Coinbase filed a patent describing a payment portal that would allow secure Bitcoin payments directly from users’ digital wallets. The patent was published on August 14 and its aim is to secure Bitcoin purchases for customers.
According to the patent, there’s always a chance private keys of users’ Bitcoin addresses can be stolen from their wallets and current systems are unable to secure private keys for payments made using wallets on merchant pages.
Coinbase’s system creates a “key ceremony” that generates key shares combined into an operational master key. The master key is encrypted with the user’s passphrase which can be made public and deleted after use.
The operational master key can be used to encrypt the private key during checkout and to sign the transactions for payments. “Freeze logic” is a security measure that automatically stops transactions if an administrator chooses so. This system is also used in the process.
The system can be unfrozen and the checkout process can be performed during both frozen and unfrozen states. However, the payment process can only be completed while the system is unfrozen. Furthermore, the patent details the system also includes an API key so websites will be able to create and launch their own version of the portal.
There would be two parts making the API key: one would be stored on Coinbase’s system and another would be specific to the host server. For a transaction to be successful the two keys need to match.