally move everything in to main hot- and cold-wallets, and then pay out from these main wallets. Paypal are not proposing that, but instead to split everyone's money up in to countless small wallets, and then move these wallets around between customers. As you say, specifics are scant, but I fail to see the benefits of Paypal's proposed method.

monsterer2

full member

Activity: 351

Merit: 134

Quote from: o_e_l_e_o on March 06, 2018, 05:08:06 AM

Not quite. Paypal want to transfer wallets and private keys between users. Exchanges simply update the balances in their own database, and then pay out from a main hot-wallet as and when required.

The exchange method is superior, so I am failing to see where Paypal are heading with this patent.

Exchanges lump everyone's money in a shared pool of PKs, then withdrawals draw from this set. That's basically what they're saying in the patent, barring the use of actual private keys as the deliverable, but they're not specific enough to tell....

o_e_l_e_o

legendary

Activity: 2268

Merit: 18771

Quote from: monsterer2 on March 06, 2018, 04:51:04 AM

This is basically the same way that all online wallets work, and all exchanges, so trying to patent that will be like trying to patent the wheel.

Not quite. Paypal want to transfer wallets and private keys between users. Exchanges simply update the balances in their own database, and then pay out from a main hot-wallet as and when required.

The exchange method is superior, so I am failing to see where Paypal are heading with this patent.

monsterer2

full member

Activity: 351

Merit: 134

This is basically the same way that all online wallets work, and all exchanges, so trying to patent that will be like trying to patent the wheel.

1Referee

legendary

Activity: 2170

Merit: 1427

It's a futile attempt in my opinion, especially because of the fact that LN already addresses the issues they seem to be pointing at, which are the slower confirmation times and transaction fees. PayPal is just trying to solve a problem in a way that is far less convenient than the already available options. People want to avoid centralized entities taking over, not get further stuck into this system. I don't even think that PayPal will eventually utilize this patent, because by that time they likely have already acknowledged LN's superiority.

krishnapramod

legendary

Activity: 1470

Merit: 1079

Quote

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. 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. Subsequently, an instruction is received to transfer a payment amount to a second user, and the second user is allocated a subset of the first user secondary wallet private keys included in respective first user secondary wallets that are associated with predefined amounts of the virtual currency that equal the payment amount.

A centralized private key exchange-based system, PayPal will be holding crypto in different secondary wallets with respective private keys and predefined amounts, and a buyer swaps these keys with a seller, off-chain transactions. It would work, but rather than Blockchain, would have to heavily rely on PayPal for security and obviously too centralized.

o_e_l_e_o

legendary

Activity: 2268

Merit: 18771

From what I've read of the patent, it sounds like Paypal are trying to set up and patent a centralized processor that will run like this:

1 - You deposit crypto to your Paypal account
2 - Paypal automatically splits your crypto up in to small amounts, and stores it over a large number of wallet
3 - When you want to pay someone, it will add up the necessary wallets to reach the total and then transfer control of those wallets to the payee

The obvious issues that this raises are:

1 - Individuals cannot have access to their own private keys, as if they did, there is nothing to stop them from reclaiming the wallets after they have been "spent"
2 - These transactions would be happening off-chain
3 - When you want to withdraw crypto from Paypal, you may be withdrawing small amounts from multiple wallets, and therefore getting hit with multiple transaction fees (although this is easily avoidable if they pay out from a main hot wallet, and keep the many small wallets to use with new users. This does raise the question, however, of why this whole system is even necessary? Why not just run the way exchanges do, with any transfers you make being off-chain until you withdraw?)

monsterer2

full member

Activity: 351

Merit: 134

The entire problem which bitcoin solves is how to trustlessly exchange value stored in private keys.

The only way you can do it by literally exchanging private keys is by requiring trust, so they're proposing a non crypto solution to the problem. Amazing. More amazing that the seem to think such an idea is worth patenting.

dado7

full member

Activity: 322

Merit: 141

I stumbled upon a very interesting news this morning:
https://www.ccn.com/paypal-files-patent-improve-cryptocurrency-transaction-times/

“In many transaction situations, a 10 minute wait time will be too long for payers and/or payees, and those payers and/or payees will instead choose to perform the transaction using traditional payment methods rather than virtual currency. Issues like this have slowed the adoption of virtual currencies despite their advantages.”

"Under PayPal’s proposal, the system would automatically create multiple secondary wallets for its users — wallets whose private keys could be aggregated and transferred to match any desired payment amount. This, the patent argues, would “practically eliminate” confirmation times."

I am not sure how exactly and if this would work. Opinions?

Topic: PayPal prosposed a patent to improve transaction times (Read 268 times)