Mastercard Patent Filing Outlines Way to Anonymize Crypto Transactions

[PRIBO247]

Payments giant Mastercard claims to have developed a new way
of keeping cryptocurrency transactions private.
According to a patent application published Thursday by the U.S.
Patent and Trademark Office, the payments giant has proposed a
system of conducting transactions over a blockchain which would
obfuscate both the point of origin and the amount being
transacted.

As explained, the system would work by using an intermediate
address during a transaction that interacts with the public key. The
transaction data is then stored, while a new transaction and digital
signature are generated using a private key. The new transaction
data, which would contain the destination address and the
payment amount, would be sent on.

The 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,” the filing states.

The amounts too may also be hidden through the use of multiple
transfers using multiple addresses.
The application goes on to note that blockchain platforms are
being increasingly used to conduct transactions, with users
“flocking to various digital currencies” like bitcoin.

Some users prefer cryptocurrencies “for the anonymity that
blockchain transactions can provide,” Mastercard says, explaining
that “specifically, 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.”

However, most blockchain ledgers are not actually anonymous.
The application explicitly notes that transactions can be traced
due to “the nature of the blockchain as an immutable ledger.”
As a result, it’s possible to identify all of the transactions that are
associated with a specific blockchain wallet using public data.
Ultimately, users may be identified in this way, the patent says,
explaining:

“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.”

“Thus, there is a need for a technical solution to increase the
anonymization of a wallet and the user associated therewith in a
blockchain,” the application concludes.

The patent application echoes comments made by proponents of
privacy-focused cryptocurrencies like monero and zcash, both of
which incorporate features to hide the source or destination for
transactions, as well as the total amount being transferred.
While users may prefer anonymity when conducting transactions,
the prominence of coins like monero and zcash has risen enough
that government agencies like the U.S. Department of Homeland
Security are looking for ways to trace funds sent through the
privacy coins.

The agency published a pre-solicitation document earlier this
week which included a proposal for studying forensic analysis
techniques to track privacy coin transactions.

Source : https://www.coindesk.com/