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Mastercard Awarded Blockchain Patent

October 16, 2018



Last week Mastercard was granted a patent for a method to partition a blockchain to provide the flexibility to store multiple transaction types and formats. This is a similar concept to “side-chains” or many other systems that act as a secondary layer over multiple blockchains to enable easier interactions between them.


Current blockchain systems maintain transaction records stored in different block formats that are extremely rigid. This is a necessary consequence of maintaining a secure and active blockchain network. Because of this, it’s difficult to engage the benefits of several blockchain networks at once. Further, this consumes much more electricity because of the computing processing power needed.


Subnets For Efficiency


“A subnet may have rules about data in a transaction record, the organization of the data, the size of each data value, and the hashing algorithms used in the formulation of the subnet’s merkle root.”


This type of subnet would be able to receive information from different computing devices and allow to add data of any kind and size without following a standardized data format. In this way the proposed partitions would be internally consistent but able interact in a wider, single system.  However, the amount of subnets is limited in the proposed system to a maximum of three:


“a partitioned blockchain may include transaction records for three different subnets, where the transaction records associated with each respective subnet may be formatted differently and may involve the transfer of a different cryptographic currency as associated with each subnet.”


Why would this be useful?


If a company wants to use blockchain networks that are best fit to store different kinds of data or use multiple cryptocurrencies for their business, a secondary layer like this would be critical to streamlining the process. This could be further complicated by the interactions of public networks vs. enterprise or permissioned networks. Mastercard’s patent highlights this inflexibility in terms of data formatting, where incompatible blocks could cause inadvertent restrictions within a company:


“...where varying levels of permissions may be used for participation in the blockchain, such as by limiting the nodes that may add new blocks to the blockchain. However, because all transactions in a traditional blockchain are formatted similarly, the permissions may not be extended to access to the actual transactions in the blockchain”


One Of Many


Mastercard first applied for the above mentioned patent back in July 2016. The U.S. patent office publishes applications up to 18 months after they are filed, and make the decision to grant a patent or not. Their first blockchain-related patent was approved in November 2017 titled "method and system for instantaneous payment using recorded guarantees". They have become the company with the third most blockchain technology related patents. Mastercard has 80 patent filings with only Alibaba and IBM having applied for more.


In July Mastercard filed a patent for a blockchain based process to link assets between blockchain and fiat currency accounts. In three patent filings from Mastercard last month, it was argued that the distributed ledger technology (DLT) would  significantly streamline B2B transactions:


“21st century B2B collaboration sits on an unwieldy, unconnected and largely unchanged mid-20th century B2B payments platform.”



By: BGN Editorial Staff

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