Bank of America leads within the blockchain patent race
On October 30, Bank of America (BofA) added one more cryptocurrency-related patent to its assortment of greater than 50 purposes filed throughout the identical subject.
The second-largest financial institution within the US has been main within the casual blockchain patent race, sidestepping such gamers as IBM and Alibaba. However, that doesn’t imply that BofA is being bullish — the corporate has been publicly criticizing cryptocurrencies, counting on patents largely to seem progressive within the fintech group.
Brief historical past of BofA’s submitting crypto-related patents
The financial institution filed its first blockchain-related patent again in March 2014, and it was printed by the U.S. Patent and Trademark Office (USPTO) — the company that awards copyrights on innovations within the nation — in September 2015. Dubbed “Wire Transfers Using Cryptocurrency,” it didn’t point out the phrase “blockchain” per se, however described a system the place funds are despatched between accounts utilizing cryptocurrencies’ underlying know-how.
It gave the impression to be the primary crypto-related software from a significant retail financial institution within the U.S., and probably worldwide. It doesn’t appear significantly shocking that BofA was the primary amongst its variety to say such a patent, provided that it was additionally one of many first banks to provoke protection of Bitcoin in 2013, when it printed a report compiled by strategists David Woo, Ian Gordon and Vadim Iaralov. Entitled “Bitcoin: a primary evaluation,” the paper argued:
“Bitcoin might change into a significant technique of fee for e-commerce and will emerge as a severe competitor to conventional money-transfer suppliers. As a medium of change, Bitcoin has clear potential for progress.”
In September 2015, the identical month BofA was awarded with a crypto-related patent, the monetary establishment joined R3, a consortium of over 200 members, together with varied banks, commerce associations, and fintech corporations, who work in the direction of creating blockchain options.
Thus, beginning with the “Wire Transfers Using Cryptocurrency” entry, blockchain-oriented patents have been piling up for BofA. In December 2015, the USPTO printed ten new entries filed by the financial institution in July 2014, all of which talked about the phrase “cryptocurrency” within the title, and referred to numerous techniques, comparable to “Offline Vault Storage System,” “Online Vault Storage System,” and so forth.
The following month, in January 2016, the financial institution revealed it was getting ready to ship 20 extra blockchain-oriented patent purposes to the USPTO workplace. In an interview with CNBC, Chief operations and know-how officer at BofA, Catherine Bessant mentioned:
“As a technologist, the know-how is fascinating. We have tried to remain on the forefront. I feel we’ve someplace round 15 patents, most individuals can be shocked at Bank of America with patents within the blockchain or cryptocurrency area.”
Eventually, BofA secured the primary place in an unofficial patent race — by June 2018, the establishment held round 45 dwell patents (that means that they’re energetic and haven’t expired), the most important quantity amongst all corporations, based on analysis from Marc Kaufman, an legal professional co-chairing the Blockchain Intellectual Property Council on the U.S. Chamber of Digital Commerce. The U.S. financial institution bypassed such technology-oriented gamers as IBM and Alibaba, to not point out its direct rivals — Royal Bank of Canada (RBoC) was the second amongst all banks, holding solely eight patents.
‘Important to order our spot’: BofA’s sophisticated relationship with crypto-technology
BofA’s efforts within the blockchain area don’t essentially imply that the corporate will develop precise merchandise. Nor does it imply that the corporate is being bullish with reference to all issues crypto. Quite oppositely, the U.S. financial institution has clearly prioritized having a registered know-how over really utilizing it.
In 2016, Catherine Bessant advised CNBC that having blockchain-related patents is “crucial […] to order our spot even earlier than we all know what the industrial software is likely to be.” On the CB Insights, Future of Fintech occasion, in New York in June of this yr, she reterieted that remark:
“We’ve bought beneath 50 patents within the blockchain/distributed ledger area […] While we’ve not discovered large-scale alternatives, we need to be forward of it, we need to be ready.”
Notably, these endeavors didn’t forestall the 113-year-old financial institution from calling Bitcoin “troubling” and uplifting its choice to ban prospects from buying crypto with their bank cards. Moreover, in its annual report printed in February, BofA admitted that cryptocurrencies are a risk to its enterprise mannequin, stating:
“Clients could select to conduct enterprise with different market individuals who have interaction in enterprise or provide merchandise in areas we deem speculative or dangerous, comparable to cryptocurrencies.”
In August 2018, Michael Wuehler, a blockchain specialist at ConsenSys, who beforehand labored at BofA for greater than 11 years, as per his LinkedIn profile, took to Twitter to announce that whereas his title is listed on “eight of 50” BofA blockchain patents as an inventor, they’re “meaningless” from his perspective. Wuehler argued that the patents have been filed to draw press protection and make the financial institution seem progressive within the fintech area.
