Square has secured a U.S. patent for their own Cryptocurrency payment network, this will allow merchants to accept payments in Bitcoin or any other cryptocurrency. This isn’t a ground-breaking movement but what sets Square apart from their predecessors, such as BitPay, is that adding Bitcoin to its list of accepted payment methods fits in seamlessly with its present Point of Sale system and would add no hassle to Square or its millions of merchants.
A key facet of the patent is that it details a process that eliminates latency in cryptocurrency transactions. This means that bitcoin transactions, typically associated with slow confirmation times, can be approved at roughly the same speed as a credit card payment. This is achieved by maintaining a private blockchain, although this will not completely eliminate the risk of double spend attacks, it instead burdens that risk on the payment service instead of on a merchant.
The patent guarantees no future action from Square, it is common for institutions to apply for meaningless blockchain patents just for the sake of good PR. However, Square differs in that they have actually undertaken blockchain research and CEO, Jack Dorsey, is a hugely vocal of his belief in cryptocurrency and even stated that he believes Bitcoin could be the internet’s native currency within the next decade.
What does this mean for Ripple?
Ripple offer a somewhat similar service, a real-time gross settlement system that allows for rapid and seamless global transactions. An argument could be made that Square is now in competition with Ripple. Here at Nouvive, we believe this isn’t the case because Square predominately operate in the B2C market and typically same-nation transactions. Whereas Ripple focuses on global payments between major institutions and international enterprises. We don’t see these two paths crossing anytime soon