The growing number of blockchain patents may accelerate the suppression of innovation in this technology

Rage Review : The huge potential of blockchain technology to change the future of the banking industry has led many financial institutions to increase their efforts to develop and implement the technology and its applications. However, as more and more mainstream institutions join in, a new problem has emerged in the cryptocurrency industry, that is, many banks and financial institutions continue to declare patents on multiple blockchain solutions, which will greatly inhibit blockchain innovation, causing millions of people to be unable to easily use this technology, and the entire purpose and goal of Bitcoin and blockchain technology will be lost, and the hard work of countless developers and other groups will become meaningless. Today, many companies in the cryptocurrency industry have to be prepared to deal with these challenges and attacks.

Translation: Flora

The increasing number of cryptocurrency patent applications may lead to an early outbreak of patent wars in the blockchain field, inhibiting the innovation of blockchain technology.

Companies attach great importance to patents. The patent right for an important technology will be a great guarantee for the company and bring it unlimited benefits. But at the same time, because others cannot use the patented technology for free, its innovation will be inhibited.

Bitcoin and the technology behind it, blockchain, are both open source technologies that have recently gained traction in the banking and fintech sectors. The huge potential of blockchain to change the future of banking has led many institutions to step up their efforts to develop and implement the technology and its applications.

However, the increasing number of mainstream institutions has also brought another problem to the cryptocurrency industry. Many banks and financial institutions continue to declare patents on multiple blockchain solutions, which have been used by many open source encryption communities. If these institutions plan to obtain patents on these solutions, they will soon declare patents on other encryption platforms such as Bitcoin, which will greatly inhibit the innovation of blockchain and millions of people will not be able to easily use this technology.

Recently, some large companies such as Goldman Sachs, Bank of America, MasterCard, etc. have announced patents on certain breakthrough technologies. If this trend continues, the entire purpose and goal of Bitcoin and blockchain technology will be destroyed. Bitcoin was originally developed as a solution to overcome the impact of centralized financial structures that banks and governments use to serve individuals and businesses. In this system, individuals have little financial freedom. If these institutions begin to control blockchain technology through patents, the hard work of countless developers and other groups will be meaningless.

If this trend continues, the blockchain and cryptocurrency industry will soon be flooded with lawsuits between these companies, and lawyers will start to make ill-gotten gains from them. Countless startups have created the entire blockchain revolution, and they never intended to apply for IP protection because they believed it was for the greater and long-term good. But now, they are forced to file patent applications, not for personal gain, but only to ensure that their work can help achieve a greater goal.

Vitalik Buterin

Ethereum founder Vitalik Buterin said:

“Blockchain software companies will eventually be acquired by existing software giants, and blockchain patents will become part of the current patent war.” Buterin further added: “As with all software patents, in my opinion, the practicality of these patents will only slow down and inhibit innovation in the technology.”

Currently, a few crypto startups, such as Blockstream, have begun to apply for patents on their inventions. But at the same time, they have also created a ledger that provides these patents for free, ensuring further innovation. Similarly, there are plans to create a patent alliance in which different players can exchange patents with each other.

As mainstream companies join the game, the cryptocurrency industry faces more and more challenges. Currently, companies have to prepare for two attacks from banking institutions: one is where they should start to ban users from using Bitcoin; the other is the blockchain patent war. Who will be the winner in the end? The banking industry or the cryptocurrency community? Only time will tell us the answer.