Technical Field
[0001] The present disclosure relates to systems for executing
financial transactions, for example in respect of executing bitcoin financial
transactions, namely for executing secure payments employing blockchain-
based technologies such as Bitcoin. Moreover, the present
disclosure concerns methods of executing financial transactions, for
example in respect of executing bitcoin financial transactions.
Furthermore, the present disclosure relates to computer program products
comprising non-transitory computer-readable storage media having
computer-readable instructions stored thereon, the computer-readable
instructions being executable by a computerized device comprising
processing hardware to execute aforesaid methods.
Background
[0002] ”Bitcoin” is a known contemporary peer-to-peer (P2P)
payment system introduced as open source software in the year 2009 by a
developer Satoshi Nakamoto. The Bitcoin payment system is operable
such that payments in the system are recorded in a public ledger using its
own unit of account, known as “bitcoin”. On account of “bitcoin” being not
exactly the same as “real” money, for example fiat currencies such as the
US dollar and the Euro, bitcoin is nevertheless commonly referred to as
a “digital currency”, a “virtual currency”, electronic money,
or “cryptocurrency”. The bitcoin system is not controlled by a single entity,
such as a central bank, which has led the US Treasury to call bitcoin a
“decentralized currency”. Moreover, on account of bitcoins being
susceptible to being transferred directly from one person to another, the
bitcoins are sometimes described as being “digital cash”.
[0003] Bitcoins are created as a payment reward for processing
work; such processing work involves users offer their computing power to
verify and record payments into a public ledger associated with Bitcoin.
Moreover, such processing work is referred as “mining”, wherein, in
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practice, individuals or companies engage in processing work in exchange
for transaction fees and newly created bitcoins. Besides mining, bitcoins
can be obtained in exchange for other currencies, products and/or
services. Moreover, users can send and receive bitcoins electronically for
an optional transaction fee using wallet software executable on a personal
computer, on a mobile communication device, or via use of a web
application, for example.
[0004] Bitcoin as a form of payment for products and services has
recently experienced growth. However, the European Banking
Authority has warned that bitcoins lack consumer protections; bitcoins can
be stolen, and chargebacks are impossible in an event of theft occurring.
Commercial use of bitcoin is presently small compared to its use by
financial speculators.
[0005] In the aforementioned bitcoin system, an important element
is a ledger. The ledger records financial transactions which have been
executed using bitcoins. Recording such financial transactions is
accomplished without an intermediation of any single, central authority.
Instead, multiple intermediaries exist in a form of
computer servers executing bitcoin software. These computer servers
form a network connected via the Internet, wherein anyone can potentially
join the network. Transactions accommodated by the network are of a
form: “payer A wants to send Z bitcoins to payee B”, wherein the
transactions are broadcast to the network using readily available software
applications. The computer servers function as Bitcoin servers that are
operable to validate these financial transactions, add a record of them to
their copy of the ledger, and then broadcast these ledger additions to other
servers of the network.
[0006] Just as a ledger can be used to record transfers of
conventional fiat money such as US dollars, all bitcoin transfers are
recorded in a computer file that acts as a ledger called a “block chain”.
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Whereas a conventional ledger records a transfer of actual dollar bills
or promissory notes that exist apart therefrom, bitcoins are simply entries
in a block chain and do not exist outside the block chain. However, this
then requires that the integrity and accuracy of entries in the block change
have to be reliable in order for the Bitcoin system to function in practice.
[0007] Maintaining the block chain is referred to as ”mining”, and
those who do such maintenance are rewarded with newly created bitcoins
and transaction fees as aforementioned. Miners may be located on any of
Earth’s continents and process payments by verifying each transaction as
valid and adding it to the block chain; such verification is achieved via
consensus provided by a plurality of miners, and assumes that there is no
systematic collusion. In the year 2014, payment processing was
contemporarily rewarded with twenty five newly created bitcoins per block
added to the block chain. To claim a reward for mining, a special
transaction called a coinbase is included with the processed payments.
All bitcoins in circulation can be traced back to such coinbase
transactions. There is thus employed a bitcoin protocol which specifies
that the reward for miners adding a block will be halved to 12.5 bitcoins in
the year 2017, and halved again approximately every four years.
Eventually, the reward will be removed entirely when an arbitrary limit of
21 million bitcoins is reached in circa year 2140, and transaction
processing will then be rewarded solely by transaction fees. Paying a
transaction fee is optional, but may speed up confirmation of the
transaction executed in bitcoins. Payers of bitcoins have an incentive to
include transaction fees because their transactions will likely be added to
the block chain sooner; miners can choose which transactions to process
and prefer to include those that pay fees.
[0008] Ownership of bitcoins associated with a certain bitcoin
address can be demonstrated with knowledge of a private key belonging
to the address. For a given owner, it is important to protect the private key
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from loss or theft. If a private key of a given user is lost, the given user
cannot prove ownership by any other means. The bitcoins are then lost
and cannot be recovered. Since anyone with knowledge of the private key
has ownership of any associated bitcoins, theft occurs when a private key
is revealed or stolen. Thus, a technical problem addressed by the present
disclosure is how to trade more readily in bitcoins, and yet maintain a high
degree of security in respect of such private keys.
[0009] The public nature of bitcoin means that, while those who use
it are not identified by name, linking transactions to individuals and
companies is feasible. Moreover, many jurisdictions require exchanges,
where users can buy and sell bitcoins for cash, to collect personal
information. In order to obfuscate a link between users and their
transactions, some users employ a different bitcoin address for each
transaction and other users rely on “mixing services” that allow users to
trade bitcoins whose transaction history implicates them for coins with
different transaction histories.
[0010] Bitcoins can be bought and sold in respect of many different
types of contemporary fiat currencies, for example from individuals and
companies. A contemporarily fast way to purchase bitcoins is in person or
at a bitcoin ATM for cash. Participants in online exchanges offer
bitcoin buy and sell bids. Using an online exchange to obtain bitcoins
entails some risk, and according to one study, 45% of exchanges fail and
take client bitcoins with them. Since bitcoin transactions are irreversible,
sellers of bitcoins must take extra measures to ensure they have received
contemporary fiat currency funds from an associated buyer.
