MasterCard Acquires CipherTrace

https://www.mastercard.com/news/press/2021/september/mastercard-acquires-ciphertrace-to-enhance-crypto-capabilities/

by cjlm • 5 years ago

134 106 5 years ago

mastercard.com

denton-scratch2• 5 years ago

Title needs editing; crypto != cryptocurrency.

Tenoke• 5 years ago

That's the original title and I'd wager most people read it correctly.

throwdecro3• 5 years ago

I'd wager most people read it correctly.

That's unlikely. Before cryptocurrencies, "crypto" generally meant cryptography. The term "crypto" now refers to cryptocurrencies almost 100% of the time.

Joeboy• 5 years ago

I noted the ambiguity but initially assumed cryptography, based on the name "CipherTrace".

rewtraw• 5 years ago

this is HN where its a race to be as pedantic as possible

rfd4sgmk8u• 5 years ago

Yeah, crypto = hidden.

In this context, crypto = cryptocurrency, because MasterCard is a major fintech company. The context is obvious.

Don't die on the crypto != cryptocurrency hill. Its not worth it. Language is fluid and words represent concepts that change over time. We use contextual information to solidify the concepts.

There is nothing special about cryptography that owns the word. Cryptozoology and Cryptosporidium are also valid candidates for using the short form.

stouset• 5 years ago

The issue is that cryptography and cryptocurrency overlap relevancy in the fintech space. Without specifying which, it’s ambiguous. I say this as an engineer on the security team of a major fintech company who also has a cryptocurrency arm.

It’s fine to call cryptocurrencies “crypto”. It’s less fine to be unnecessarily ambiguous and create confusion when either might be relevant. If not for this discussion, I had assumed the article would be about them acquiring an HSM vendor or someone else in the cryptography space.

Admittedly this is the original title. But it’s an ambiguous and confusing title.

echelon• 5 years ago

I totally misread this and rolled my eyes about MasterCard getting into the cryptocurrency business.

It's to the point where we need to start labeling cryptography as such. Crypto now means cryptocurrency because the crypto folks like to shorten it in every conversation.

baron_harkonnen• 5 years ago

Language is fluid and words represent concepts that change over time.

HN is largely a technical site so using the technically correct language is meaningful. Chemists often joke about that all foods are "organic" foods, but this is a deliberate joke about two technical terms for the word "organic". In both contexts using the correct is important.

Language of course evolves, but it always evolves with this tensions between changing use and consistent use. The argument that one should just lay down and let words mean anything is silly.

We use contextual information to solidify the concepts.

In this context both meanings of the word "crypto" make perfect sense to me. It's quite possible (and imho more interesting) that MasterCard is interesting in having more advanced cryptographic capabilities as it is for MasterCard to expand its use of cryptocurrencies. I would read an article about the former and am not interested in the latter.

denton-scratch2• 5 years ago

Well, I for one thought Mastercard had acquired a cryptography company, so felt let down when I arrived at the article.

I accept that "crypto" nowadays mainly means "cryptocurrency"; and that I will have to learn to sound-out "cryptography" in full.

What I meant, using that terse notation, was that crypto is not identical with cryptocurrency.

defanor• 5 years ago

In this context, crypto = cryptocurrency, because MasterCard is a major fintech company. The context is obvious.

I, for one, was confused while taking the context into account (but having no idea what CipherTrace does): fintech companies, and especially those dealing with bank cards, are among the most common examples of encryption and authentication usage; I think it's even common to say "that's how your bank card transfers are secured" when explaining the usage of asymmetric cryptography to laypeople. Though the possibilities I've imagined were rather silly: e.g., some custom cryptographic hardware, for either efficiency or doing something fancy with quantum cryptography. Upon skimming the article, I'm not sure if the reality is much less silly, but the brief confusion happened either way.

vmoore• 5 years ago

I've grown used to thinking crypto = cryptocurrency. That's the nature of language.

A language (and its people) gets to vote for the use of a word based on the heuristic of popularity. It's something that has been going on for some time now.

jmt_3• 5 years ago

It seems CipherTrace provides security/compliance/etc services similar to that of a traditional bank but for cryptocurrency? Will cryptocurrency effectively end up becoming just another currency/security traded and managed by giant companies rather than flourishing as the decentralized cowboy-esque financial system advocated for by crypto enthusiasts? Even those crypto users who choose to forego services offered by companies such as CipherTrace will still be effected by big companies attempting to regulate and control crypto in various ways, so I'm wondering what the sentiment is in the crypto community regarding this acquisition.

jackson1442• 5 years ago

Will cryptocurrency effectively end up becoming just another currency/security traded and managed by giant companies

Yes, that is exactly their goal. The only way Visa and MC continue to make money with crypto is centralizing and regulating it to death so no one else can enter the field, just like with payment cards today.

jmt_3• 5 years ago

That's what I'm thinking too. Why would Visa invest anything in crypto if they don't think they can reasonably control and benefit off it? Risk assessment is at the very core of Visa's company and I cannot imagine they would invest in something that has unreasonable risk. Crypto is risky and difficult to predict, which makes me think they have a plan to minimize risk by controlling crypto thru means well known to them and traditional banks.

rvz• 5 years ago

I'm afraid you are totally correct. Involving Mastercard and Visa will allow them to put in place a similar fees structure they use for card payments for cryptocurrencies so that they don't miss out on making money with a fee system.