Indeed, having a fintech patent doesn’t essentially indicate will probably be used sooner or later. A blockchain patent, like another patent, is a set of unique rights issued by an official authority — a sovereign state or intergovernmental group — that an inventor or assignee will get in change for revealing their invention to the general public.
As Bloomberg explains, business-wise blockchain patents “are a vital ingredient for corporations trying to reshape the monetary companies business or spawn worthwhile cryptocurrency-related companies.” Essentially, patents assist corporations entice funding, shield property rights and accumulate monopoly earnings from different corporations utilizing their innovations — and that could possibly be the case with BofA.
BofA’s newest patent filings: from non-public keys storage to cryptocurrency change system
Here are some particulars of BofA’s blockchain efforts printed by the USPTO throughout the previous yr. That ought to present a clearer image of how the financial institution plans on utilizing the know-how, not less than hypothetically:
BofA’s most up-to-date cryptocurrency-related patent award, which was confirmed on October 30, references storage strategies for personal keys.
Specifically, the submitting reads, present alternatives for making certain non-public keys stay untampered with are inadequate.
“While many […] gadgets could present for buying proof of a safety breach (i.e., bodily or non-physical tampering with the gadget and/or the information), such gadgets don’t present for real-time response to such breaches, such that misappropriation of personal cryptography keys is prevented.
“Therefore, a necessity exists for a safe means for storing non-public cryptography keys. The desired storage means ought to cut back the danger of misappropriation of keys as a result of keys being saved internally inside a computing node that’s incessantly or, in some cases, constantly accessible through a public communication community, such because the Internet.”
Multiple digital signatures
On September 18, the USPTO shared a BofA patent for adapting a number of digital signatures in a distributed community.
The patent proposes a system for managing knowledge communication from internet-connected gadgets. The doc underlines that “the invention gives automated dedication of which gadgets are speaking to which third-party entities and, in some embodiments, the kind of knowledge being communicated to such third-party entities.”
BofA’s proposed system addresses gadgets inside an Internet of Things (IoT) surroundings, describing how every of gadgets throughout the community will talk knowledge with one another “on an ongoing foundation,” whereas the system would permit a person to “choose to ban (i.e., block) or restrict which knowledge is communicated to which third-party entities.”
In July, the USPTO printed the financial institution’s patent for a blockchain-based system permitting the exterior validation of knowledge.
Thus, BofA’s submitting proposes utilizing blockchain for monitoring useful resource info and confirming useful resource transfers, arguing that “a necessity at the moment exists for offering a extra correct indication of a person’s monetary standing by permitting exterior validation of knowledge in a course of knowledge community.”
The patent describes how the system would document info on the blockchain primarily based on “aggregated info related to previous switch of sources executed by an entity,” and would replace the data on the blockchain with every new transaction exercise.
In April, the financial institution’s software for a patent on a blockchain-based storage system with automated knowledge authentication was unveiled. The doc was initially filed in October 2016.
In the doc, the BofA writer describes a blockchain-powered system for authenticating knowledge and offering secured entry of mentioned knowledge to service suppliers. The patent addresses the issue of knowledge transferring and monitoring, which it says will be resolved by the use of cryptographic keys in a personal blockchain:
“Embodiments of the invention make the most of a personal blockchain to retailer varied sorts of data to be conveyed to the service suppliers. In this fashion, the person or entity could securely retailer on the blockchain all data related to service suppliers, then present the service suppliers with secured entry to mentioned data such that the suppliers could entry solely the precise data for which they’re approved, e.g. a healthcare supplier could entry solely the healthcare data on the blockchain.”
The writer additionally outlines disadvantages of typical strategies of data sharing and preserving, comparable to e-mail attachments, claiming they’re delicate to tampering as “they lack a built-in mechanism for authenticating data.” A blockchain-based system, in flip, would symbolize an environment friendly, safe and dependable method to retailer data and solely present entry to approved events, the patent concludes.
Cryptocurrency change system
In December 2017, BofA was awarded with a patent that outlines a digital currency change system. As per the doc, the system will permit the conversion of 1 digital currency into one other routinely, with the change charge to be decided primarily based on exterior knowledge feeds.
Under the patent software, the proposed system would collect knowledge from exterior info sources on the present digital forex change charges and make the most of the information to calculate its personal optimum charge. Specifically, the submitting reads:
“Enterprises may handle a large number of financial transactions on a daily basis. As technology advances, financial transactions involving cryptocurrency have become more common. For some enterprises, it may be desirable to exchange currencies and cryptocurrencies.”
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