MasterCard Wins Blockchain Patent For a Private Transaction System
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.
According to Mastercard, the transparent nature of ordinary blockchain transactions is an obstacle to the adoption of this technology in daily payments. This is true to some extent, both for businesses and consumers.
For example, suppose an individual wants to buy a gift for a loved one without the recipient being informed of the details of the transaction. As a result, most traditional companies would not be very willing to provide their competitors and other third parties with real-time data, such as transaction volumes. For these cases, a technical solution is required whereby an entity can participate in a transaction in which the details of the transaction are publicly disclosed to ensure accountability and trust in the 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 patent application does state that the hashes will be made publicly available, which ordinarily would prevent changes to the ledger, but the patent application also states that “the hash values may change with each transaction, to ensure that the transaction volume for an entity may not be identified and to further prevent efforts to identify an entity involved in a transaction.”
This being the case, it is unclear what function the publication of hashes would serve, or how the immutability of the ledger could be guaranteed.
In the past, Mastercard has explored blockchain technology with a scrutinizing eye. In October 2017, the company announced its blockchain-based payment system, which also refrains from using a cryptocurrency.
Justin Pinkham, senior vice president of Mastercard Labs, explained the company’s decision
“We are not using a cryptocurrency, and we are not introducing a new cryptocurrency, because that introduces other challenges – regulatory, legal challenges.”
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