American payments giant Mastercard has recently filed a new patent for a new way of keeping cryptocurrency transactions private. According to the patent application, Mastercard has proposed a system of carrying out transactions on a blockchain which would hide both the point of origin and the amount being transacted.
How would the proposed system work?
The system will use an intermediate address during the transaction, and that intermediate address will then interact with the public key. The intermediate transaction data will then be stored, after which a new transaction and digital signature will be created by a private key. The new transaction data, which contains the destination address and the payment amount, would be finally sent.
The new 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,” according to the patent.
Use of multiple addresses
The amounts of transactions will also be hidden by sending multiple amounts through multiple addresses. According to Mastercard “ Users prefer the anonymity that blockchain transactions can provide, 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 of the blockchain networks are not really totally anonymous. The patent states that the transactions can ultimately be traced due to blockchain being an immutable ledger. Consequently, most of the transactions can still be identified that are associated with a particular blockchain wallet address using public data.
The patent further explains:
“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.”