Coinbase CEO Receives Patent for Transacting Bitcoin via Email
Brian Amstrong, the CEO of Coinbase, has patented a system that allows users to transact Bitcoin directly using email.
Brian Amstrong, the CEO of Coinbase, has patented a system that allows users to transact Bitcoin (BTC) directly using email.
First filed in March 2015 and awarded by the United States Patent and Trademark Office (USPTO) on Dec. 17, the method enables users to make Bitcoin payments using email addresses tied to wallet addresses, without incurring transaction fees.
As the abstract for the invention indicates, email addresses serve as identifiers for users’ wallet addresses within the system. The method couples a Bitcoin wallet creation and management module with a corresponding email module on a given host computer system:
Diagram of the invention. Source: USPTO
As the patent outlines, the invention includes the creation of a vault — which can be an individual or group’s — in which unclaimed Bitcoin are stored, ostensibly to heighten security:
“Hot wallet functionality is provided that transfers values of some Bitcoin addresses to a vault for purposes of security. A private key of a Bitcoin address of the vault is split and distributed to keep the vault secure [...] A vault has multiple email addresses to authorize a transfer of bitcoin out of the vault.”
After a request is made to transfer Bitcoin out of the vault, confirmatory links are sent via email to the user(s) and typically takes 48 hours to clear.
In most cases, transfer requests between email addresses and their associated wallets within the system do not imply the charging of a miner’s fee, as the mechanism is nested within a single host computer system.
In addition to these features, the proposed network would include a node that hosts a Bitcoin exchange where users can trade their Bitcoin for fiat currency.
It also provides for an instant exchange mechanism that allows for merchants and customers to “lock in” a local currency price for their cryptocurrency in order to mitigate exchange rate losses.
Crypto Twitterers unconvinced
While the appeal of a streamlined, email-based Bitcoin payments system is clear, news of the patent has so far been met with ambivalence on crypto Twitter. One user, “@Maiirye,” responded that:
“I know we are already doing kyc/aml with the exchanges but linking your wallet to an email address moves us one step closer to “non anonymous” transactions. The patenting and the ‘vault’ for holding unclaimed coins centralizes bitcoin transmissions... It’s a no for me“
The email system nonetheless appears to align with Armstrong’s stated ambitions for Coinbase’s roadmap; in an interview this summer, he said he was looking beyond trading services and towards driving the universal adoption of cryptocurrencies in the global economy.