Paypal Patent Application: Expedited Virtual Currency Transaction System
appft.uspto.gov
appft.uspto.gov
For example, Satoshi Nakamoto would need to use multiple accounts as inputs for any single transaction greater than 50 BTC. Those accounts were created prior to the development of the Hierarchical Deterministic Wallet spec (BIP32) [0]. From reading only the abstract cross-posted here, it sounds like the linked patent filling from 2016 is describing something very similar to the "Per-office balances: m/iH" use case described in BIP32 [1]; which is indeed prior art from 2012 [0].
With Bitcoin HD Wallets, there is no distinction between a private key and an account. With an HD Wallet, there is a private parent key and there are private child keys which are derived from the private parent key. Each private child key is a distinct "account". Multiple Bitcoin wallet softwares support the 2012 BIP32 HD Wallet spec.
[0] https://github.com/bitcoin/bips/blob/master/bip-0032.mediawi...
[1] https://github.com/bitcoin/bips/blob/master/bip-0032.mediawi...
If someone else could read it and file a prior art brief/notification - if appropriate - that'd be helpful.
Saying "oh but your honour, I know of it but I didn't actually read it" won't carry much water if it ever came to trial. If nothing else it would evidence an intent to ... willfully infringe.
Of course, I am not a lawyer, and clearly neither are you. Neither of us is giving legal advice.
> Though the Court’s unanimous opinion gives district courts wider latitude to apply enhanced damages under the abuse-of-discretion standard, a concurrence by Justice Breyer, joined by Justices Kennedy and Alito, suggests at least two judicial limitations to that discretion: (1) mere knowledge of the patent is insufficient to support enhanced damages; and (2) “enhanced damages may not serve to compensate patentees for infringement-related costs or litigation expenses.”
There should be no IP reason to stop using Bitcoin HD Wallets for handling multiple Bitcoin accounts due to the linked patent filing because Bitcoin HD Wallets existed four (4) years prior to what seems to be described in the patent abstract copied to this thread.
I'm not clear on why they move so slow.
To be fair, across that broad range, nobody else is doing better than them. It just seems like given their position, I'd see more innovation. For example, what’s their response to Stripe? They seem to be on their laurels.
> For example, what’s their response to Stripe?
Edit: Guess my feel that HN posts might be correlated to innovation is off? As far as I can tell, Stripe is kicking Braintree’s ass. PayPal has good market share as a whole, because it is a second form of payment. Ignore that and look at basic CC payments only, and Stripe is clearly beating Braintree in market share. Basically...what did PayPal net from this acquisition?
Edit: Get the charge volume point, but 15% of top sites versus less than 1% seems to indicate something. Also, websites added/dropped going negative for Braintree. That can’t be a good thing.
My understanding is Braintree is cheaper when you get big enough.
Edit: it doesn’t cost you anything to accept Stripe on your site. Would you figure Optimizely revenue from all of its free plan users they just purged? You would not.
Braintree has been an absolute pleasure to develop with. Their support has been excellent, we even had a conference call with their dev team in Australia regarding a new feature that they were rolling out so that we could be an early adopter.
HN gets all giddy and excited about Stripe for some reason, but Braintree is just as nice and easy to use. Stripe doesn't have anything inherently better than BT.
I, as a developer myself find it incredibly easy to put together something with Stripe in just a matter of few hours with Stripe vs PayPal. But, have you ever experienced a fraudulent case with Stripe? Stripe will almost always side with the customer even though you have evidence to prove you were the one scammed. I hope you never have to experience what it is like because you can't even get hold of someone over the phone when that happens.
But, as much as I hate PayPal like you, I can tell you, there were many many incidents where I got stuck with their sh*tty documentation and I was able to get hold of someone from their developer team. There were many instances where I was able to successfully win chargebacks against fraudsters by getting hold of someone on the phone and explaining the situation. Stripe simply isn't there yet, and this is one of the most important elements in this business, not just the fancy integration and documentation.
It's not Stripe's fault though, I opine that they simply don't have enough data as PayPal does to detect/prevent fraud as good as PayPal.
For example, Paypal's seller protection explicitly does not cover you as a seller if the buyer claims the item was not as described; that leads to the famous brick fraud which has been going on for well over a decade. Eg https://ask.metafilter.com/77638/Can-I-trust-PayPals-seller-... or https://news.ycombinator.com/item?id=13180885.
> Stripe will almost always side with the customer even though you have evidence to prove you were the one scammed. I hope you never have to experience what it is like because you can't even get hold of someone over the phone when that happens.
There are hundreds if not thousands of stories of people having this issue with Paypal, so... :)
My experience (I sell Bamboo chairs, ha!) is that if you can prove you have a detailed description of the item in place that specifies what is included, what isn't, what's the color, texture and everything else in sufficient detail, you can win the case. In my case I do all that plus I display my terms and conditions during checkout, so there were maybe 3 times this happened to me and I won all of these cases.
