Mastercard has announced a new crypto credential service that aims to simplify peer-to-peer cryptocurrency transfers by replacing addresses with simple aliases.
Announced in a press release on May 29, the service is already live and allows users of participating cryptocurrency exchanges to send and receive digital assets using easy-to-use aliases. It aims to reduce confusion by replacing long, complex alphanumeric blockchain addresses that are difficult to distinguish from one another. The company wrote in a tweet:
Mastercard Crypto Credential has gone live with its first peer-to-peer transactions! This solution not only replaces complex wallet addresses with user-friendly aliases, but also makes sending #blockchain transactions secure, transparent and accessible.
Approach
The Crypto Credential service validates users and assigns them an alias. When a user sends cryptocurrency, the software checks the validity of the alias and ensures protocol compatibility before sending the assets.
If the recipient address is not compatible with the asset being sent, the transaction will not be processed. This prevents loss of funds due to user error, which is common in the cryptocurrency space. Aliases may also protect against address poisoning scams, where attackers trick wallet users into sending coins to a similar address.
As ReadWrite reported earlier this month, a cryptocurrency trader recently fell victim to a sophisticated “address poisoning” scam that resulted in losses of tens of millions of dollars. In this type of scam, fraudsters create fake accounts that mimic the last and first letters of the victim’s address.
Due to confusion and length, it is common to only check the first and last characters of an address before sending assets. When interacting with victims with similar addresses, victims may accidentally send to one of these addresses.
Currently, the Crypto Credential service is available on the following Bitcoin exchanges: Bit2Me, Lirium, and Mercado, but is notably absent from top exchanges such as Binance and Coinbase. The service will soon be launched in Brazil, Chile, France, Guatemala, Mexico, Panama, Paraguay, Peru, Portugal, Spain, Switzerland, and Uruguay, with more European countries to be added in the future. Martin Kopacz, Chief Operating Officer at Lirium, said:
With Mastercard Crypto Credential, we can ensure the traceability of all blockchain transactions with a higher level of compliance, while also providing an exceptional user experience.
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