Payment giant Mastercard has filed a new patent with the United States Patent and Trademark Office (USPTO) to help make transactions anonymous on the blockchain. The design will use intermediary addresses to disguise the transaction origin and the intended destination of the funds being transacted on the blockchain.
This process of obscuring source and receiver will work to increase anonymity. Rather than obscuring the users behind a wallet address the way most anonymous blockchain transactions operate, Mastercard’s patent describes a method for making the transaction itself anonymous.
“A method for anonymization of a blockchain transaction includes: storing a key pair comprising a private key and public key; receive an anonymization request from a computing device, the request including a destination address and transaction amount; transmitting an intermediate address based on the public key to the computing device; receiving one block in a blockchain, the one block being comprised of a block header and one or more transaction data values including a specific transaction data value comprised of the intermediate address and a transfer amount based on the transaction amount; generating a digital signature using the private key; and transmitting a new transaction data value and the digital signature to a node associated with the blockchain, the new transaction data value being comprised of the destination address and a payment amount related to the transaction amount.”
This results in showing only that the funds were sent and received from addresses also involved in transactions with other users, making the data irrelevant to identity. There would be no information connected to the user in possession of the wallet.
Mastercard sees how much consumers value anonymity, which is a significant reason why Bitcoin became so popular in the first place. The nature of any blockchain is that every single block can eventually be traced back to the genesis block. Mastercard makes it clear that eventually the user attached to a specific wallet could be revealed through a series of specific analysis.
Mastercard’s patent focuses more on transaction anonymity and general identity protection, while still remaining in a way “regulation friendly,” not making a patent and eventual financial service that nefarious characters are drawn to for the purpose of money laundering. It is anonymous on a surface level, but transactions can be traced down to the geographic location for a user in the event of suspicious activity.