Coinbase has filed a new patent which describes technology intended to improve the security of cryptocurrency wallets and also permit the secure, direct payment of cryptocurrencies to merchants.

The cryptocurrency exchange's patent filing has been submitted to the United States Patent and Trademark Office (USPTO).

Coinbase's patent application, number 10,050,779, says that "it may be a security concern for users that the private keys of their Bitcoin addresses may be stolen from their wallets, [and] existing systems do not provide a solution for maintaining security over private keys while still allowing the users to check out on a merchant page and making payments using their wallets."
The patent describes a "key ceremony application" which creates encrypted key bundles together with an operational master key.
The operational master key is used for private key encryption during the checkout process, while an operational private key is used for private key decryption for transaction signing when a payment is in process.
The patent reads:
"Transactions do not explicitly identify the payor and payee by name or wallet. Instead, a Bitcoin transaction transfers ownership to a new address, referred to as a "Bitcoin address".

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."
The key bundles also include TLS-based keys for authenticated requests during transactions which require the creation of API keys which permit a web application to "communicate with a service and to unfreeze the system after it has been frozen by an administrator."
An interesting facet of the patent is the introduction of freeze logic. Freeze logic aims to prevent the potential exposure of private keys during checkout by a means of allowing suspicious transactions to be frozen by administrators.