PayPal is taking significant steps towards establishing its own blockchain ecosystem by applying for a patent related to a system for buying and transferring non-fungible tokens (NFTs). The application, submitted in March and revealed on September 21, outlines a method for conducting transactions with NFTs both on and off the blockchain.
Although the application is still under review, it details a system in which users can purchase and sell NFTs via a third-party service provider, which is not specifically identified, though Ethereum is referenced in the document. PayPal envisions leveraging the comprehensive potential of NFTs for tokenization, exceeding merely the trade of digital collectibles.
The outlined NFTs can symbolize any distinct piece of digital data tracked using a decentralized blockchain ledger, including digital images, videos, music, collectibles, and digital art, along with deeds to personal property, event tickets, legal documents, and other tangible items.
The proposed system offers versatility, potentially allowing for fractionalized purchases via the distribution of governance tokens which can then be traded. A decentralized autonomous organization related to the service provider could enhance NFT liquidity through a dedicated platform. The NFTs could also generate royalty income. The processing by the service provider might encompass compliance and risk management, and users could hold digital wallets or opt for alternative storage and checkout services provided by a third-party broker.
Off-chain transactions might be conducted within an “omnibus wallet” linked with the service provider, containing both buyer and seller’s wallets, negating the need to register the transfer on the blockchain or pay the associated gas fees for such an on-chain transaction. The system could accept any currency, as noted in the application. This development follows PayPal’s introduction of its own stablecoin, PayPal USD (PYUSD), built on Ethereum, in August.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up