[Rejected: 4] Mobile Payment Firm Square Awarded U.S. Patent for Fiat-to-Crypto Payments System
US Patent and Trademark Office has awarded the financial services and mobile payment company, Square, a patent to unveil a new system, which enables cryptocurrency-to-fiat transactions.
Square is the payment service provider founded and run by Twitter CEO Jack Dorsey. The company was established in 2009 by Jim Mckelvey and Jack Dorsey in their hometown of St. Louis, the same time when Twitter, Dorsey’s other firm, was starting to take off.
The Nature of Square’s Patent Innovation
With the patent award, Square thinks that it has obtained a way to turn fiat money to cryptocurrency in real-time point of sale transactions. The new patent handles a payment system, which allows customers holding different assets to transact with one another in real-time. This is a significant advancement towards the mainstream application of digital assets in day-to-day business.
The technology will enable a person to pay in any currency, and allow the recipient to obtain that payment in whatever currency they choose. The network automatically changes the first payment into the desired currency. The exchange of various currencies happens directly through the network itself, and the parties doing the transactions don’t need to take any additional steps.
The patent network would also work in reverse. This implies that someone could easily issue digital currency while requesting a fiat payment to be given to the other person.
This could effectively provide another way for retail customers to use cryptocurrency to buy goods at brick-and-mortar stores and traditional online shops.
According to the Coindesk source, cryptocurrency payments, particularly those associated with Bitcoins, can often take a minimum of 10 minutes to confirm. But Square’s proposed system could significantly reduce that down to seconds, thus making cryptocurrency transactions the same as those of credit cards.
Allowing crypto-to-fiat payments to flourish would give cryptos a boost. Many of cryptocurrencies are not fast enough to become an effective payment option or are too volatile, but they now can blend seamlessly with other types of currencies.
The system will remove boundaries by allowing users to receive and pay in any denomination. This would be a significant use in the retail sector as the technology would encourage several merchants to accept payments like cryptocurrencies and process payments within a few seconds.
Lightning Network for Better Production
Square’s crypto arm, popularly recognized as Square Crypto, recently announced that it has created a lightning development kit (LDK).
The kit is similar to a standard software development kit (SDK). However, LDK is focused on the Lightning Network that is a second-layer scaling solution, which takes the pressure of some transactions off the main chain to allow for lightning-fast, cross-chain transfers and minimal costs.
The LDK comes with many tools, including demo apps, language tools, an API, and other features to assist in integrating Lightning payments with various wallets and enabling Bitcoin to become a more widely used currency.
Square has recently been making moves in the payments sphere, like launching its Cash App to allow users to purchase stocks. The app allows customers to buy stocks for as little as $1. It has become a popular app as it has 15 million active users each month.
Dorsey has been a major proponent of the widespread adoption of cryptocurrency and has frequently revealed his belief that Bitcoin could become a viable and strong currency – due to its overall quality, strong brand, and longevity – as a way of making payments. It’s based on this reason that Dorsey does not intend to create his own crypto, but concentrate on boosting Bitcoin.