Mastercard just secured a critical patent that could change the fate of altcoins and Bitcoin forever. Tuesday saw the ubiquitous global credit card company win protection for its new process. This will allow them to control “fractional reserves of blockchain currency.”
It gives the credit behemoth the ability to accept cryptocurrencies like Bitcoin, Ethereum, Dogecoin, Ripple, etc. for payment. Presently, Mastercard users are only allowed to pay for transactions utilizing government-backed currencies that are legal tender.
The patent application quoted Mastercard saying blockchain currencies have gained an “increased usage” from consumers that “value anonymity and security.” The document also highlighted the downsides to working with the digital currency. Mastercard claimed that there is a real need to boost the processing and storage abilities for these transactions.
“Blockchain currencies can often provide such safety and security for the payer’s information. Such security may be limited for payees, particularly due to the limitations of the blockchain,” the patent document claimed.
Digital Coin Transactions Need More Processing Time Than Do Traditional Transactions
Ironically, part of the problem for rolling out the technology commercially stems from the tedious processing times for digital coins. Though they are all electronic, digital asset transactions require significantly more time. Blockchain transactions need around ten minutes to process. Traditional payments with fiat currency credit cards process in nanoseconds.
This means merchants and consumers must wait around for a “significant amount of time” for digital payments to process. Otherwise, merchants must “rely on the payer’s good faith that the resources are available,” per the patent document. Because of the blockchain’s anonymity, this creates a significant disadvantage for merchants accepting the cryptocurrency payments.
“Many entities, particularly merchants, retailers, service providers…may be wary of accepting blockchain currency for products…” the doc concluded.
Mastercard will work out the details somehow, as they have a legacy of doing with traditional credit card processing. Only a decade or two ago it required significantly longer processing times for traditional credit cards. Bygone memories of carbon paper swiping machines that made imprints of credit cards for payment processing serve as a reminder.
No products are yet ready for market. This will change once Mastercard discovers how to speed blockchain transactions through instant approvals utilizing fractions of customer cryptocurrencies.
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