Ebay, the internet’s largest auction house and marketplace, filed a patent in 2011 which was accepted and has now become of interest as it mentions Bitcoin, titled “System And Method For Managing Transactions In A Digital Marketplace,” that enables them to process transactions involving digital currencies, such as Bitcoin.
The patent application includes the following description of a process that would reference an exchange rate in order to exchange currencies:
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…determining whether the transaction request is a request for currency exchange; and based on the transaction request being a request for currency exchange, accessing an exchange rate and completing the transaction requesting based on the exchange rate […] wherein at least one currency being exchanged comprises a currency issued by a private entity.
Going on later to describe what seems to be a process for actually functioning as an exchange:
The currency module is configured to manage exchange of digital currency. Accordingly, the currency module allows a user to trade one form of currency for another form of currency. In one embodiment, one of the forms of currency being traded is cash. The digital currency may be used to pay for real-world financial obligations (e.g., bills) as well as for virtual-world obligations.
As such, the currency module enables marketplace financial services to be provided via the networked system. The currency module may maintain or access an exchange rate for conversion between two forms of currency and perform the conversion based on the exchange rate
The patent then describes how the exchanging function would be used to purchase from Ebay, or elsewhere:
The payment system allows users to accumulate value (e.g., in a commercial currency, such as the U.S. dollar, or a proprietary currency, such as points, miles, or other forms of currency provide by a private entity) in their accounts, and then later to redeem the accumulated value for products (e.g., goods or services) that are made available via the publication system or elsewhere on the [internet].
The actual language says, “…elsewhere on the network 104” but network 104 is earlier defined as “E.G. the internet, wireless networks[…].”
While this patent seems to be a straight forward way to incorporate privately issued currencies (like reward points, which it references numerous times) with Ebay, it leaves the door open to processing cryptocurrencies as the patent references “digital currencies” in its exchange section.
Of course, Ebay owns internet payment processor PayPal, whose CEO John Donahue has stated interest in Bitcoin previously when speaking to The Wallstreet Journal.
Should Ebay or PayPal move forward with Bitcoin soon, they will be among just a couple of large publicly-traded companies that have incorporated the protocol. Overstock.com has bragged of its success accepting Bitcoin; however, they process payments through Coinbase.
How exactly Bitcoin will fit the structures of Ebay and PayPal remains to be seen, but this patent is a clear indication that the companies do not intend to be left out of the cryptocurrency discussion.