[0011] In the Bitcoin system, bitcoins can be kept in wallets, in a
manner somewhat akin to contemporary fiat currencies. Whereas bitcoin
wallets are often described as being a place to hold or store bitcoins, due
to the nature of the Bitcoin system, bitcoins are inseparable from the block
chain transaction ledger, as aforementioned. Thus, a bitcoin wallet is
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something "… that stores digital credentials for a given user’s bitcoin
holdings…" and allows the given user to access and spend them. The
Bitcoin system utilizes public-key cryptography, in which two cryptographic
keys, one public key and one private key, are generated. The public key
can be thought of as being an account number, and the private key can be
thought of as being ownership credentials. At its most basic, a bitcoin
wallet is a collection of these keys. However, most bitcoin software also
includes a functionality to make bitcoin transactions,
[0012] Bitcoin wallet software, sometimes referred as being
“bitcoin client software”, allows a given user to transact bitcoins. A wallet
program generates and stores private keys, and communicates with peers
on the bitcoin network. A first wallet program called “Bitcoin-Qt” was
released in the year 2009 by Satoshi Nakamoto as open source code;
Bitcoin-Qt is also sometimes referred to as “Satoshi client”. The wallet
program can be used as a desktop wallet for payments or as a server
utility for merchants and other payment services. Moreover, Bitcoin-Qt is
sometimes referred to as being the reference client, because it serves to
define a bitcoin protocol and acts as a standard for other implementations.
As of version 0.9, Bitcoin-Qt has been renamed “Bitcoin Core” to describe
its role in the Bitcoin network more accurately; when making a purchase
with a mobile communication device, for example a smart phone, QR
codes are used ubiquitously to simplify transactions.
Several server software implementations of the bitcoin protocol exist. Socalled
full nodes on the Bitcoin network validate transactions and blocks
they receive, and relay them to connected peers for providing consensus
verification of bitcoin transactions.
[0013] An important issue in relation to bitcoin security is the
prevention of unauthorized transactions occurring in respect of a given
user’s bitcoin wallet. A bitcoin transaction permanently transfers ownership
of a bitcoin to a new address, wherein the transaction has an associated
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data string having a form of random letters and numbers derived from
public keys by application of a hash function and encoding scheme. The
corresponding private keys act as a safeguard for the given user; a valid
payment message from an address must contain an associated public key
and a digital signature proving possession of the associated private key.
As anyone with a private key can spend all of the bitcoins associated with
the corresponding address, protection of private keys is very important in
the Bitcoin system. Loss of a private key potentially results in theft; a risk
of theft occurring can be reduced by generating keys offline on
an uncompromised computer and saving them on external
storage devices or paper printouts.
[0014] A first bitcoin ATM was installed in October 2013
in Vancouver, British Columbia, Canada. By 23 November 2013, the total
market capitalization of bitcoin exceeded US$10 billion. Growth of the
bitcoin supply is predefined by the bitcoin protocol. Presently, there are
over twelve million bitcoins in circulation with an approximate creation rate
of twenty five bitcoins every ten minutes. The total supply of bitcoins is
capped at an arbitrary limit of twenty one million bitcoins, and every four
years the creation rate of bitcoins is halved. This means new bitcoins will
continue to be released for more than a hundred years.
[0015] Financial journalists and analysts, economists, and investors
have attempted to predict a possible future value of bitcoin. When bitcoins
potentially attain a very high value per bitcoin, relative to known fiat
currencies such as USD and Euro, executing small purchases via use of
bitcoins, for example in shops, boutiques and cafeterias, becomes a
technical problem.
[0016] A theft of a given bitcoin is an unauthorized transfer from a
bitcoin address using an associated private key to unlock the address. On
account of bitcoin transactions being irreversible and the identity of users
difficult to unmask, it is rare that stolen bitcoins are recovered and
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returned. Theft occurs on a regular basis despite claims made by the
Bitcoin Foundation that theft is impossible. However, as aforementioned,
generating and storing keys offline mitigates the risk of theft. Most largescale
bitcoin thefts occur at exchanges or online wallet services that store
the private keys of many users. A thief hacks into an online wallet service
by finding a bug in its website or spreading malware to computers holding
the private keys.
[0017] Bitcoin-related malware includes software that steals bitcoins
from users by using a variety of techniques, for example by employing
software that uses infected computers to mine bitcoins, and different types
of ransomware, which disable computers or prevent files from being
accessed until some payment is made. Security company Dell
SecureWorks had, in February 2014, allegedly identified 146 types of
bitcoin malware; about half of such malware is undetectable with
standard antivirus scanners.
[0018] Some malware can steal private keys for bitcoin wallets
allowing the bitcoins themselves to be stolen. The most common type of
malware searches computers for cryptocurrency wallets to upload to a
remote server where they can be cracked and their bitcoins stolen. Many
of these also log keystrokes to record passwords, often avoiding the need
to crack the keys. A different approach detects when a bitcoin address is
copied to a clipboard and quickly replaces it with a different address,
tricking people into sending bitcoins to the wrong address. This method is
effective for stealing bitcoins, because bitcoin transactions are irreversible,
as aforementioned.
[0019] The Bitcoin network itself is potentially vulnerable to attack
and corruption, as will now be elucidated. There are two main ways the
blockchain ledger can be corrupted to steal bitcoins, namely by
fraudulently adding to or modifying it. The Bitcoin system protects the
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blockchain against both using a combination of digital
signatures and cryptographic hashes.
