Bitcoin and cryptocurrencies has gained unprecedented media attention since being launched in 2009. Many have debated as to whether or not bitcoin will make into mainstream markets, and many have argued that bitcoin needs to be easily spendable in shops just like fiat currency is. Well Mastercard may be about to enable bitcoin transactions which could bring bitcoin to the mainstream.
Mastercard is one of the global giants in the payment providers industry, currently they enable consumers to purchase good and services through their payment card in any currencies deemed legal tender by the government in each country.
In a recent turn of events, Mastercard won a patent to protect a method that would manage “fractional reserves of blockchain currency.” Meaning Mastercard may be about to enable bitcoin transactions which could potentially new open to be spend in any country globally.
Both Mastercard and Visa were once the preferred deposit methods for gamblers using offshore bookmakers. When US law changed in 2006, payments to these websites became increasingly expensive as processors had to recode transactions. The arrival of Bitcoin offered customers and operators a new way to transact, free from legal duress and excessive fees. Mastercard’s new patent may create a boom to the gambling industry, increasing the number and variety of sportsbook deposit methods. It will also create interesting wrinkle in existing legal policies.
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The document which was published with the U.S. Patent and Trademark Office states that “increased usage” in blockchain currencies is due to consumers who “value anonymity and security.” This may be seen as a disadvantage which is highlighted in the document. However, Mastercard note that there is a need to improve the current industry in terms of processing capabilities and storage.
“While 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,”
One of the current issues with blockchain transactions is the time taken to process each transaction. Due to increased popularity blockchains have become clogged up causing transaction fees to increase and transaction times to increase likewise. As a result both parties involved in a transaction must wait unnecessary amounts of time for bitcoin or other cryptocurrency payments to process. This means merchants must “rely on a payer’s good faith” that a transaction is valid.
Mastercard May Be About To Enable Bitcoin Transactions
It is believed that Mastercard are proposing to hold a reserve of bitcoin which means they could validate transactions in milliseconds, thus enabling faster payments while both security and anonymity. No such products like this currently exist and while it remains to be seen wether or not this would actually improve the bitcoin network or increase usability of bitcoin the market are certainly reacting in a positive way.