Easiest way to avoid this? Block payments/checkouts from demographics notorious of these practices - China, Pakistan, Africa, Egypt, etc. Your demographics may vary though, based on your product, your target audience, etc. Use your analytics systems to find out which ones give you a lot of high pageviews:bounce ratio and block them, especially if there are suspicious orders from them (10000 orders of a toothbrush without any prior emails, etc for example).
I use my own e-commerce platform (because Shopify sucks) to detect and trigger fraud systems. If something looks like even a 10% suspicious transaction to me, it will be flagged and pass through a manual order fulfilment. I know, I make it sound so easy, but this will probably take you atleast half a year to fine tune and you should be good.
> There are hundreds if not thousands of stories of people having this issue with Paypal, so... :)
Once again, I'm not siding with PayPal, but I think this could be because they've been much longer in the business than Stripe?
These types of blocks by country don't seem right. Why no just block by behavior?
Paypal already dominates the market. There's not much they need to do, and there's not much that needs to be done. It's an online payments system, not a game. It doesn't need to be innovative or different just for the sake of it.
I agree that paypal has a number of issues that need to be fixed (high fees for transactions and exchange, little/slow customer support, lack of transparency for many processess, questionable privacy agreements) but these problems have nothing to do with innovation. It would be nice for the near-monopoly to be broken, but it's adequate.
It sounds like a way of PayPal holding in escrow. This doesn't solve transaction speed except for example repeat transactions (known amount long beforehand). You need a new wallet per every transaction, also?
Which 1) only works if you trust the sender or 2) immediately transfer the funds out in which case you're still rate limited by the root chain.
That's in there.
> 12. The method of claim 11, further comprising: performing, by the first user device, a respective virtual currency transaction using each of the plurality of decrypted third user secondary wallet private keys to transfer the association of predefined amounts of the virtual currency associated with respective third user secondary wallets to the first user primary wallet.
So I'm not sure how this is supposed to "expedite" anything.
Edit: wait, no, that shouldn't be much faster, if at all. Still need to get it in a block and, IIRC, Ethereum is account based so this is basically how transfers already work, just using arithmetic...
I included links to Bitcoin BIP32 Hierarchical Deterministic Wallets (2012) and a description in another thread here. Is this HD Wallets with different terminology? Are they talking about transferring wallets keys instead of balances? If so, do they update the AML information with the exchange? You should never share your private key(s).
1. A virtual currency transaction system, comprising: a non-transitory memory; and one or more hardware processors coupled to the non-transitory memory and configured to read instructions from the non-transitory memory to cause the system to perform operations comprising: identifying a first user primary wallet that is associated with a virtual currency and that includes a first user primary wallet private key; creating a plurality of first user secondary wallets that each include a respective first user secondary wallet private key; performing a respective virtual currency transaction using the first user primary wallet private key to transfer an association of predefined amounts of the virtual currency from the first user primary wallet to each of the plurality of first user secondary wallets such that at least two of the plurality of first user secondary wallets are associated with different predefined amounts of the virtual currency; receiving, subsequent to associating the predefined amounts of the virtual currency with each of the plurality of first user secondary wallets, an instruction to transfer a payment amount to a second user; and allocating a subset of the first user secondary wallet private keys to the second user, wherein the subset of the first user secondary wallet private keys are included in respective first user secondary wallets that are associated with predefined amounts of the virtual currency that equal the payment amount.
I only read the claims, however.
America's patent system may not be perfect but this doesn't mean it's outright unproductive. This holds especially true when evaluated based on raw innovation. America's tech sector speaks for itself but is far from unique, America's pharmaceutical industry also comes to mind. Although widely criticized, and rightly so, the American industry produces nearly a third of the world's new molecular entities.
A logically similar argument (“fallacy of the single cause”) would be: Hawaii has a relatively low rate of gun violence yet their gun ownership is high, ergo gun ownership must be fine.
Of course some patents are good, but as market concentration increases in the US, IP has become abused by entrenched oligopolistic corporations. Most recent reputable studies find that the US patent system has probably been a net negative on innovation of late [1].
Bearing that in mind, I have no reason to believe a fully state-funded pharmaceutical system would be impossible, tied into healthcare. However, to make people complacent with that, it would have to be unbelievably transparent. Many people fear the idea of the state designing and providing them with drugs.
I'm also aware that there are all sorts of great medicines that have been invented and created and help people.
And, the economic incentives and distortions created seem detrimental.
Your allusion to the opiode crisis is actually a pretty non-trivial example. The opioid crisis is deeply connected to companies trying to push drugs into the market, get people addicted, and profit off of patents. Opioides are probably killing more people now than many other drugs combined are saving.
I could do without the entire profession of psychiatry for the most part, and the actually useful drugs - psychedelics - are being brought to market by a non-profit and are non-patentable by design. HTTP://Maps.org
I'm all for curious, creative and skilled scientists making drugs to help people - I don't like the side effects of the way the current economic system behind medicine works.
Regardless, patents in general are a net good for mankind. It incentivises innovation, as the inventor gets a monopoly for a limited time on new inventions.
