Mastercard's New Patent Could Help Bitcoin Gain Mainstream Adoption
Mastercard has filed a new patent for managing fractional reserves of blockchain currency. This will allow them to make crypto payments more secure which in turn will allow them to speed up financial transactions where payments are made on the mastercard network but are charged in cryptocurrency such as Bitcoin.
Mastercard's proposal might help establish Bitcoin as the first cryptocurrency to find mainstream adoption for payments via cards. If they get the go ahead and can show how their idea can work as a concept, they can adopt their existing risk algorithms to reduce or prevent the risk of any fraud in the transaction.
At present, Mastercard holders can only pay for things using currency that the government has declared as legal tender, Seth Eisen, Mastercard's senior vice president for communications, said to CNBC
Blockchain based currency or money is a valid form of transaction. It certainly isn't in most parts of the world but we have precedent in terms of Japan. Because Japan has already made it legal tender.
Mastercard is likely to provide a new account for existing users in markets such as USA where their user can transaction in cryptocurrency such as Bitcoin but pegged to a fiat currency.
As a result, both consumers and merchants have to wait a "significant amount of time" for these digital transactions to go through, or "rely on the payer's good faith" that they are valid, said the document. It added that in the latter instances, the anonymity of the blockchain may leave those accepting payments at a disadvantage.
Many entities, particularly merchants, retailers, service providers, and other purveyors of goods and services, may be wary of accepting blockchain currency for products and participating in blockchain transactions.
However if Mastercard is able to pull of its idea and put it's risk algorithms to work it may be possible to onboard several merchants and retailers to accept blockchain currency for products or services and increase the number of on-chain transactions.
If SBD was truly a pegged asset maybe there would be several adoptable use cases for it by now. Sadly we're not quite there yet.
But, it's incredible how the ecosystem is growing to accept the changes in the financial systems of the world. It's also great to see payments services provider such as Mastercard looking at the revolution in the financial world as a new opportunity rather a threat to their existence.
Currently there is no product from Mastercard that takes this idea and works as a solid proof-of-concept however it's likely that in the days to come we're going to see integration of cryptocurrencies with our banks or banking services at some level.
As a credit card user I would like to try a Bitcoin enabled Mastercard credit card. Wouldn't you?
Mass adoption is a major challenge for any new technology and we're seeing that today with the rise in popularity of cryptocurrencies which is also creating a wave of new scrutiny over it's existence. But these are only minor roadblocks as the market continues to evolve.
More economies are likely to opt for legalising cryptocurrencies and make use of the new opportunities in this space rather than avoid it altogether.
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Nice overview @firepower.
From the research I've done, however, it looks like this patent was filed 3 years ago. Additionally, I think that 2nd-layer solutions, like Lightning Network, will solve the issue that MasterCard was trying to solve.
In the long-run, I think that there will no longer be a need for services like MasterCard. I think this shows how worried they are about maintaining their market dominance moving forward over the next decade.
Thoughts?
That's why mastercard is trying to co-opt the crypto movement , it can see the threat to it's existence.
Spot on @itstime.
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What I am happy about this patent was for that we now have a start. I am talking about a start that has a major mainstream player backing it. Now that they are comfortable with DLT, I think people are starting to see the advantages of the crypto as well.
Perhaps it could be possible that they feel that 'working with' is more profitable than 'working against'. This really wouldn't have anything to do with goodness of their heart and the the Profit has to be the underlying reason.
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This is excellent news, in the end traditional payment systems like VISA and Mastercard have no choice but to join with us in this revolution. I don't think we are as far away from mainstream adoption as people think.
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This is a good news for crypto lovers, including me...By God...
MasterCard can process over 2,000 tps and yet they are interested in blockchain. Send this to anyone who says crypto will always be behind Visa/MasterCard.
Interesting blog!
Following and upvoted.
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