On Oct 30, Financial institution of The usa (BofA) added nonetheless yet another cryptocurrency-similar patent to its assortment of much more than 50 applications submitted inside the identical subject.
The 2nd-premier bank in the US has been primary in the informal blockchain patent race, sidestepping these kinds of players as IBM and Alibaba. Nonetheless, that does not suggest that BofA is staying bullish — the firm has been publicly criticizing cryptocurrencies, relying on patents primarily to look progressive in the fintech neighborhood.
Brief background of BofA’s filing crypto-linked patents
The lender filed its to start with blockchain-linked patent back again in March 2014, and it was posted by the U.S. Patent and Trademark Workplace (USPTO) — the company that awards copyrights on inventions in the state — in September 2015. Dubbed “Wire Transfers Using Cryptocurrency,” it didn’t point out the phrase “blockchain” per se, but explained a system in which money are sent concerning accounts applying cryptocurrencies’ fundamental engineering.
It appeared to be the 1st crypto-connected software from a key retail lender in the U.S., and probably throughout the world. It does not seem to be especially shocking that BofA was the very first among the its type to assert these kinds of a patent, offered that it was also just one of the 1st financial institutions to initiate coverage of Bitcoin in 2013, when it posted a report compiled by strategists David Woo, Ian Gordon and Vadim Iaralov. Entitled “Bitcoin: a initially assessment,” the paper argued:
“Bitcoin could become a significant suggests of payment for e-commerce and might emerge as a critical competitor to traditional income-transfer providers. As a medium of exchange, Bitcoin has obvious probable for growth.”
In September 2015, the similar month BofA was awarded with a crypto-linked patent, the financial establishment joined R3, a consortium of over 200 users, which include many banking institutions, trade associations, and fintech companies, who operate to acquiring blockchain methods.
So, starting up with the “Wire Transfers Utilizing Cryptocurrency” entry, blockchain-oriented patents have been piling up for BofA. In December 2015, the USPTO posted 10 new entries submitted by the bank in July 2014, all of which mentioned the phrase “cryptocurrency” in the title, and referred to numerous devices, these kinds of as “Offline Vault Storage Technique,” “Online Vault Storage Method,” and so on.
The next month, in January 2016, the financial institution unveiled it was preparing to send 20 additional blockchain-oriented patent purposes to the USPTO business. In an job interview with CNBC, Chief operations and technologies officer at BofA, Catherine Bessant stated:
“As a technologist, the technological know-how is fascinating. We have tried to keep on the forefront. I feel we have someplace all around 15 patents, most individuals would be surprised at Financial institution of The usa with patents in the blockchain or cryptocurrency area.”
At some point, BofA secured the initial put in an unofficial patent race — by June 2018, the establishment held all around 45 stay patents (indicating that they are active and have not expired), the greatest total among all businesses, in accordance to research from Marc Kaufman, an legal professional co-chairing the Blockchain Mental Property Council at the U.S. Chamber of Digital Commerce. The U.S. bank bypassed these types of technologies-oriented players as IBM and Alibaba, not to point out its immediate competitors — Royal Bank of Canada (RBoC) was the next amongst all financial institutions, keeping only 8 patents.
‘Important to reserve our spot’: BofA’s complicated romance with crypto-technological innovation
BofA’s endeavours in the blockchain domain do not always indicate that the organization will acquire real merchandise. Nor does it necessarily mean that the company is currently being bullish in regards to all points crypto. Pretty oppositely, the U.S. lender has evidently prioritized having a registered know-how over really utilizing it.
In 2016, Catherine Bessant instructed CNBC that possessing blockchain-associated patents is “very crucial […] to reserve our location even right before we know what the commercial application might be.” On the CB Insights, Long run of Fintech celebration, in New York in June of this calendar year, she reterieted that comment:
“We’ve got beneath 50 patents in the blockchain/dispersed ledger house […] Though we’ve not observed significant-scale prospects, we want to be forward of it, we want to be organized.”
Notably, individuals endeavors didn’t reduce the 113-year-previous bank from calling Bitcoin “troubling” and uplifting its decision to ban buyers from getting crypto with their credit rating cards. Additionally, in its yearly report released in February, BofA admitted that cryptocurrencies are a menace to its enterprise design, stating:
“Clients may possibly decide on to carry out company with other marketplace individuals who engage in company or offer products and solutions in areas we deem speculative or dangerous, these as cryptocurrencies.”
In August 2018, Michael Wuehler, a blockchain expert at ConsenSys, who previously labored at BofA for a lot more than 11 a long time, as for every his LinkedIn profile, took to Twitter to announce that even though his title is shown on “8 of 50” BofA blockchain patents as an inventor, they are “meaningless” from his perspective. Wuehler argued that the patents were submitted to bring in push protection and make the financial institution appear progressive in the fintech house.
