Visa has ideas for letting you pay bills automatically from your bitcoin wallet.
According to payments giant Visa, cryptocurrency users may someday be able to automatically pay their phone and utility bills using their self-custodial crypto wallets.
Visa's thought leadership team on cryptocurrencies put forth a solution in a blog post on December 20 that would let providers automatically "draw" money from customers' Ethereum-powered crypto wallets without requiring the user to personally approve each transaction.
In the traditional banking industry, auto-payments for recurrent bills are typical. Users can authorize specific service providers to withdraw money from their preferred bank accounts to pay bills, such a Netflix subscription or a periodic phone bill.
According to Visa, such a system is not feasible for owners of self-custodial wallets since automatic programmable payments that periodically withdraw money from a user's account "need engineering work."
This is due to the fact that, with self-custodial wallets, only the user has access to the private keys, necessitating their manual approval of all transactions because "a smart contract cannot initiate transactions on its own."
In its technical article, Visa stated that a new kind of self-custodial wallet called "delegable accounts," which is based on the "Account Abstraction" (AA) idea, would allow automatic recurring payments in cryptocurrency.
The idea was proposed by Ethereum co-founder Vitalik Butering in 2015. It essentially enables the combination of smart contracts and Ethereum-based wallets into a single account, among other use cases.
The Visa team claims that user accounts will "work like smart contracts" through an AA-based self-custody wallet or delegable account, meaning that customers may schedule transactions without signing off to initiate each one individually.
In accordance with the post, "This application might enable a user to construct a programmable payment instruction that can transmit funds automatically from one self-custodial wallet account to another at repeated intervals, without requiring the user's active participation each time."
The suggestion is a part of a larger investigation by the blockchain-friendly company exploring fresh opportunities for blockchain innovation and a way to get beyond strict constraints hardcoded into Ethereum transactions.
The development team does acknowledge that, despite the ease with which auto-payments can be linked into wallets hosted by third parties, like as exchanges, users must still have faith that these organizations would properly manage their assets.
This was shown to be a significant concern this year, particularly in light of the failures of FTX, Voyager, BlockFi, and Celsius, to name a few.
The article also makes note of the fact that AA has been included in a number of Ethereum Improvement Proposals over the years, but has eventually fallen through owing to implementation difficulties. This is because it necessitates several protocol adjustments and the fulfillment of "security guarantees."
The Visa team claimed that, because the network enables AA, it has already successfully tested its delegable accounts on a private chain from layer 2 scaling solution StarkNet.
Since the Visa team was able to integrate delegable accounts into StarkNets' "account model," the piece concludes that auto payments are not far off.
Article Credit: Cointelegraph
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