PayPal, a major digital payments provider, is diving deeper into blockchain with a recently unveiled patent filing that unveils a system facilitating the transfer and trade of non-fungible tokens (NFTs) within its network.
The patent application, filed in March 2022 and revealed in September, introduces a system for “off-chain transactions via an NFT marketplace.” This innovation allows PayPal users to transfer NFTs to others within the network.
The patent application provides detailed technical insights into how this off-chain NFT transaction system operates. It outlines that “a plurality of digital wallets associated with a service provider” will have access to the NFT marketplace, which corresponds to a decentralized blockchain linked to a separate entity from the service provider.
Here’s a breakdown of how the system works: When a user requests a transaction involving the purchase of an NFT from a specified source address via the NFT marketplace, the system checks if the source address corresponds to another user on the PayPal network. If it does, the NFT’s identifier is updated from the second user to the first user.
In essence, this system facilitates off-chain NFT transactions within a marketplace, granting various wallets access to NFTs, all interconnected through a service provider.
On a broader scale, PayPal’s foray into NFT transfers underscores the continued mainstream interest in NFTs, despite fluctuations in the industry, such as the declining floor prices of popular projects like Bored Apes Yacht Club (BYAC).
This development is part of PayPal’s ongoing crypto-related endeavors. In August, the company introduced PayPal USD (PYUSD), a U.S. dollar-denominated stablecoin backed by U.S. dollar deposits and similar assets. Additionally, PayPal updated its terms and conditions to introduce the ‘Cryptocurrencies Hub,’ enabling users to interact with cryptocurrencies through their PayPal accounts.
The Cryptocurrencies Hub allows users to buy, hold, sell, convert between cryptocurrencies, send and receive crypto assets, and access market information and educational content.
Considering these recent developments and the patent application, it’s likely that PayPal will integrate NFTs into its Cryptocurrencies Hub once the patent receives approval. For now, the patent remains pending.
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