A patent application published today by the US Patent and Trademark Office shows that US credit card giant Mastercard claims that it has now found a way of keeping cryptocurrency transactions anonymous.
The patent claims that Mastercard’s system can mask both the point of origin and the number of transactions on the blockchain by using an intermediate address which will interact with the public key.
Once the transaction is stored, a whole new transaction and a digital signature are generated using a private key. The data, which includes the destination address and payment total, is then forwarded instead of the original. This method, according to Mastercard’s patent application, “would result in showing the user only transferring funds to and receiving funds from a small number of addresses that are also involved in a significantly large volume of transactions with various other users, thereby rendering the data innocuous.”
Mastercard has admitted that, despite its earlier condemnation of Bitcoin and past criticism of cryptocurrency’s viability as a payment system, the blockchain is increasingly being employed by users “flocking to various digital currencies”. Mastercard has clearly seen a developing market for supporting users who use cryptocurrency “for the anonymity that blockchain transactions can provide”. It adds:
“…it is often extremely difficult to identify the user behind a blockchain address, meaning that an individual can transfer or receive funds utilizing a blockchain while keeping a high level of anonymity.”
But it goes on to note that most blockchain ledgers are not anonymous and that currently transactions can be identified by using public data.
“For instance, such data may, as it is accumulated and analyzed, eventually reveal the user behind a wallet or at least provide information about them… However, the existing communications and attribution structure of blockchain technology such as Bitcoin require identification of where the transactions are emanating and terminating, in order to maintain the ledger.”
Until now, privacy coins like Monero and Zcash have incorporated features to hide their users’ transaction information, but not without gaining attention from the US Department of Homeland Security, which is continually developing new ways on keeping tabs on cryptocurrency transactions in its fight against money laundering.
This new patent offering ID anonymity is one that may not be welcomed by government law enforcement agencies but might encourage crypto users towards Mastercard; clearly the aim of the patent.