[0020] Payers and payees using the Bitcoin system are identified in
the blockchain by their public cryptographic keys. Most contemporary
bitcoin transfers are from one public key to a different public key; in
practice hashes of these keys are used in the blockchain, and are called
"bitcoin addresses". In principle, a hypothetical attacker person A could
steal money from person B and person C by simply adding transactions to
the blockchain ledger like “person B pays person A 100 bitcoins”, “person
C pays person A 200 bitcoins”, and so on, using of course these users’
bitcoin addresses instead of their names. The bitcoin protocol prevents
this kind of theft by requiring every transfer to be digitally signed with the
payer's private key; only signed transfers can be added to the blockchain
ledger. Since person A cannot forge person Bs signature, person A cannot
defraud person B by adding an entry to the blockchain equivalent
to “person B pays person A 200 bitcoins”. At the same time, anyone can
verify person B’s signature using his/her public key, and therefore that
he/she has authorized any transaction in the blockchain where he/she is
the payer.
[0021] Another principal manner in which to steal bitcoins is to
modify blockchain ledger entries. Aforementioned person A could buy
something from person B, like a digital church organ or a yacht, by adding
a signed entry to the blockchain ledger equivalent to person A pays
person B 200 bitcoins. Later, after receiving the digital church organ or
yacht, person A could modify that blockchain ledger entry to read
instead: “person A pays person B 2 bitcoins”, or even delete the entry.
Digital signatures cannot prevent this attack: person A can simply sign
his/her entry again after modifying it.
[0022] To prevent modification attacks, the Bitcoin system first
requires entries be added to the blockchain in groups or blocks, not one at
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a time. More importantly, each block must be accompanied by
a cryptographic hash of three things:
(i) a hash of the previous block;
(ii) the block itself; and
(iii) a number called a nonce.
[0023] A hash of only the first two items will, like any cryptographic
hash, always have a fixed number of bits, for example 256 for SHA-256.
The nonce is a number which, when included, yields a hash with a
specified number of leading zero bits. On account of cryptographic hashes
being essentially random, in the sense that their output cannot be
predicted from their inputs, there is only one known way to find the nonce:
to try out integers one after the other, for example 1, then 2, then 3, and so
on. This process is called ”mining”. The larger the number of leading
zeros, the longer on average it will take to find a requisite nonce. The
Bitcoin system constantly adjusts the number of leading zeros, so that the
average time to find a nonce is about ten minutes. That way, as
processing capabilities of computing hardware increase with time, over the
years, the bitcoin protocol will simply require more leading zero bits to
make mining always take a duration of about ten minutes to implement.
[0024] This Bitcoin system prevents modification attacks, in part,
because an attacker has to recalculate all the hashes of the blocks after
the modified one. In the example above, if person A wants to change 200
bitcoins to 2 bitcoins, he/she will not only have to recompute the hash of
the block in which the transaction is recorded, but also compute the hash
of all the blocks that come after it; he/she will have to recreate the chain of
blocks, which is extremely difficult. He/she can do this, but it will take
him/her time, about ten minutes on average per block. However, during
that time, the network will continue to add blocks, and it will do so much
faster than person A can mine. Person A would have to recalculate all the
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blocks before the network could add a new one, or at least catch up with
or overtake the network's miners. To do this, he/she would have to have
roughly as much computing power as a majority of the existing bitcoin
miners combined. This would be very expensive and, if the bitcoin network
were large enough, likely infeasible to implement. Moreover, because of
financial incentives to mine described below, it will make more financial
sense for person A to devote his/her resources to normal bitcoin mining
instead. Thus, the Bitcoin system protects against fraudulent blockchain
modifications by making them expensive and, if a given attacker is
rational, unappealing because it makes less financial sense than
becoming a miner. These attacks become more expensive and less
feasible as the number of miners increases, making the whole Bitcoin
system become even more secure.
[0025] The Bitcoin system is based on an innovative solution of a
problem common to all digital currency and payment schemes, namely
“double-spending”. With paper money or physical coins, when a given
payer transfers money to a given payee, the payer cannot keep a copy of
that dollar bill or coin. With digital money, which is just a computer file, this
is not the case, and the payer could in principle spend the same money
again and again, repeatedly copying of the file. With bitcoin, when person
A offers to pay person C some bitcoins, person C can always first check
the blockchain ledger to verify that person A actually owns that many
bitcoins. Of course, person A could try to pay many people
simultaneously, but the Bitcoin system can defend against that. If person
A offers to pay person C some bitcoins in exchange for goods, person C
can stipulate that he/she will not deliver the goods until person A's
payment to person C appears in the blockchain, which typically involves
waiting about ten minutes. However, such a long period of waiting is
inappropriate when making small purchases using bitcoins, for example in
a boutique, ticket office or cafeteria.
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[0026] A race attack in the Bitcoin system can potentially occur as
follows: if the bitcoin transaction has no confirmations, shops and services
which accept payment via bitcoins can be exposed to a “race attack”. For
example, two bitcoin transactions are created for the same funds to be
sent to different shops/services. Bitcoin system rules ensure that only one
of those bitcoin transactions can be added to the block chain. Shops can
take numerous precautions to reduce this type of race attack.
[0027] In an event of a Finney attack in the Bitcoin system, shops or
services which accept bitcoin transactions without any confirmation are
affected. A Finney attack is an attack which requires the participation of
a miner to premine a block, and then send the bitcoin money to be
defrauded back to the fraudster. The risk of such an attack cannot be
reduced to nothing, regardless of preventative measures taken by shops
or services, but it does require the participation of a miner and an ideal
combination of contributing factors. Potentially, the miner risks a potential
loss of the block reward. In a similar manner to the race attack, the shop
or service must seriously consider its policies concerning bitcoin
transactions which are implemented without any confirmation.
[0028] In a “Vector76” attack, namely an attack with confirmation,
this is a combination of the two aforementioned attacks, which gives a
perpetrator an ability to spend funds twice simply by employing a
confirmation. Moreover, in a brute force attack, the brute force attack is
possible, even if the shop or service is expecting several transaction
confirmations. It requires the attacker to be in possession of relatively
high-performance hardware, capable of functioning at a hash frequency.
