PayPal’s New Patent Could Give Cryptos a Boost
If it seems like I’ve been watching PayPal a little more closely these days since the word hit that eBay was cutting ties, it’s likely because I am. These guys have been a big part of the mobile landscape for years, and may be losing a major revenue source. What’s replacing it is a major question, and new evidence recently emerged to suggest cryptocurrency may have a part in things with a new patent.
Word emerged recently about PayPal’s new patent, dubbed the “Expedited Virtual Currency Transaction System.” The patent in question details a system by which buyers and sellers exchange private keys, which reduces the time it takes to transfer cryptocurrency from buyer to seller. PayPal’s plan here is to remove the lag that steps in by waiting for a transaction to be added to a block, in effect creating a secondary wallet that would store both buyer and seller keys.
PayPal noted not so long ago, via its chief financial officer John Rainey, that the volatility inherent in cryptocurrency makes it effectively impossible to be useful for purchasing goods and services. That’s only true if the merchant isn’t prepared to accept the volatility involved, but it’s true; the price of bitcoin alone can jump hundreds of dollars in a single day, and that’s no way to do business unless you’re hoping for a long-term stake.
What’s especially great about this development is that, even as governments around the world are cracking down and some corporations are doing likewise, there are some firms that are putting time, effort and resources into making cryptocurrency a viable option. To see PayPal come out so clearly in favor is encouraging news, and also suggests that the company may see it as a path to revenue in the wake of the eBay losses. With PayPal seeming reasonably sure that we’ll do business in cryptocurrency to come—and some firms already working therein—it’s not out of line to say they might be right.
It’s also the kind of thing that could help take this comparatively new development mainstream, and with over 1,300 such currencies at last report, we may well start to see a shakedown, a flight to quality, and a whole lot of offerings exiting the market in the near future.