Mastercard Patent Filing Outlines Way to Anonymize Crypto Transactions

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.

The transaction data is then stored, while a new transaction and digital signature are generated using a private key.

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.

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."

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.

"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."

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.

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