Last updated on March 17th, 2015 at 06:24 pm
Bitcoin is only a few months away from getting a merchant-friendly payment system, backed into the official Bitcoin client. The improvement has been expected since July, according to Coindesk, when the core developers announced the introduction of a Bitcoin payment message specification, which recently became a Bitcoin Improvement Proposal (BIP).
After becoming a formal specification at this stage – entitled BIP 70 -, the improvement will soon be here to enhance Bitcoin payments. The good news keeps coming after the core contributor Mike Hearn posted on the BitcoinTalk forum, back in September, that support for BIP 70 and also for two other payment-related BIPs (71 and 72) was being folded into Bitcoin-QT.
This new tool will be extremely important for merchants and customers, improving Bitcoin payments and making them safer and smoother. When a customer pays for a product or service and makes a transaction, the merchant generates a unique payment address associated with that specific order, making it almost impossible to duplicate the address.
Then, the customer copies the address into their own wallet and authorizes the payment in their wallet. At this point, the operation is transmitted to the Bitcoin network to be verified and the customer has to wait for confirmation. Although the process is not that bad, it has a few problems like possible privacy leaks and a lot of inflexibility.
The BIP 70 payment protocol brings a safer and simpler way to do the same thing. It replaces the Bitcoin addresses with human-readable addresses, enabling “payment received” messages to inform the customer. The protocol will also allow refunds, which is a great new feature.
Besides pleasing to the users, the BIP 70 is also being praised by the merchants. So far, the major payment processor BitPay has already agreed to adopt it.