MasterCard Wins Patent For Blockchain Based Anonymous Transactions

MasterCard, which continues to receive a series of patents for blockchain technology based financial solution, has received a patent for a system that enables anonymous transactions on a blockchain network. The application was filed in December 2016. MasterCard is not comfortable to use blockchain networks for everyday transactions because of the transparency it offers. MasterCard believes that it might lead to problems for both individual and business customers.

The system described by the patent titled “Method and system for anonymous directed blockchain transaction” aims to facilitate anonymous transactions through the use of third-party servers and without the use of cryptocurrencies. However, MasterCard has not specifically stated this in its patent. Furthermore, it can be understood that the law enforcement agencies can trace these anonymous transactions to users, if necessary.

The system makes use of MasterCard’s data base of pre-scanned profiles. Each of these profiles has a unique string of data. Following the receipt of transaction details from an individual or enterprise, the server creates two hash values. The first hash value is created based on the transaction details, while the second is created by combining the first hash with the data string of the transacting party. The hash value is then transmittd to a blockchain or any other distributed ledger to perform the transactions without revealing the user data.

The patent, awarded by the US Patent and Trademark Office (USPTO) states

“Thus, there is a need for a technical solution whereby an entity may participate in a transaction where transaction details may be posted publicly to ensure accountability and trust in the data, while still providing anonymity and inability of others to track individual transactions or volume information by transaction party identifying information of both parties of a transaction to satisfy the confidentiality needs of each entity involved in the transaction.”

The system could find a use in situations where an individual wants to purchase an item without revealing their personal details. Notably, there are already specialized, privacy focused cryptocurrencies readily available in the market. Monero and Zcash are the most popular cryptocurrencies supporting anonymous transactions. In fact, regulatory and secret service agencies in the US and Europe is struggling to track the users of these cryptocurrencies.