Mastercard has submitted a new patent application centered on concealing activity within blockchain networks. The filing outlines a framework for moving funds across a blockchain in ways that mask b
Mastercard has submitted a new patent application centered on concealing activity within blockchain networks. The filing outlines a framework for moving funds across a blockchain in ways that mask both the source and intended recipient, thereby shielding the personal details and addresses of the transacting parties.
The issue being tackled relates to blockchain's core characteristic: it functions as an unalterable historical ledger. Every transaction written to a blockchain remains permanently visible and can be followed backward through the entire chain, allowing anyone to gather together and examine all transactions connected to a particular wallet. This transparency presents potential privacy concerns. As blockchain data builds up and gets analyzed over time, observers may be able to determine who controls certain addresses, or at the very least extract revealing information about those individuals—geographic data, behavioral patterns, what they purchase, how they spend, and similar personal details.
According to the application: "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 patent describes using intermediate addresses to scramble transaction paths, creating a situation where any given user appears to only exchange funds with a restricted group of addresses that themselves conduct substantial transaction volume with many different counterparties. This obscuring effect makes the underlying data difficult to parse meaningfully. In addition, the actual transaction amounts can be concealed through a process of breaking up transfers across multiple intermediate addresses, compounding the anonymity benefits.
This mirrors existing approaches already utilized by cryptocurrency mixing services and transaction tumblers. Tumblers consolidate various cryptocurrency holdings—including coins of questionable origin or linked to criminal activity—to jumble the transaction history. This protects legitimate user privacy, but also facilitates bad actors in obscuring the origins of illegally-sourced funds.
Security firm CipherTrace, based in California and focused on blockchain analysis, has calculated that roughly US$1.2 billion has gone through cryptocurrency mixing services and coins engineered for privacy like ZCash and Monero.
Mastercard has a track record of developing blockchain and cryptocurrency intellectual property. The organization has won approval for numerous patents this year, encompassing a system for dividing up a blockchain so it can accommodate various transaction types and data schemas, and a method for connecting digital currency assets to traditional fiat currency accounts.
