MasterCard patents “anonymous blockchain” technology

[Tomcat]

But the life of cryptocurrency holders will not become easier​

Last week, MasterCard received several patents in the field of blockchain technologies, CNN and other sources report. One of them is called “Method and system for direct anonymous blockchain transactions,” which opens the way for the company to create its own anonymous blockchain for conducting transactions. Applications for patents were filed at the end of 2016, and now they have been finally approved. The text of the application can be found on the website of the US Patent Office. It would seem that this bicycle has already been invented: there are public and anonymous blockchains. Transactions in the same bitcoin or ether can be tracked from the moment the coin is mined to the final recipient, it’s just a matter of identifying the owner of the wallet. If you need anonymity, turn to Monero or a similar cryptocurrency. However, with its patent, MasterCard is trying to sit not even on two chairs, but on the seats of an entire stadium: here is the use of “blockchain technologies”, and “anonymity for the outside world”, and “recording all payer data” and much more.

Wannabi-blockchain​

The patent application states that the main reason for the weak spread of blockchain technology in the classical financial sector is the inability to maintain banking secrecy, that is, the anonymity of transactions. In addition, the patent contains several more “solutions” that suggest that Mastercard is simply following fashion, and is not trying to introduce the use of a decentralized and secure payment system.

In its application, MasterCard proposes to use a third-party server, which will contain a database of all users with all the accompanying information about the nature of the payer (individual or legal entity). When receiving a transaction request, the server will generate two hash values. The first is with the details of the operation. Based on it, a second hash value will be generated, which will contain data about the sender of the payment. It is the second hash that will be sent to the blockchain to complete the operation. Thus, MasterCard offers to confirm the integrity of the transaction, leaving the parties to the transaction anonymous.

In fact, the system will be “anonymous” only for the outside world, as is now happening with ordinary banks. Still, “interested” parties, primarily MasterCard, will have access to the data. Considerable concern is also caused by the “server”, which will generate hashes to be sent to the blockchain, and directly by its security and stability. In general, this whole system raises a lot of questions, but the most popular ones are “Why?” and “Why is blockchain here?”, with the latter being the most pressing.

MasterCard and cryptocurrencies​

Over the past few months, MasterCard has increased its activity in terms of blockchain development. There have already been statements online that the payment system is using block technology to combat carders, improve security, and so on.

At the same time, MasterCard actively fought and is fighting the spread of cryptocurrencies . MasterCard’s hysteria on the dangers of cryptocurrencies began back in 2015, when one of its reports for investors recognized Bitcoin as the most dangerous competitor to the payment system. Around the same time, MasterCard began to take active steps to “drown” cryptocurrencies as a means of payment.

The strongest blow was dealt through a ban on the direct purchase of cryptocurrencies using plastic cards to a number of large banks, and for all others a system of special mcc payment recognition codes was introduced (to increase the commission for the transaction). This decision resulted in errors and double debits from the balance for users.

The company's CEO, Ajay Banga, openly called cryptocurrencies a tool of crime in an interview with the Economic Times:

Today Bitcoin will be enough for me to buy one bottle of water, tomorrow - two, and the day after tomorrow - 9000. But it doesn’t work that way. Any currency must be stable and transparent, otherwise the entire world of crime will begin to use it. Why do ransomware authors demand ransom in bitcoins? Why is China putting pressure on the cryptocurrency market?

Then why all this movement?​

At the same time, the company “sinks” with one hand and “builds” with the other. The vulnerability of centralized systems compared to peer-to-peer systems is obvious. Since 2013, MasterCard has been actively developing its own fintech solutions based on blockchain technology, but this is not good for existing cryptocurrencies.

MasterCard has been fighting alternative phenomena to itself and Visa for many decades. In the late 90s and early 00s, a “fashion” swept across the EU and the rest of Europe to create national payment systems that undermined the monopoly position of the “Big Two” represented by MasterCard and Visa. Now the main threat comes not from national governments, which have accepted the current rules of the game and are no longer trying to fight globalization, but from the cryptocurrency segment. If only because cryptocurrencies do not have a country of jurisdiction and are not limited by anything other than the need to access the network.

Thus, MasterCard is pursuing a very simple goal: to squeeze the maximum out of the blockchain by creating an alternative, company-controlled peer-to-peer ecosystem, all the key nodes of which will be in the hands of MasterCard, that is, maintaining its own monopoly position in the market. This bet is quite successful, since the company will be able to enlist the support of politicians and central banks. The company's board clearly understands that although plastic cards are now the main final instrument for making payments, there are already a lot of alternatives and the company is incurring constant losses due to “shortfalls” in commissions. Therefore, under the wing of MasterCard, more than 30 different “pocket” blockchain projects are being developed that have nothing in common with the crypto industry except peer-to-peer.