In truth, acquiring a fintech patent does not automatically imply it will be used in the upcoming. A blockchain patent, like any other patent, is a set of unique rights issued by an official authority — a sovereign state or intergovernmental group — that an inventor or assignee gets in trade for revealing their creation to the general public.
As Bloomberg explains, company-clever blockchain patents “are an necessary component for businesses on the lookout to reshape the economical solutions sector or spawn rewarding cryptocurrency-linked enterprises.” Fundamentally, patents enable providers draw in expense, protect residence rights and gather monopoly gains from other companies employing their inventions — and that could be the circumstance with BofA.
BofA’s most current patent filings: from non-public keys storage to cryptocurrency trade method
Here are some facts of BofA’s blockchain efforts posted by the USPTO inside of the past calendar year. That must give a clearer image of how the bank ideas on making use of the technological know-how, at least hypothetically:
BofA’s most latest cryptocurrency-associated patent award, which was verified on October 30, references storage strategies for non-public keys.
Specifically, the filing reads, existing possibilities for making certain non-public keys stay untampered with are inadequate.
“While numerous […] gadgets may possibly offer for obtaining evidence of a protection breach (i.e., physical or non-bodily tampering with the device and/or the info), this sort of units do not deliver for genuine-time response to this sort of breaches, these that misappropriation of personal cryptography keys is prevented.
“Therefore, a have to have exists for a protected means for storing non-public cryptography keys. The wished-for storage implies should decrease the possibility of misappropriation of keys due to the keys getting saved internally inside of a computing node that is routinely or, in some situations, repeatedly accessible by way of a public communication community, this sort of as the Net.”
Multiple electronic signatures
On September 18, the USPTO shared a BofA patent for adapting several digital signatures in a distributed community.
The patent proposes a method for managing facts communication from internet-linked devices. The document underlines that “the creation offers automated perseverance of which products are speaking to which third-social gathering entities and, in some embodiments, the type of facts currently being communicated to this kind of third-occasion entities.”
BofA’s proposed procedure addresses units inside an Internet of Items (IoT) natural environment, describing how each and every of equipment in the community will connect information with just about every other “on an ongoing foundation,” even though the process would enable a user to “select to prohibit (i.e., block) or limit which knowledge is communicated to which 3rd-occasion entities.”
In July, the USPTO posted the bank’s patent for a blockchain-primarily based technique letting the external validation of facts.
So, BofA’s submitting proposes working with blockchain for tracking useful resource facts and confirming useful resource transfers, arguing that “a will need presently exists for giving a much more exact sign of a user’s economic standing by letting external validation of data in a approach details network.”
The patent describes how the technique would file information on the blockchain based mostly on “aggregated information and facts associated with earlier transfer of assets executed by an entity,” and would update the information and facts on the blockchain with just about every new transaction action.
In April, the bank’s software for a patent on a blockchain-based storage system with automatic details authentication was unveiled. The document was originally filed in Oct 2016.
In the document, the BofA author describes a blockchain-driven process for authenticating details and furnishing secured obtain of mentioned facts to service providers. The patent addresses the issue of data transferring and monitoring, which it says can be resolved by implies of cryptographic keys in a non-public blockchain:
“Embodiments of the invention make use of a private blockchain to retail outlet several kinds of documents to be conveyed to the services providers. In this way, the individual or entity may possibly securely store on the blockchain all documents applicable to services companies, then present the service companies with secured entry to explained records these kinds of that the suppliers might entry only the particular data for which they are licensed, e.g. a health care supplier may obtain only the healthcare documents on the blockchain.”
The writer also outlines negatives of regular solutions of data sharing and holding, this sort of as e-mail attachments, boasting they are delicate to tampering as “they lack a crafted-in mechanism for authenticating records.” A blockchain-based program, in switch, would depict an effective, secure and dependable way to retail outlet documents and only supply access to licensed get-togethers, the patent concludes.
Cryptocurrency trade process
In December 2017, BofA was awarded with a patent that outlines a electronic forex trade method. As for each the document, the system will allow the conversion of 1 digital forex into a further mechanically, with the trade rate to be identified centered on external info feeds.
Beneath the patent software, the proposed program would get info from external information resources on the present-day virtual currency trade premiums and utilize the information to calculate its possess ideal price. Specially, the submitting reads:
“Enterprises may well take care of a substantial variety of economic transactions on a each day basis. As engineering developments, money transactions involving cryptocurrency have develop into extra typical. For some enterprises, it could be appealing to trade currencies and cryptocurrencies.”