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MasterCard, verification and pseudonymy flaws

Mastercard will apply blockchain for verification of payment cards at outlets, this information was published last week on the website of the US Patent Office. The new two-factor method encrypts the image of the card and stores information in the blockchain, using public and private keys. When making a payment, the system receives a request and, with the help of a private key, decrypts the image for subsequent verification. The verification process reduces anonymity, which is presented as an advantage of the blockchain technology, to zero. And this is one of the myths.

Anonymity is rather conditional, or more precisely, pseudonymity. As for the blockchain openness, it is necessary to understand, is it so good. The blockchain is open and everyone sees everything. That is Bitcoin is not at all anonymous.

For example, an attacker demands the ransom and give the wallet. Then everyone understands that the wallet belongs to a bad guy. And since anyone can follow the transactions from this wallet, it will simply not be possible to the fraudster use this coins. For it is worthwhile to reveal the identity somewhere, he will be immediately imprisoned, since almost on all the exchanges it is necessary to pass through identification for exchange coins to fiat money.

Therefore, attackers use the so-called "mixer". Mixer blend dirty money with a lot of clean, and thus "laundered" them.

Undoubtedly, the attacker pays a large commission for this and takes a lot of risks, because the mixer is either anonymous (and can run away with money) or already under the control of someone influential (and can surrender to the authorities).

If you set aside the problems of criminals, then for honest users there is not too much benefit in the blockchain openness. Imagine that user transfer to mama some part of bitcoin.

After that, she knows: first, how much all the money her child has on his wallet - always, at any time, and secondly, his mother knows how much and, most importantly, for what exactly the money from his wallet is spent. What her child bought, what the roulette he played, what kind of policy he supported allegedly "anonymously."

Or otherwise. Return a debt to a friend for lemonade in bitcoins. Now friend as well as mammy knows everything about the financial flows of user. It is so harmless if we look at this situation from the physical person. But what if we look at this from the company or corporation viewpoint?

All counterparties, purchases, sales, customers, the volume of accounts and generally all financial flows become public. This gives competitors unlimited opportunities. Thus, the blockchain openness is, rather, its lack, than an advantage.

After all, if many are ready to open their past financial history for everyone, are they all ready to open it for the future too?

  • June 11, 2018 2:55 PM MSK