) wants to speed up your bitcoin transaction processing times and has filed a patent for a faster cryptocurrency payment system, according to an application with the U.S. Patent and Trademark Office.
In the dawn of the internet age, it wasn’t yet obvious what potential the new “world wide web” held. The ability to connect and chat with others, explore their content, and access news from far corners of the globe was novel enough to distract most, but those with vision understood that the internet could be so much more. One group of people banded together in 1998 under the name Confinity, and later as PayPal (after being joined by Elon Musk), and the rest is history. Since its IPO in 2002, PayPal has helped the internet become a tool for commerce as well as content, and it still dominates the online payment scene to this very day.
Despite PayPal’s rampant and continual success, with yearly revenues on a steady upwards trajectory from just over $3 billion in 2010 to $13 billion in 2017, the company’s foresight has warned them of troubles on the horizon. In the last few years, cryptocurrency payment solutions built with blockchain have slowly proliferated. Universally, these decentralized platforms demonstrate that PayPal, if it keeps its current business model will likely face stiff competition and begin to lose its foothold.
This is a function of PayPal’s convoluted fee structure, in which customers and merchants alike must tolerate 5% charges per transaction for the privilege of using the platform, among other arbitrary rules designed to keep the company solvent.
‘Expedited Virtual Currency Transaction System’
To preempt the inevitable rise of cryptocurrency payment solutions rivaling its own, PayPal filed a mysterious patent application for an “expedited virtual currency transaction system” on March 1, 2018.
Decentralized cryptocurrencies accomplish the ultimate ambition of PayPal: to transact quickly and inexpensively across borders. While PayPal must rely on partnering financial institutions and payment processors to provide their service, which add costs and precious time to transactions (and still bar their entrance into some markets), distributed networks like that of bitcoin are starting to look like a better alternative, even despite their flaws.
What is PayPal’s Game?
Not one to sit by idly while new solutions degrade its own value proposition, PayPal’s new patent gives cryptocurrency enthusiasts a clue about its intentions. An “expedited virtual currency transaction system” hints at a cryptocurrency-based payment system that doesn’t suffer from the same transactional hiccups as bitcoin, for example.
Bitcoin’s decentralized infrastructure sacrifices speed and cost, relative to its potential, for increased democracy and rejection of the traditional centralized business model. However, PayPal has little incentive to abide by the cryptocurrency industry’s central tenet of decentralization. Quotes gathered within the last few weeks also indicate that PayPal executives are wary of the advance of cryptocurrencies.
PayPal CEO Dan Schulman recently spoke about the opportunities and obstacles facing cryptocurrency solutions in the current climate. Schulman touched on the level of volatility and inconsistent regulations in the young space, saying, “Regulations need to be sorted out along with a whole number of other things. It’s an experiment right now that is very unclear as…