In the brute force attack, the attacker sends a bitcoin transaction to the
shop paying for a product/service, and at the same time continues looking
for a connection in the block chain, namely for a block chain fork, which
recognizes this transaction. After a certain number of confirmations, the
shop sends the product. If the attacker has found more than N blocks at
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this point, he/she breaks his/her block chain fork and regains his/her
money, but if the attacker has not succeeded in doing this, the attack can
be deemed a failure and the funds are sent to the shop, as should be the
case. The success of this brute force attack depends on the speed,
namely the hash frequency, of the attacker and the number of
confirmations for the shop/service. For example, if the attacker possesses
10% of the calculation power of the bitcoin network and the shop expects
6 confirmations for a successful transaction, the probability of success of
such a brute force attack will be 0.1%.
[0029] It will be appreciated from the foregoing that the Bitcoin
system has several potential weaknesses when employed in practice to
make payments. However, increasingly, users are desirous to use
bitcoins to make small everyday payments, for example in shops, in
boutiques, and in cafeterias. Contemporary mobile Bitcoin payment
systems are based on multiple steps and require mobile application
software (”apps”) to be downloaded into a mobile wireless communication
device, for example a smart phone, and a mobile Internet connection to be
available. Moreover, bitcoin transaction authentication, as described in
the foregoing, requires time and significant amount of communication
resources. Furthermore, authorization of Bitcoin-based transactions takes
a long time and involves multiple steps, namely:
(i) payment with bitcoins involves multiple steps to be
performed by a given user;
(ii) payment with bitcoins takes a long time to implement
securely; and
(iii) payment with bitcoins is not user-friendly.
Summary
[0030] The present invention seeks to provide a system and
associated method which are more secure when making payments, for
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example using a mobile wireless communication device such as a smart
phone.
[0031] According to a first aspect, there is provided a system as
defined in appended claim 1: there is provided a system for implementing
at least one cryptocurrency transaction at a point-of-sale by using a mobile
terminal, wherein the system is operable to provide authentication for
implementing the one or more cryptocurrency transactions, characterized
in that the system is operable:
(a) to send at least one authentication request for the at least one
cryptocurrency transaction from a payment terminal to a payment
service hosted via one or more virtual computing machines,
wherein the payment service is operable to provide a request for a
5 Personal Identification Number (PIN) code at the mobile terminal;
(b) to send the PIN code from the mobile terminal via a secure channel
to open a vault in the one or more virtual machines, wherein the
vault contains one or more private keys (PK) which are useable for
authenticating the at least one cryptocurrency transaction; and
10 (c) to confirm execution of the at least one cryptocurrency transaction
to at least the payment terminal.
[0032] The invention is of advantage in that using the mobile
terminal via its PIN code to control one or more private keys for
authentication in a proxy manner, via at least one virtual machine, is
capable of enabling more secure cryptocurrency transactions.
[0033] Optionally, in the system, the secure channel is implemented
via at least one secure Unstructured Supplementary Service Data (USSD)
channel.
[0034] Optionally, in the system, the one or more private keys (PK)
are stored in non-volatile memory of the one or more virtual computing
machines, and are read therefrom to random access memory (RAM) for
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use as an authentication script in a cryptocurrency transaction
authentication session for implementing the at least one cryptocurrency
transaction.
[0035] Optionally, in the system, the non-volatile memory is
implemented as hard disk memory of the one or more virtual computing
machines.
[0036] Optionally, in the system, the one or more private keys (PK)
are stored in an encrypted state in the non-volatile memory, and are
decrypted using the PIN code to generate the authentication script for use
in authenticating the one or more cryptocurrency transactions.
[0037] Optionally, in the system, the one or more private keys
decrypted and read to the random access memory (RAM) are deleted
therefrom after the at least one cryptocurrency transaction has been
authenticated.
[0038] Optionally, the system is operable to implement the at least
one cryptocurrency transaction using a bitcoin cryptocurrency.
[0039] Optionally, in the system, the payment terminal and the
mobile telephone are provided with a near-field communication
arrangement for mutually communicating via the near-field communication
arrangement, when initiating the at least one cryptocurrency transaction.
More optionally, in the system, the near-field communication arrangement
is implemented using a radio frequency identification (RFID) apparatus
associated with the payment terminal and the mobile terminal. “Near-field
communication” pertains to relatively low-power, for example mW radiation
power level, communication having a communication range of less than
100 metres, more optionally having a communication range of less than 10
metres.
[0040] According to a second aspect, there is provided a method of
using a system for implementing at least one cryptocurrency transaction at
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a point-of-sale by using a mobile terminal, wherein the system is operable
to provide authentication for implementing the one or more cryptocurrency
transactions, characterized in that the method includes:
(a) sending at least one authentication request for the at least one
cryptocurrency transaction from a payment terminal to a payment
service hosted via one or more virtual computing machines,
wherein the payment service is operable to provide a request for a
5 Personal Identification Number (PIN) code at the mobile terminal;
(b) sending the PIN code from the mobile terminal via a secure channel
to open a vault in the one or more virtual machines, wherein the
vault contains one or more private keys (PK) which are useable for
authenticating the at least one cryptocurrency transaction; and
10 (c) confirming execution of the at least one cryptocurrency transaction
to at least the payment terminal.
[0041] Optionally, the method includes implementing the secure
channel via at least one secure USSD channel.
[0042] Optionally, the method includes storing the one or more
private keys (PK) in non-volatile memory of the one or more virtual
computing machines, and reading the one or more private keys (PK)
therefrom to random access memory (RAM) for use as an authentication
script in a cryptocurrency transaction authentication session for
implementing the at least one cryptocurrency transaction.
[0043] Optionally, the method includes implementing the nonvolatile
memory as hard disk memory of the one or more virtual computing
machines.
[0044] Optionally, the method includes storing the one or more
private keys (PK) in an encrypted state in the non-volatile memory, and
decrypting the one or more private keys (PK) using the PIN code to
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generate the authentication script for use in authenticating the one or more
cryptocurrency transactions.
