Payment processing giant Mastercard recently filed a new patent to enhance the privacy of cryptocurrency transactions. Mastercard filed the patent with the U.S. Patents and Trademark Office on Thursday, December 6th.
The patent application basically talks of making blockchain transactions completely anonymous, right from the point of origin to the final amount transaction. The patent talks about the system using an “intermediate address” while the transaction interacts with the public key.
Upon storing the transaction data, a new transaction and digital signature will be generated using a private key. Later, the new transaction data with the destination address and the payment amount is sent.
The patent filing notes that this method “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.”
One can also hide the payment information using multiple transfers through multiple addresses.
Users Preferring Anonymous Blockchain Transactions
The patent goes to note that users are “flocking to various digital currencies,” while preferring “the anonymity of blockchain transactions.” Mastercard says that “specifically, it is often extremely difficult to identify the user behind a blockchain address.” It means that “an individual can transfer or receive funds utilizing a blockchain while keeping a high level of anonymity.”
The patent says that the public data of several blockchain networks allows for easy scrutiny into it. Furthermore, “the nature of the blockchain as an immutable ledger” makes complete anonymity impossible.
The application concludes saying “there is a need for a technical solution to increase the anonymity of a wallet and the user associated therewith in a blockchain.”
Will It Go Well With the Regulations
Mastercard patent comes just at the time when the U.S. Regulators are issuing red flags to privacy-focused coins and blockchain networks. Last week, Nov. 30, the U.S. Department of Homeland Security released a pre-solicitation notice demanding the development of sophisticated surveillance tools that can help them see the transactions of privacy-focused digital currencies.
The U.S. regulators say that privacy-coin transactions foster the illegal transfer of money making it difficult to nab the culprits.
“While these features are desirable, there is similarly a compelling interest in tracing and understanding transactions and actions on the blockchain of an illegal nature,” the notice reads.
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