An application published by the USPTO (the United States Patent and Trademark Office) indicates that financial services provider Mastercard has filed a patent for increasing the anonymity of Blockchain transactions. This will improve the anonymity of transactions conducted on a blockchain.
According to the filing, the use of more than one or one intermediary addresses to obscure the destination and source of money used during a Blockchain transaction can be used to increase anonymity between the entities associated with Blockchain protocols.
Multiple Anonymization Requests
The technical solution proposed by Mastercard would include multiple “anonymization request[s]” created to anonymize the transactions, instead of just the user behind an individual wallet. The solution would ensure that the user will only be showed transferring funds to and funds received from a lesser number of Blockchain addresses involved in very high volume of transactions with multiple users hence rendering such data innocuous.
According to Mastercard, an analysis of the wallet would yield little to no data about the actual user behind an individual wallet.
Every Transaction on the Blockchain Can Be Traced
Mastercard indicates that while many individuals “are moving” to Blockchain-based digital currencies, like Bitcoin (BTC) and others, for the perceived “significantly high level” of anonymity that these networks can provide, “the immutable ledger nature of the Blockchain initiative is built in a way that every transaction can” be ultimately traced and tracked to the genesis block.” This appears weird considering the fact that Blockchain was designed for the purpose of better anonymity.
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This is a fact that Mastercard acknowledges. The financial services provider suggests:
“This is counter to the primary reason why many users are using a blockchain (which is anonymity).” Any data collected from a Blockchain can, after it has been accumulated and analyzed, reveal the user behind any individual wallet or at least provide data about them, including geographic location, spending habits, and interests, to name a few. The filing continues:
“The existing attribution and communications structure in Blockchain technological applications such as Bitcoin need identification of where each transaction is emanating from and terminating, in a bid to maintain the ledger which creates a technical issue of competing interests in the technology.”
Mastercard Isn’t the First Company to Tackle the Anonymity Issue in Blockchain Systems
This isn’t the first time a company has took it upon itself to tackle the problem of anonymity in Blockchain applications. Apart from Mastercard, there are also two high profile privacy-focused digital assets with the same issue. Both networks were designed with the same concerns as Mastercard regarding Blockchain systems. These networks include Zcash (ZEC) and Monero (XMR).
Zcash (ZEC) makes use of the Zero-knowledge proofs (ZKP) technology, which is the alternative algorithm for the authentication of distributed ledger entries. One in which parties involved in a transaction provide proof of validity. However, every other information will remain encrypted, including the user identities. On the other hand Monero (XMR), makes use of stealth addresses to mask the identities of users by activating a sender to set up random one-time addresses that is based on the receiver’s published address from the transaction.
Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.