[0045] Optionally, the method includes deleting the read one or
more decrypted private keys from the random access memory (RAM) after
the at least one cryptocurrency transaction has been authenticated.
[0046] Optionally, the method includes operating the system to
implement the at least one cryptocurrency transaction using a bitcoin
cryptocurrency.
[0047] Optionally, the method includes providing the payment
terminal and the mobile telephone with a near-field communication
arrangement for mutually communicating via the near-field communication
arrangement, when initiating the at least one cryptocurrency transaction.
More optionally, the method includes implementing the near-field
communication arrangement using RFID apparatus associated with the
payment terminal and the mobile terminal.
[0048] According to a third aspect of the invention, there is provided
a computer program product comprising a non-transitory computerreadable
storage medium having computer-readable instructions stored
thereon, the computer-readable instructions being executable by a
computerized device comprising processing hardware to execute a
method of the second aspect.
[0049] It will be appreciated that features of the invention are
susceptible to being combined in various combinations without departing
from the scope of the invention as defined by the appended claims.
Description of the diagrams
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[0050] Embodiments of the present disclosure will now be
described, by way of example only, with reference to the following
diagrams wherein:
[0051] FIG. 1 is an illustration of a high-level architecture
representing a manner of Bitcoin system operation;
[0052] FIG. 2 is an illustration of an example user interface of a
Bitcoin application executed upon computing hardware in a mobile
terminal, for example a smart phone;
[0053] FIG. 3 is an illustration of a payment flow chart according to
an embodiment of the present disclosure; and
[0054] FIG. 4 is an illustration of an example regarding a manner in
which to open private keys (PK) in a virtual machine.
[0055] In the accompanying diagrams, an underlined number is
employed to represent an item over which the underlined number is
positioned or an item to which the underlined number is adjacent. A nonunderlined
number relates to an item identified by a line linking the nonunderlined
number to the item. When a number is non-underlined and
accompanied by an associated arrow, the non-underlined number is used
to identify a general item at which the arrow is pointing.
Description of embodiments
[0056] Embodiments of the disclosure will now be described in
greater detail, wherein technical terms and phrases used to describe the
embodiments are elucidated in Table 1.
[0057] Table 1: Terms and phrases used to described embodiments
of the disclosure
Term or phrase Detailed explanation
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Address A Bitcoin address is similar to a physical address or an
e-mail. It is the only information that is needed to
provide for a first user to pay a second user with Bitcoin.
An important difference, however, is that each address
should only be used for a single transaction.
Bitcoin Bitcoin - with capitalization “B” - is used when describing
a concept of Bitcoin, or an entire network itself, for
example "I was learning about the Bitcoin protocol
today."
bitcoin bitcoin - without capitalization “b”, is used to describe
bitcoins as a unit of account, for example "I sent ten
bitcoins today."; it is also often abbreviated to BTC or
XBT.
Block A block is a record in a block chain that contains and
confirms many waiting bitcoin transactions. Roughly
every 10 minutes, on average, a new block including
transactions is appended to the block chain through
mining, as described in the foregoing.
Block Chain A block chain is a public record of Bitcoin transactions in
a chronological order. The block chain is shared
between all Bitcoin users. It is used to verify the
permanence of Bitcoin transactions and to prevent
double spending, as aforementioned.
BTC BTC is the common unit of Bitcoin currency. It can be
used in a similar way to USD for US dollar instead of $.
Confirmation Confirmation means that a transaction has been
processed by the Bitcoin network and is highly unlikely
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to be reversed. Bitcoin transactions receive a
confirmation when they are included in a block and for
each subsequent block. Even a single confirmation can
be considered secure for low value transactions,
although for larger amounts such as 1000 USD, it is
recommended to wait for 6 confirmations or more. Each
confirmation exponentially decreases a risk of a
reversed bitcoin transaction occurring.
Cryptography Cryptography is the branch of mathematics that allows
creation of mathematical proofs that provide high levels
of security. Online commerce and banking already use
cryptography. In the case of Bitcoin, cryptography is
used to make it substantially impossible for a given user
to spend funds from another user's wallet or to corrupt
the block chain. It can also be used to encrypt a wallet,
so that it cannot be used without a password.
Double Spend If a malicious user tries to spend their bitcoins in respect
of two or more different recipients at the same time, this
is referred as being “double spending”. Bitcoin mining
and the block chain are there to create a consensus on
the Bitcoin network about which of the two or more
transactions will confirm and be considered valid.
Hash Rate The hash rate is the measuring unit of the processing
power of the Bitcoin network. The Bitcoin network must
make intensive mathematical operations for security
purposes. When the network reaches a hash rate of 10
Th/s, this means it could make 10 trillion calculations
per second.
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Mining Bitcoin mining is the process of making computer
hardware do mathematical calculations for the Bitcoin
network to confirm transactions and increase security.
As a reward for their services, Bitcoin miners can collect
transaction fees for the transactions they confirm, along
with newly created bitcoins. Mining is a specialized and
competitive market where the rewards are divided up
according to how much calculation is done. Not all
Bitcoin users do Bitcoin mining, and it is not an easy
way to make money.
P2P Peer-to-peer refers to systems that function in a manner
akin to an organized collective by allowing each
individual to interact directly with other individuals. In the
case of Bitcoin, the Bitcoin network is built in such a
way that each user is broadcasting bitcoin transactions
of other users. Moreover, importantly, no bank, for
similar centralized institution, is required as a third party.
Private Key A private key is a secret piece of data that proves a
given user’s right to spend bitcoins from a specific wallet
through a cryptographic signature. The given user’s
private key(s) are stored in the given user’s computer, if
the given user employs a software wallet; they are
stored on some remote servers if the given user uses a
web wallet. Private keys must never be revealed to third
parties, as they allow users to spend bitcoins for their
respective Bitcoin wallets.