What's the point in inventing anything if some other company (likely with more resources than you) can just come along and steal your ideas?
A first big step forward would be to increase the threshold. The current situation is ridiculous, - I think everyone agrees on that.
> Regardless, patents in general are a net good for mankind. It incentivises innovation, as the inventor gets a monopoly for a limited time on new inventions.
I cannot entirely disagree on that, - at least from today's perspective. However, what did people think about open source software 30 years ago? They would have said something similar as you did, - which is that companies would not have the motivation to invest time and money. What do people think today?
Imagine this case now:
I own a small company, Foo & Sons. I invent a new form of widget, that's 10% more efficient than other widgets. I can patent my new widget, and now I have exclusive right to manufacture these widgets in my factory for $1 a piece, selling them for $2 a piece.
Now, a big company, Widgets'R'Us, is capable of manufacturing these widgets for $0.50 each, as they have economies of scale. Without patent protection, they could make my widgets, and sell them for $1.50 each, putting me out of business. However, because of the patent, they'd have to pay me a fee if they wanted to make my widgets. I can now decide whether or not these royalties are more valuable tham making and selling widgets from my factory.
I think there is a stronger case for patents for processes that can be easily replicated, reverse engineered, and made profitably at scale (this is a key factor IMO), like lightbulbs or batteries or something. Even then though, I think there are cases to be made that patents still may not provide benefit. For example, why do people still buy Advil or Tylenol over a generic brand, is it perhaps trust in the brand and confidence in the purity and safety of the product?
- Patents are supposed to "teach" things. Yet in every place I've worked, employees are prohibited or at least actively discouraged from reading patents, because of liability concerns. So they fail at teaching because knowledge of what's in a patent is actually dangerous.
- The first month or so of reading those patents was basically about learning a whole new language. The terminology, twisted descriptions and deliberate obfuscation again makes the "teaching" aspect of patents utterly useless. No one in their right mind says, "I'm going to go learn some new stuff, so I'm off to read a bunch of patents." Nobody does that.
Patents don't teach, they're a land grab, and are about as hostile to the actual "Progress of Science and useful Arts" as a sucking chest wound.
I had a patent issued last year as sole inventor (software, but a legit invention), and I actually just found a patent doc at a company I'm working with earlier today (they have the patent number in their web app's footer). I was planning to scan through the diagrams.
To me patent text is strange compiled pseudo-legalese, but I have found some learning in the diagrams.
Knowingly infringing a patent can bring triple damages.
You can bet that the USPTO granted someone a patent on the linked list, or a common variant of a hash table (don't get me started on how the USPTO determines prior art -- they don't use common literature, they seem to just search the patent database). So if you accidentally read a patent on said linked list / hash table and use it in a product and you're sued for infringement, damages go up quite a bit. That's one reason companies discourage engineers from reading patents.
Back in the 1980s someone had a patent on "Network standard byte order". Didn't matter the order you chose (big or little endian, or inside-out like the PDP-11, or whatever). As long as it was a stable and common byte order used on the network, you infringed. The "inventor" was a friend of a friend, and reportedly he said, when the patent was granted, "I can't believe they gave that to me."
Yeah, patents are utterly busted.
Similarly, if you have a patent pending, you are required to advise the examiner as soon as you come across something that appears relevant. When I had one under examination by the USPTO I sent in a patent that I saw here on HN (which the examiner decided was irrelevant).
The point is that you have intent. Reading something and not recognising it as prior art is very different from reading something, recognising it as prior art and not disclosing it.
The rules you see about "don't read any patents" come from the professional paranoia which is universal to lawyers. It is a much tighter defence to say "it's impossible that we had knowledge and chose not to disclose, because we did not have knowledge, because we have an ironclad policy of avoiding reading patents" than it is to enter into detailed argument about who read or understood which patents on which dates.
The distinction is important. A corporate policy of "don't read patents" is not the same as the law. It is a pre-emptive defence tactic intended to deny a hostile litigant from using an expensive line of argument.
Again, I am not a lawyer, this is by no means advice. I just hope to convey that the law is generally far more comprehensive, sensible and subtle than telephone games give it credit for.
Source: mine took 4 years, including various rounds of asking for re-examination.
Patents are hard to read, and very easy to believe (especially for lay people) that they claim far more than they actually do. What you need to do is ignore everything but the claims. I am by no means an expert (I'm still somewhat confused as how relevant dependent claims are, for example), but the starting point is still easy.
Reading the first claim, the nexus of the claim is that it's a virtual currency system were you send money from wallet A to wallet B by routing it through distinct subwallets. There also seems to be an element that the subwallets are effectively fixed-size wallets (e.g., each subwallet represents a different coin as physical currency would have), but I would not bank a legal case on that. The other independent claims are effectively repetitions of this idea.
So, at best, this could be construed as a patent on tumblers, and definitely nothing wider-reaching than that. Even the claim that it would cover tumblers is somewhat stretching it, I think.