New Patent for Securing Cryptocurrency Wallets Filed
The threats of cyberattacks are increasing, spurring the recent invention and patenting of technologies like freeze logic.
- By Jordan Lutke
- Aug 22, 2018
Coinbase has filed a patent for new security for cryptocurrency wallets used for direct payments to merchants including new “freeze logic”, which allows administrators to freeze suspicious transactions during checkout.
The patent, filed last week, describes a “key ceremony” which will create a bundle of encrypted security keys together with an operational master key. This master key will be used for private key encryption during checkout, while an operational private key will be used for decryption while a transaction is in process.
Coinbase explains the process of a transaction to a Bitcoin address to illustrate their patents:
The Bitcoin address is derived from the public portion of one or more cryptographic key pairs. The private portion of a key pair is not disclosed to the public. To send Bitcoin sent to an address, a user broadcasts a payment message that is digitally signed with the associated private key.”
Freeze logic is interested in this digital signing process. If a transaction request is made that is not signed by an associated private key, even once a master key is loaded, the system can detect this and freeze the transaction before private keys are potentially put at risk.
The threats of cyberattacks, malware, and hacking targeting cryptocurrency wallets are increasing, and very profitable if successful, spurring the recent invention and patenting of technologies like freeze logic.
The patent further details a system for API generation, which will allow the payment system to be used by other websites and services. This system will also function to “unfreeze the system after it has been frozen by an administrator,” per the patent.
Jordan Lutke is an intern with 1105 Media.