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MASTERCARD FILES FOR PATENT TO INCREASE ANONYMITY OF BLOCKCHAIN TRANSACTIONS

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American multinational financial service provider company, Mastercard has filed a patent application for a method to add layers to the anonymizing transaction on the blockchain, as per the United States Patent and Trademark Office (USPTO) on December 9.

 

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The application mentions,  “the use of one or more intermediary addresses to obscure the source and destination of funds in a blockchain transaction” can be implemented to “increase anonymity of entities associated with blockchain addresses.” This proposal of technical up gradation would require a series of  “anonymization request[s]” designed to anonymize the transaction itself, rather than just the user associated with any particular wallet.

 

This will “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 proposes, therefore the analysis of the wallet will result in “little to no information” about the user of the wallet.

 

As an example, Mastercard highlights that whereas many “are flocking” to multiple blockchain-based cryptocurrencies, like Bitcoin (BTC) to achieve the highest level of anonymity they offer, “the nature of the blockchain as an immutable ledger is such that every transaction can….be traced and followed back to the genesis black.”

 

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This feature, Mastercard notes “run[s] counter to the primary aim of many users in using a blockchain anonymity.” The data in blockchain once collected and analyzed “eventually reveal the user behind a wallet or at least provide information about them, such as geographic location, interests, spending habits, etc.” Further, the application suggests, “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. This creates a technical problem of competing interests within the technology.”

 

Certainly, Mastercard is not the first company to tackle the limitations of anonymity on blockchain technology, ZCash (ZEC) and Monero (XMR) are both designed keeping in mind this concern.

 

Using Zero-knowledge proofs (ZKP) technology, ZEC authenticates the entries in the distributed ledger, here transaction parties provides the proof of validity, but every other information apart from this remains encrypted, including information on identity. Meanwhile, XMR uses stealth addresses to mask identities by allowing a sender to create a random one-time address which is based on the published address of transaction of receivers.

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