US cryptocurrency exchange Coinbase publishes patent for secure Bitcoin transaction system. The system established a so-called “key ceremony” that forms key shares that are further combined into an operational master key.
17 August, AtoZ Markets – One of the biggest cryptocurrency exchanges in the world, Coinbase, has published yet another patent. The fresh document seeks to protect the way of making Bitcoin purchases more secure for clients.
Coinbase Publishes Patent for Secure Bitcoin Transaction System
In the official filing, the US-based cryptocurrency exchange has explained how it could develop a payment portal. The portal would enable users to pay using Bitcoin directly from their digital wallets. The patent reads:
“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 system that has been outlined by the Coinbase established a so called “key ceremony” that forms key shares that are further combined into an operational master key. It then is encrypted with the users’ passphrases. The master key can be made publicly and then deleted after use.
The operational master key, according to the filing, is utilized for private key encryption during checkout. It is also used for transaction signing when a payment is performed. The filing also refers to the “freeze logic”, which is a security measure that automatically suspends transaction in case an administrator chooses to suspend the system.
Coinbase API key System
Furthermore, the patent goes to explain:
“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.”
It also notes that the system includes an API key. This implies that different websites would be able to launch their own version of the portal.
The API key would feature two parts: one of them would be related to the host server, while the other would be stored on the system that is created by Coinbase. The keys would have to match for a transaction to be implemented, thus adding to the security for clients.
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