Digital Currencies Could Be Built Into Web Browsers in a Few Years

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A group of technology companies is working to build digital currencies into Web browsers, a move that could help payment methods such as Bitcoin thrive.

Manu Sporny, founder and CEO of Digital Bazaar, chairs the Web payments group at the World Wide Web Consortium (W3C), a group that counts Apple, Facebook and Google among its members. The W3C is working on a currency agnostic payment protocol for the Web, called PaySwarm, which could support digital-currency integration within Web browsers.

"Just like email is built into the Web and you don't have to think about it…Bitcoin kind of has that," Sporny says in an interview.

PaySwarm would allow for quick, easy, decentralized transfer of funds over the Web without fees, plus the protocol would open up financial services to those without access to banks, he says. Creating a standard for this type of protocol would take about four years and would ideally need the backing of large technology players, Sporny says.

Getting the go-ahead from tech companies is "going to happen by the end of the year," he predicts. The W3C is holding a technical conference for the 392 member companies in November to get support for a Web payments official working group. The working group would not be created until February 2014 after a W3C-sponsored workshop in Paris.

Some companies are separately experimenting with ways to combine payments into browser-based services. Google lets users send funds as Gmail attachments and offers a Chrome Wallet app for payments in its Chrome browser. Square is testing a person-to-person payment method, Square Cash, that lets users send funds by copying Square on emails sent to the intended recipient.

Another way to get Bitcoin on the Web is with a payments application programming interface, like the one currently being integrated with Mozilla Firefox OS, an operating system designed for mobile phones and other devices.

Any type of payment protocol for the Web would have to be decentralized, Sporny says. "Centralization is bad…for the ability to create really groundbreaking new technologies," he says. There will be no royalties or fees for using the technology.

"Bitcoin is a perfect example of something decentralized being really revolutionary," Sporny says. "You want the technology itself to be decentralized allowing anyone to jump in and compete…and innovate on the network."

This isn't the case in the current financial system, he says, although "there's a lot of interest from the banking world to update their infrastructures."

Banks want to provide more bank accounts and lower their fees, and the Web payment protocol could save banks millions in technology costs, he says.

There's no reason transferring money should take as long as it does today with traditional methods, he says.

With just 1.6 million Bitcoin addresses with stored funds today, compared to at least 78.9 million bank accounts in the U.S., it's clear the digital currency still has lots of room to grow, says Sporny.

But before banks, large technology players and consumers start buying into Bitcoin there are several features that need to be created or enhanced within the ecosystem, Sporny says. For example, currently if a user loses a Bitcoin's wallet keys, there is no way to replace them. And Bitcoin transactions should provide electronic receipts for tax filing purposes, he says.

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Technology Disruptors Digital banking Online payments Mobile payments