Financial services and mobile payment company Square thinks it has found a way to turn fiat into crypto in real-time point-of-sale transactions.
How it works
On Jan. 21, the United States Patent Office awarded Square a patent for a technology that the team argues cracks a present barrier in merchant transactions:
“All cryptocurrencies face the same drawback in that they are not widely accepted. Presently, cryptocurrencies, like bitcoin, are not accepted by most retail merchants, or even by most online merchants.”
The team cited a number of drawbacks to current crypto spending. Transactions take a while to process. Minor advances still defy practical timeframes, like buying a hypothetical cup of coffee in a transaction that the blockchain could take hours to record. The anonymity of cryptocurrencies exposes merchants to possible criminal activity, like money laundering. There’s also the purely money angle, as the fluctuation of crypto exchange rates poses a financial risk to business owners.
But let’s say a consumer purchases that cup of coffee. The technology would receive a request for payment in the consumer’s asset-of-choice — while using a privacy coin — and approve it for the merchant to get full value in their asset-of-choice, all in real-time.
Cointelegraph reached out to Square about the technology’s possible usage across point-of-sale devices, but a spokesperson declined to confirm a specific pending usage for the newly patented system.
On Jan. 21, Square announced on its blog the start of a Lightning Development Kit (LDK). Larger than a node, LDK would customize experiences for wallet and application developments, including an API, language bindings and demo apps. The shaky structure of Lightning as is, the blog argues, is just that — shaky. Improvements, however, would lead to low-fee Bitcoin payments “as common as cash used to be.”