By Kate Voller
Toward the end of 2017, the value of Bitcoin reached almost $20,000. But within a year, prices had dropped by more than 80 percent, a decline so dramatic it led many to believe the cryptocurrency bubble had finally burst. While its value has continued to fluctuate since then, it has never come close to reaching such dizzying heights. Bitcoin is long past its glory days.
Despite this, the number of applications for patents related to blockchain, the public transaction ledger that underpins cryptocurrencies, have continued to grow. There has been increasing interest from large corporations including Mastercard, IBM and Bank of America, each of which has applied for patents for the use of blockchain in applications such as data storage, smart contracts, and biometric security solutions.
These patent applications can be read as good indicators of investment. After all, the R&D and legal fees involved in filing a patent are not insignificant. There may be a future for blockchain after all, just not one related to cryptocurrency as originally planned.
Blockchain has been “the next big thing” ever since it was introduced more than 10 years ago. However, Gartner, among others, was largely unconvinced. Just last year the analyst house suggested the hype wasn’t justified, and that the technology wasn’t yet sufficient for mission-critical use within the enterprise.
The enterprise world appears to see a potential in blockchain where others do not, though. Regardless of high-profile reservations, the number of patent applications relating to blockchain almost doubled between 2017 and 2018, with most coming from large international corporations.
Blockchain has been “the next big thing” ever since it was introduced more than 10 years ago.
Interestingly, the majority of these applications aren’t related to cryptocurrencies. Indeed, some organisations are even pursuing such applications while warning the public against cryptocurrencies. The Bank of America, for example, even banned its customers from buying cryptocurrencies using its credit cards. As one of the top five global holders of blockchain-related patents, there appears to be a vast gap between the bank’s attitude toward cryptocurrency and its private intentions for the technology that underpins it.
Blockchain is popular with some very big businesses indeed. In addition to the Bank of America, the list of top five international patent holders is made up of IBM, Alibaba, Mastercard and China Union. With so many patent applications being filed by such large corporations, there is a risk that blockchain could be monopolised by a select few – ironic when you consider that the technology was originally praised for its potential to decentralise control away from the banking giants.
There are questions around the motivations of these companies, too. It’s possible, for example, that they are securing these patents with a view to licensing the technology to other companies. Indeed, this could prove highly lucrative should their blockchain application successfully address a market need.
it’s important to track blockchain’s journey from a public tool into corporate hands – it’s a journey that will undoubtedly shape its future.
Alternatively, and perhaps of greater concern for those who see a bright future for blockchain, there is the possibility that these large organisations are filing patents in an effort to stop “disruptors” from developing the technology. Some companies will file several patents and never develop the corresponding products or services, knowing that no-one else can without risking infringement. It’s likely that, as blockchain becomes more popular, so too will this technique.
Following blockchain’s journey
In less than ten years, blockchain has moved from a public technology, with an apparently inseparable relationship with cryptocurrency to being increasingly perceived as an enabler for business. Organisations across a wide range of industries are exploring how it can be applied to specific use cases, many of which are likely to result in the development of innovative new products.
The filing data reveals that the greatest interest in blockchain comes from some of the world’s largest corporations. As yet, their motivation is not entirely clear. It remains to be seen whether these companies genuinely want to pursue innovative applications of the technology, or whether they want to prevent others from doing so, and prevent disruption to their own established business models.
Whatever the motivation behind the current interest, it’s important to track blockchain’s journey from a public tool into corporate hands – it’s a journey that will undoubtedly shape its future.
Kate Voller is a patent attorney at GJE