More security through blockchain: MasterCard applies for a patent

A recently published MasterCard patent application indicates that the credit card giant has turned a blind eye to blockchain applications. The company wants to improve customer data protection with the latest application.

Using a semi-private or private blockchain, MasterCard wants to receive and store users’ identity data. This could include information such as name, address and tax number. This is not MasterCard’s first patent application for the blockchain. Last year, the company filed a patent application that allows payments to be processed more quickly.

The added value of the Bitcoin formula application with MasterCard

Blockchain technology could help avoid fake identities during registration. According to the patent application, the system generates one Bitcoin formula file for each unit, with a public key and the geographical area of responsibility. These child files then receive a digital signature from a parent entity. A server hashing module then generates an identity value for each unit and a block containing the record of the most recent block and a timestamp.

Unlike a public blockchain, the MasterCard network allows only certain nodes to feed data. These authorized nodes prevent the storage of data that affects the accuracy of the stored data.

A concrete use case

MasterCard would thus create a classic blockchain-use case. To put it simply, it must now be ensured that a person’s data is correct and documented only once at MasterCard. Let’s take a look at the classic use case of MasterCard: People usually use it to pay for their purchased goods in the retail trade. In a payment process that has to be faster and faster these days, the verification of the card user is quickly lost. At this point, a signature is just an arbitrarily inaccurate means of verification. A PIN can also be stolen. It should therefore be checked whether the user of the credit card is also the true owner. Using a barcode or magnetic stripe, the cashier could access the MasterCard blockchain and quickly read out owner data such as name, address, date of birth and a photo. This could help avoid the misuse of a credit card.

When shopping online, the process may look like the credit card record must match the ID card record. Here, too, the data can be compared using a barcode on the credit card or ID card.

Why not with the help of a central database?
At this point, one can also ask oneself why it is not possible to store this data in a central database. On the one hand, these are sensitive data which, on top of that, have to be stored forgery-proof. Only a blockchain can offer this protection against forgery. On the other hand, MasterCard is one of those companies that has to think globally in a world that is currently struggling with globalization. Due to political uncertainties, a central server may not be available worldwide.

Denmark: Yippee, no taxes on the Bitcoin secret

After months of delay, Denmark has now announced that the private trade of Bitcoins is exempt from tax.

The tax authority’s decision is based on the fact that Bitcoin is not regarded as “real money”. Thus, any Bitcoin activity (regardless of whether it generates a profit or a loss) is not taxable. Commercial Bitcoin activities are subject to normal income tax and must be booked in the course of business.

At the time of the announcement, Denmark was the only country in the world that definitely considered taxing Bitcoin. The early reactions of the European Bitcoiners were positive, both the further effects of the announcement remain to be seen. If Bitcoins are not “real”, do they still enjoy the protection of private property?

Bulgaria: A Bitcoin secret tax gap?

Let’s take Bulgaria by contrast. The Eastern European country announced this week that trade in Bitcoin secret is subject to income and corporate tax. However, a requirement to document Bitcoin secret profits has not been issued, raising the question of potential money laundering through digital currencies.

Bulgarian enthusiast Stamen Gorchev then proposed joining the other EU members to find a comprehensive regulation.

Bulgaria’s announcement thus means that Bitcoiners will have the full range of possible tax treatment available in Western countries. This means the company will be able to benefit from potentially lucrative transfer pricing.

China: rumours and ban by banks
The Bitcoin isn’t really illegal in China, is it? The rumours about a ban on Dogecoin, Bitcoin and other Altcoins are still going around.

Just like the sharp fall in prices at the end of 2013, the current fall in prices is also attributable to the Chinese authorities and the strong investment volume in China. Possible regulatory measures on the part of the central bank recently led to a drastic drop in the share price.

Although the exact reasons for the alleged ban are unknown, the fungibility of Bitcoin is threatened by capital controls by the communist state.

The network was also known for its resilience to state censorship, which has plagued many Internet users for years.

Colombia: Bitcoin ban?

The Colombian Ministry of Finance could ban Bitcoin in cooperation with the central bank. That’s what a recent El Tiempo report said.

Colombia has joined the list of those who have issued an official warning to their citizens regarding the Bitcoin trade.

The Colombian government is unlikely to object to the novelty of Bitcoin, as the South American country is not known for financial innovations that may have an impact on the economy. Rather, the issue will arise that the Bitcoin can be used for criminal purposes.

Colombian security forces see a danger that the Bitcoin can be used for drug trafficking and for financing communist rebels.

Isle of Man: No licence required
On 26th March the Isle of Man announced that the country’s listing requirements do not apply to trading exchanges.

The Financial Supervision Commission has announced in a written statement that Bitcoin exchanges are neither investment firms nor money transfer companies within the meaning of the law.

The island is a self-governing colony of England and its citizens are English. The island is also known as a tax haven due to its low 0% tax rate.