Signature A cryptographic signature is a mathematical mechanism
that allows someone to prove ownership. In the case of
22
Bitcoin, a Bitcoin wallet and its private key(s) are linked
by some mathematical relationship. When a given
user’s Bitcoin software signs a transaction with an
appropriate private key, the whole Bitcoin network is
able to detect that the signature matches the bitcoins
being spent. However, it is very difficult for third parties
to guess a given user’s private key to steal the given
user’s hard-earned bitcoins.
Wallet A Bitcoin wallet is loosely an equivalent of a physical
wallet on the Bitcoin network. The wallet actually
contains an associated user’s private key(s) which allow
the user to spend the bitcoins allocated to it in the block
chain. Each Bitcoin wallet can show the user the total
balance of all bitcoins it controls and lets the user pay a
specific amount to a specific person, in a manner akin to
a real physical wallet. This is different to credit cards
where users of the credit cards are charged by one or
more merchants with whom they are transacting.
[0058] Referring to FIG. 1, there is shown an illustration of a highlevel
architecture representing a manner of Bitcoin system operation. In
the architecture, a first user is associated with a user terminal 100;
optionally, the user terminal 100 is implemented via use of portable
computing hardware, for example a smart phone, a laptop computer, a
tablet computer. For example, the tablet computer is a proprietary iPad,
but not limited thereto; “iPad” is a trademark of Apple Corp. The first user
is desirous, for example, to transfer 1.2 bitcoins 104 to a second user with
a user terminal 102. The user terminal 102 has a QR-code 106 presented
in a graphical screen, wherein the QR-code 106 indicates a destination
23
address, namely a Bitcoin address, of the payment of the 1.2 bitcoins; the
destination address is, in practice, the second user’s Bitcoin account
details. Before implementing the transfer of 1.2 bitcoins, the first and
second users of the terminals 100, 102 respectively, have set up their
associated Bitcoin wallets.
[0059] The user terminal 100 submits the bitcoin transfer to a peerto-
peer (P2P) network consisting of a plurality of computers 110;
optionally, the plurality of computers 110 is implemented using at least one
of: laptop computers, desktop computers, servers. Optionally, the plurality
of computers 110 is mutually connected via the Internet, although other
types of communication networks are alternatively or additionally employ
for providing mutual connections.
[0060] As aforementioned, the architecture in FIG. 1 implements a
Bitcoin system, which is based upon a block chain. The block chain is a
shared public ledger upon which an entire network of the Bitcoin system
relies. All confirmed bitcoin transactions are included in the block chain. By
employing such an approach, spendable balances for Bitcoin wallets can
be calculated, and new bitcoin transactions can be verified to be spending
bitcoins that are actually owned by a given spender, namely spending
user. The integrity and a chronological order of the block chain are
enforced by employing cryptographic methods.
[0061] During a transaction pertaining to the 1.2 bitcoins 104, a
transfer of value between Bitcoin wallets, from the first user 100 to the
second user 102, is included, namely recorded, in the blockchain. Bitcoin
wallets keep a secret piece of data referred to as a private key or seed,
which is used to sign bitcoin transactions, providing a mathematical proof
that they have come from an owner of a given wallet. The signature also
prevents the bitcoin transaction from being altered by any third party users
once it has been issued. All bitcoin transactions are broadcast between
users via the network consisting of the plurality of computers 110, and the
24
bitcoin transactions usually begin to be confirmed by the network in a
following 10 minutes after implementing the bitcoin transaction, through a
process referred as “mining”, as elucidated in the foregoing.
[0062] Mining is a distributed consensus system that is used to
confirm waiting bitcoin transactions by including them in the block chain.
Such mining enforces a chronological order in the block chain, protects the
neutrality of the network, and allows different computers to agree on the
state of the Bitcoin system. To be confirmed, bitcoin transactions must be
packed in a block that conforms to very strict cryptographic rules that are
verified by the network. These rules prevent previous blocks from being
modified, because doing so would invalidate all following blocks. Mining
also creates an equivalent of a competitive lottery that prevents any
individual user from easily adding new blocks consecutively in the block
chain. This way, no individual users can control what is included in the
block chain, or replace parts of the block chain, to roll back their own
spends.
[0063] In FIG. 2, there is shown an example user interface of a
Bitcoin application executed upon computing hardware in a mobile
terminal, for example a smart phone. A user interface (UI) 200 is operable
to present an example of whom to send bitcoins. The UI 200 includes a
field 208 which is used to enter a bitcoin address of the bitcoin receiving
user, and includes a field 210 which is employed to enter in an amount of
bitcoins to be paid. A user interface (UI) 202 provides an example user
application which is employed to request for Bitcoin payments. A field 206
is employed to show requested bitcoin amounts, and a field 205 is
employed to input an address of the requester’s bitcoin wallet. Moreover,
the Bitcoin application optionally has a QR-code 204, which is optionally
read by a given spending user to get bitcoin addresses and other
information in a convenient manner.
25
[0064] In FIG. 3, there is shown a payment flow chart according to
embodiments of the present disclosure. In respect of the flow chart, a user
has a mobile terminal 300, for example an Internet-enabled smart phone
or tablet computer. The mobile terminal 300 has a radio frequency
identification (RFID) tag either embedded into, or attached to, the mobile
terminal 300, for example by way of a sticker. The RFID tag is optionally
spatially separate from the mobile terminal 300. The flow chart as
illustrated in FIG. 3 relates to the mobile terminal 300 and the RFID tag as
single unitary entity.
[0065] In a step S3.0 of the flow chart, a user touches with the
mobile terminal 300, for example via near-field communication, a payment
terminal 302 at a point of sales. The payment terminal 302 also has a
RFID reader associated therewith. However, it will be appreciated that
other types of near-field communication are optionally alternatively, or
additionally, employed for communicating directly between the mobile
telephone 300 and the payment terminal 302, for example near-field
optical communications and/or near-field acoustic communication (for
example ultrasonic communication).
