As provided by Coinbase, the following are features that make the Protocol useful:
- Human-readable, secure payment destinations— customers will be asked to authorize payment to a payment processor identified as “example.com” (or “Example, Inc.” if an extended validation certificate is used) instead of an inscrutable, 34-character Bitcoin address.
- Secure proof of payment, which the customer can use in case of a dispute with the merchant.
- Resistance from man-in-the-middle attacks that replace a merchant’s Bitcoin address with an attacker’s address before a transaction is authorized with a hardware wallet.
- Payment received messages, so the customer knows immediately that the merchant has received, and has processed (or is processing) their payment.
- Refund addresses, automatically given to the merchant by the customer’s wallet software, so merchants do not have to contact customers before refunding overpayments or orders that cannot be fulfilled for some reason.
Users looking for the enhanced experience will need to enable the Bitcoin URL handler in the advanced user settings section of Coinbase, whereas merchants will have the feature enabled by default.
A view in action:
Coinbase notes that the above example shows a payment from one Coinbase user to another, though Coinbase’s wallet is compatible with any payment processor that supports BIP: 70.
Back in February, Coinbase competitor BitPay also announced support for the Bitcoin Payment Protocol.