PayPal Moves into Blockchain with Patent for NFT Trading System
Summary:
PayPal has applied for a patent for a non-fungible token (NFT) purchasing and transfer system, paving the way for its blockchain ecosystem. The yet to be approved patent entails a model where users can trade NFTs through a mediated service. The system could facilitate fractional purchases, promote NFT liquidity via a dedicated platform, and enable earnings from royalties. Off-chain transactions could be conducted within an "omnibus wallet", avoiding the need for blockchain registration or transaction fees. The system could accept all forms of currency and is a significant development following the introduction of PayPal's own Ethereum-based stablecoin, PayPal USD (PYUSD).
PayPal has taken a significant step forward in establishing its blockchain realm by proposing a patent for a non-fungible token (NFT) purchasing and transfer protocol. The patent, filed in March and made available to the public on September 21, outlines a method for conducting on-chain and off-chain NFT transactions. The incomplete patent details a system where users are able to trade NFTs via a mediated third-party service. Although the service provider remains unspecified, references to Ethereum are made in the document. As related, PayPal has now permitted US clients to sell cryptocurrencies via the MetaMask wallet.
PayPal's vision extends beyond simply trading digital collectibles. They plan on utilizing the full capacity of NFTs as a means of tokenizing, with the NFT possibly embodying any distinct element of digital information traceable via a decentralized blockchain register. This includes digital art forms such as images and music, collectibles, as well as legal documents, personal property deeds, event tickets, and other tangible items.
This system can be modified to suit different needs. It could afford fractional sales by circulating governance tokens that can be traded individually. Also, a decentralized independent organization (DAO) in association with the service provider could be used to stimulate NFT liquidity on a dedicated platform. Furthermore, royalties could provide earnings from the NFTs.
The off-chain NFT transaction scheme, as suggested by PayPal, has been depicted via a diagram. Source: USPTO
The function executed by the service provider could include compliance and risk management. Users may have personalized digital wallets, but it is not compulsory. An alternative broker could provide an assortment of storage and checkout options. Off-chain dealings could be managed within an "omnibus wallet" linked with the service provider and encompasing both the purchaser and vendor's wallets. Hence, there would be no need to record the transfer on the blockchain, transmit the transaction to the blockchain network, or pay the related on-chain transaction gas fees.
The patent application conveys that any form of currency could be utilized in the system. PayPal introduced its own stablecoin, PayPal USD (PYUSD), constructed on Ethereum, back in August.
A statement from @PayPal's President and CEO on his first day at the helm illustrated his excitement to join a capable team on a significant mission "with a phenomenal history of diversifying how millions globally take charge of their financial affairs." He ended with an encouraging note to the PayPal team to "go change the world!"
A magazine article suggested that NFTs could help the next music sensation by tokenizing music royalties.
Published At
9/28/2023 6:57:26 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.