The use of blockchain technology by large institutional investors and tech companies is an incredibly important step in the maturing of the industry. While blockchain in its beginning days was more than largely dominated by small, revolutionary financial services and information technological startups, the recent few years have been witness to blockchain’s use in a host of unexpected and important sectors.
In particular, the work by some major banks and financial institutions in the traditional fiat economy to integrate blockchain into their changing infrastructures is a surprising but exciting development.
Experts say that adoption by these big corporations could be the first step the eventual mass adoption of cryptocurrencies and the large-scale application of blockchain technology all over the world. When these big companies throw their weight behind evolving technologies, it helps to lend a sense of legitimacy to the crypto space. Legitimacy is something that the community desperately needs, especially with the rampant accusations of manipulation in fraud in this deeply bearish market of 2018.
In a recent major move, the financial service behemoth Mastercard invented their own blockchain system that they believe may make it easier to conduct high-volume B2B, or Business-to-Business, transactions all over the globe. The invention was filed officially for the public just yesterday with the USPTO, or the United States Patent and Trademark Office with three separate patents all titled “Method and System for Recording Point to Point Transaction Processing” which can be seen here:
Outdated Settlement Systems
The patent’s author elaborated to say that current settlement systems need to be updated in order to maximize the efficiency of the ecosystems that they create. This writer outlines that the current systems use “individual payment transactions” as a core part of the settlement process. As an example, he presents that a processed transaction will then go to the bank, where the institution will transfer funds to that transaction to the overall network, at which point the money is then forwarded for that “single transaction” to the bank acquiring the money.
Consequently, the author calls this system “unwieldy” and “unconnected,” saying that it hadn’t been updated in large part since the middle of the 20th century. For B2B business, this presents a significant potential problem. The creator of the patent says that, as more and more payments are being processed individually on the network, this causes a higher amount of strain on its processing power, as well as a marked increase to the number of transfers required per day to simply keep it afloat.
A Potential Solution In Blockchain
Mastercard’s developers stated in the patent that the use of a uniformed payment system run on a digital ledger like the blockchain would help to execute these essential B2B transactions far more efficiently. For one, the blockchain is naturally tamper-proof, which improves security as the system grows and transaction volume continues to increase regularly.
Additionally, the system could operate on a public network of a private one without significant difference either way.
In any case, Mastercard’s embrace of potential blockchain technology could be yet another bullish sign for the technology in a tough climate.