[0066] In a step S3.1 of the flow chart, the payment terminal 302
sends a communication to a payment server system 310. The payment
server system 310 is optionally a single server, multiple servers, a cloud
computing facility, and so forth. The communication includes a base
identification (Base ID) associated with the mobile terminal 300. The Base
ID is optionally, for example, a telephone number or other ID, such as a
passport number, a social security number, a random number, and so
forth. Moreover, the Base ID is also associated with the user, and a virtual
machine of the user.
[0067] In a step S3.2 of the flow chart, the payment server system
310 sends a broadcast, or other communication message, to all, or some
of, virtual machines (VM) 320, 322, 324 in the Bitcoin system. The virtual
26
machines 320, 322, 324 can refer to Linux containers running in arbitrary
locations and systems in the World Wide Web (www) or Internet, for
example. Optionally, the virtual machines 320, 322, 324 (VM’s) are hosted
in a cloud service, wherein the cloud service is susceptible to being
implemented, for example, using home computers, in mobile terminals, in
desk top computers, and so forth.
[0068] In a step S3.3, a virtual machine (VM), with which the Base
ID is associated, sends an acknowledgement “ack” to the request back to
payment service system 310. The payment service system 310 then sends
a confirmation that the mobile terminal 300 is in the system and bitcoin
payment is pending approval from the user.
[0069] In a step S3.5, the virtual machine 320 sends a request to
the payment service server, or other infra such as a carrier infra related
store and forward network nodes (SMSC’e and so forth), to send a
message to the mobile terminal 300. In one embodiment, the message is
sent using a USSD channel of mobile communication, due to its robust
nature. Alternatively, the message can be sent using a short messaging
service (SMS) or over Internet Protocol (IP) connectivity. In some
embodiments, push notifications such as an Apple push notification
service can be used to send the message to the mobile terminal 300.
Information content of the message concerns the user being invited to
enter his or her PIN code via the mobile telephone 300.
[0070] USSD is an abbreviation for “Unstructured Supplementary
Service Data” and concerns a protocol used by GSM cellular telephones,
namely mobile telephones, to communicate with service providers’
computers. Moreover, USSD is a gateway or channel which is a collection
of hardware and software required to connect mutually two or more
disparate networks, including performing protocol conversion. USSD
gateways or channels maintain a single interactive session once a given
27
connection is established; such a single interactive session is potentially
secure and difficult for unauthorized third parties to eavesdrop.
[0071] In a step S3.6, the PIN code is communicated to the virtual
machine 320, beneficially over a secure channel such as USSD, as
aforementioned. The PIN code is used in the virtual machine 320 to initiate
Bitcoin payment related steps. The PIN code is used to open a vault in the
virtual machine 320. The vault has private keys of the user of the mobile
terminal 300. The private keys are used to make the Bitcoin payment to
the address communicated by the payment server 310 to the virtual
machine, as requested earlier by the payment terminal 302. The payment
address is, in practice, a Bitcoin address of the wallet of a merchant
having the payment terminal 302.
[0072] In a step S3.7, the Bitcoin transaction is executed in a
normal manner, as described in the foregoing. In the example, the bitcoin
wallet of the merchant is running in a virtual machine 324. The virtual
machine 324 is configured to send, in a step S3.8, a confirmation to the
merchant terminal 302 when the bitcoin transaction is confirmed.
[0073] In FIG. 4, there is shown an example regarding a manner in
which to open private keys (PK) in a virtual machine. A PIN code is
received from a mobile terminal 400 in a step S4.0. A computer program
product, namely a software product, 430 executing in a Linux container of
a computer system receives the PIN code and uses the PIN code to
access an encrypted portion 412, namely a vault which is an encrypted
area in non-volatile memory, for example hard disks of the computer
system whereat the PK’s are stored, of a hard disk 410, or other
permanent data memory device. The encrypted portion is decrypted to
random access memory (RAM) 420 of the computer in order to provide the
private keys 422. The private keys 422 are used in a step S4.3 by the
software 430 executing in the computer system. The private keys 422 are
28
used to confirm the Bitcoin transaction. The RAM 420 is then emptied after
using the private keys 422.
[0074] The invention will be further described with the help of two
examples, which show how the present invention can be used.
[0075] Example 1 - Process steps in online stores
[0076] Step 0: When the user creates his MONI account, MONI
automatically creates a MONI ID container for him and saves his private
keys into the container. MONI has daemons on top of the container and
the daemons listen to their respective networks if the public keys are
called.
[0077] Step 1: The MONI user initiates the payment transaction by
entering his payment card number and information to the checkout
process of an online store.
[0078] Step 2: The payment transaction is forwarded through the
payment network (e.g. acquiring bank, processor and issuing bank) to the
daemons which pick up the payment transaction. The issuing bank may
tokenize the payment card number before broadcasting it to the daemons.
[0079] Step 3: MONI sends a verification message via the mobile
network operator of the MONI user to his mobile phone. Verification
message content example: “Authorize the payment to online store XXX for
the amount 100.00 € by entering your PIN.”
[0080] Step 4: The MONI user enters his PIN number on his mobile
phone to authorize the transaction.
[0081] Step 5: The PIN authorization is forwarded by the mobile
network operator to the container.
[0082] Step 6: If the PIN matches, the payment is verified through
the payment network to the online store.
[0083] Example 2 - Process steps in voting
29
[0084] Step 0: When the user creates his MONI account, MONI
automatically creates a container for him and saves his private keys into
the container. MONI has daemons on top of the container and the
daemons listen to their respective networks if the public keys are called.
[0085] Step 1: The MONI user initiates the voting transaction by
entering his vote on a voting machine which may be an online service.
[0086] Step 2: The vote is forwarded to the daemons which pick up
the vote which is to be verified.
[0087] Step 3: MONI sends a verification message via the mobile
network operator of the MONI user to his mobile phone. Verification
message content example: “Authorize your vote by entering your PIN.”
[0088] Step 4: The MONI user enters his PIN number on his mobile
phone to authorize the vote.