Why do you think they 'embraced' cryptocurrencies all of a sudden and Visa making Coinbase and many others exchanges principle partners to allow them to convert crypto into fiat currency?

ethbr0• 5 years ago

1) Bemoan how people with all the money abuse their surfeit of capital.

2) Create a new currency, and give it to new people.

3) Create a way for the currency to be converted to standard money.

4) Watch as the newly wealthy become the people complained about in (1) and the link created in (3) enables the old wealthy to abuse their capital advantage on the new system.

mistrial9• 5 years ago

there are names for this sequence of statements, in logic, in rhetoric, but I will offer the seasonal ML machine-learning version: underfitting the data

samsquire2• 5 years ago

Bitcoin has a landed wealth aristocracy just like land ownership has. It's not based on merit.

javert7• 5 years ago

As a bitcoin fan, I think that's missing the point.

Bitcoin is about ending US monetary hegemony over the world. That dominance allows the US to grossly abuse its own citizens (future generations in particular) and people around the world (e.g. borrowing and throwing away trillions of dollars on unjust foreign wars).

Bitcoin is about hard money. It's about eliminating the Fed, but it's not about ending banking middlemen like Visa. Those will always exist, but they are "small fry."

jeroenhd2• 5 years ago

I think that was definitely the initial intention of bitcoin when it was launched. Perhaps not specifically to fight off USA influences, but definitely to end government control over the monetary system, be it the dollar, the yen or the euro.

However, I don't think that goal has been relevant for a few years now. Bitcoin has turned into an uncontrolled speculation adventure for people with more money than sense or access to cheap electricity. Just the transaction costs alone make it infeasible to use Bitcoin to order pizza. External payment networks related to but not affiliated with Bitcoin have spun up to battle these transaction costs, but Bitcoin itself is nothing like it was way back when.

I don't think Bitcoin will ever reach its potential as the initial activists thought it had. However, it has cleared the way for other cryptocurrencies to step up and replace it as a payment system for common people.

jmt_3• 5 years ago

But can Bitcoin eliminate the Fed and have any meaningful impact on the US financial system if the big actors of such a system are steadily centralizing and controlling it? How would Bitcoin be able to change anything if its "enemies" are embracing it and applying traditional banking approaches to it? I can't help but wonder if crypto will be the victim of embrace-extend-extinquish schemes.

I'm not sure Visa is small fry. Regular people will want the easiest way to utilize crypto and if they can go through means familiar to them, they probably will. If companies like Visa end up having a hand in the majority of crypto transaction some day then crypto is effectively owned by the system it's trying to fight.

Geee5• 5 years ago

Not really. The idea is to cut all middlemen and controlling entities.

Quote from Satoshi:

"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.

A generation ago, multi-user time-sharing computer systems had a similar problem. Before strong encryption, users had to rely on password protection to secure their files, placing trust in the system administrator to keep their information private. Privacy could always be overridden by the admin based on his judgment call weighing the principle of privacy against other concerns, or at the behest of his superiors. Then strong encryption became available to the masses, and trust was no longer required. Data could be secured in a way that was physically impossible for others to access, no matter for what reason, no matter how good the excuse, no matter what.

It's time we had the same thing for money. With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless. "

Source: http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour...

JumpCrisscross• 5 years ago

borrowing and throwing away trillions of dollars on unjust foreign wars

Because the era preceding fiat currencies was peaceful and devoid of hegemony and global power struggles?

thenewwazoo• 5 years ago

CipherTrace provides KYC/AML and related services for companies and governments who need and want it.

Here's the thing: transactions on the blockchain are anonymous but they're not private. If you're going to do things out in the open, someone's going to watch what you're doing. That doesn't necessarily result in regulation, though it may. It may doesn't necessarily result in incumbents squashing competition, though it may. CipherTrace builds tools, and how they're used is a political question, not a technical one.

Disclosure: I know the CipherTrace folks and did a tiny bit of contracting for them between jobs.

quantumBerry8• 5 years ago

Accurate for BTC, although it's worth noting there are some privacy coins with blockchains that currently have very limited susceptibility to chain analysis, and thus as far as we can tell are private.

abstrct• 5 years ago

This is a pretty smart purchase, with it MasterCard is getting a fairly mature technology stack (by cryptocurrency standards at least), an incredible amount of data (mostly attribution data relating to addresses and transactions), and a team that’s experienced with the industry (which there is a massive void in skilled workers for).

vesinisa• 5 years ago

Press release from Purchase about corporate purchase by the Purchase-based company that makes purchasing easy.

joshlk• 5 years ago

How much is the MasterCard paying? Is that published anywhere?

toomuchtodo• 5 years ago

Not enough to require an 8-K filing, which means the purchase price was so low as to be immaterial.

Forbo• 5 years ago

Welp, looks like this is going to be another avenue by which a major corporation engages in mass surveillance capitalism. I'd rather my financial activity not be constantly monitored, profiled, and sold off for advertising or whatever other purposes.

This is why I hope that privacy coins catch on, but I'm unfortunately quit pessimistic that they will ever see mass adoption. If not for the lack of user will, then for the massive pushback we'll see from corporations and governments.

Trias11• 5 years ago

The friction in crypto adoption happens where crypto needs to be converted to fiat and vice versa.

The more goods and services can change hands without touching fiat - the faster the global evolution away from all kind of government and corp nonsense will happen.

zeruch• 5 years ago

I know quite a few of the CT crew, and they are some sharp folks. Well done.

MasterCard Acquires CipherTrace

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