This is achieved by using an intermediary. For example, someone holding bitcoin would not send that directly to another user as they do now.
Instead, they transfer their bitcoin to an intermediary. The intermediary, with the details of the person that the user wants to pay, then generates a new transaction and sends the money on to its final destination.
Anonymity on the blockchain may seem like an oxymoron to many. After all, part of the power and appeal of Bitcoin and other cryptocurrencies is a user’s ability to trade via a public key and not their name.
MasterCard – a settlement provider to the crypto world?
There are merits to that claim but it’s also true that mitigating steps taken by a user could make it next to impossible for someone to figure out who you are.
Perhaps it’s this author’s own technical ineptitude but it would also seem that a deal could be traced by simply looking at how much one user sent to the intermediary and then who the intermediary sent an equivalent amount to.
Anyway, it could be interesting to see whether such a system has potential to be used as a settlement solution. By aggregating a large number of transactions, such an intermediary would likely be able to see who owes who what and reduce the number of transactions that need to be made.