[0089] Step 5: The PIN authorization is forwarded by the mobile
network operator to the container and if the PIN matches, the vote is
verified to the voting machine or online voting system.
[0090] It will appreciated that transactions involving the Bitcoin
system and bitcoin payment are provided as an example in the foregoing.
However, embodiments of the present disclosure are not limited to
“bitcoin” type payment methods, and can be used with other types of
cryptocurrencies; embodiments of the present disclosure are optionally
employed for handling other types of transactions, as well as for purposes
of verifying agreements between users.
[0091] Modifications to embodiments of the invention described in
the foregoing are possible without departing from the scope of the
invention as defined by the accompanying claims. Expressions such as
“including”, “comprising”, “incorporating”, “have”, “is” used to describe and
claim the present invention are intended to be construed in a nonexclusive
manner, namely allowing for items, components or elements not
30
explicitly described also to be present. Reference to the singular is also to
be construed to relate to the plural. Numerals included within parentheses
in the accompanying claims are intended to assist understanding of the
claims and should not be construed in any way to limit subject matter
claimed by these claims.

CLAIMS
1. A system for implementing at least one cryptocurrency transaction
at a point-of-sale by using a mobile terminal, wherein the system is
5 operable to provide authentication for implementing the one or more
cryptocurrency transactions, wherein the system is configured:
(a) to send at least one authentication request for the at least one
cryptocurrency transaction from a payment terminal to a payment
service hosted via one or more virtual computing machines,
10 wherein the payment service is operable to provide a request for a
Personal Identification Number code at the mobile terminal;
(b) to send the Personal Identification Number code from the mobile
terminal via a secure channel to open a vault in the one or more
virtual machines, wherein the vault contains one or more private
15 keys which are useable for authenticating the at least one
cryptocurrency transaction; and
(c) to confirm execution of the at least one cryptocurrency transaction
to at least the payment terminal.
20 2. A system as claimed in claim 1, wherein the secure channel is
implemented via at least one secure Unstructured Supplementary Service
Data channel.
3. A system as claimed in claim 1 or 2, wherein the one or more
25 private keys are stored in non-volatile memory of the one or more virtual
computing machines, and are read therefrom to random access memory
for use as an authentication script in a cryptocurrency transaction
32
authentication session for implementing the at least one cryptocurrency
transaction.
4. A system as claimed in any of the preceding claims, wherein the
non-volatile memory is 5 implemented as hard disk memory of the one or
more virtual computing machines.
5. A system as claimed in claim 3 or 4, wherein the one or more
private keys are stored in an encrypted state in the non-volatile memory,
10 and are decrypted using the Personal Identification Number code to
generate the authentication script for use in authenticating the one or more
cryptocurrency transactions.
6. A system as claimed in any of the claims 3-5, wherein the one or
15 more private keys decrypted and read to the random access memory are
deleted therefrom after the at least one cryptocurrency transaction has
been authenticated.
7. A system as claimed in any of the preceding claims, wherein the
20 system is operable to implement the at least one cryptocurrency
transaction using a bitcoin cryptocurrency.
8. A system as claimed in any of the preceding claims, wherein the
payment terminal and the mobile telephone are provided with a near-field
25 communication arrangement for mutually communicating via the near-field
communication arrangement, when initiating the at least one
cryptocurrency transaction.
33
9. A system as claimed in claim 8, wherein the near-field
communication arrangement is implemented using a radio frequency
identification apparatus associated with the payment terminal and the
mobile terminal.
5
10. A method of using a system for implementing at least one
cryptocurrency transaction at a point-of-sale by using a mobile terminal,
wherein the system is operable to provide authentication for implementing
the one or more cryptocurrency transactions, wherein the method
10 includes:
(a) sending at least one authentication request for the at least one
cryptocurrency transaction from a payment terminal to a payment
service hosted via one or more virtual computing machines,
wherein the payment service is operable to provide a request for a
15 Personal Identification Number code at the mobile terminal;
(b) sending the PIN code from the mobile terminal via a secure channel
to open a vault in the one or more virtual machines, wherein the
vault contains one or more private keys which are useable for
authenticating the at least one cryptocurrency transaction; and
20 (c) confirming execution of the at least one cryptocurrency transaction
to at least the payment terminal.
11. A method as claimed in claim 10, wherein the method includes
implementing the secure channel via at least one secure Unstructured
25 Supplementary Service Data channel.
12. A method as claimed in claim 10 or 11, wherein the method
includes at least one of the following:
34
- storing the one or more private keys in non-volatile memory of the one or
more virtual computing machines, and reading the one or more private
keys therefrom to random access memory for use as an authentication
script in a cryptocurrency transaction authentication session for
5 implementing the at least one cryptocurrency transaction;
- implementing the non-volatile memory as hard disk memory of the one or
more virtual computing machines;
- storing the one or more private keys in an encrypted state in the nonvolatile
memory, and decrypting the one or more private keys using the
10 Personal Identification Number code to generate the authentication script
for use in authenticating the one or more cryptocurrency transactions;
- deleting the read one or more decrypted private keys from the random
access memory after the at least one cryptocurrency transaction has been
authenticated;
15 - operating the system to implement the at least one cryptocurrency
transaction using a bitcoin cryptocurrency.
13. A method as claimed in any of the claims 10-12, wherein the
method includes providing the payment terminal and the mobile telephone
20 with a near-field communication arrangement for mutually communicating
via the near-field communication arrangement, when initiating the at least
one cryptocurrency transaction.
14. A method as claimed in claim 13, wherein the method includes
25 implementing the near-field communication arrangement using a radio
frequency identification apparatus associated with the payment terminal
and the mobile terminal.
35
15. A computer program products comprising a non-transitory
computer-readable storage medium having computer-readable
instructions stored thereon, the computer-readable instructions being
executable by a computerized device comprising processing hardware to
execute 5 ute a method as claimed in any of the claims 10-14.