Things Bitcoin Companies Try To Patent

Bitcoin was introduced as a series of white papers, and the person or people who wrote and published these papers never sought claim to this intellectual property in any legal sense. This was likely intentional rather than an oversight. It meant that Bitcoin immediately belonged to the public domain. Had it belonged to someone or even a corporation, the broad appeal and fast acceptance that exists now probably wouldn’t have come to pass or at least not as quickly as it has. Although the currency is in the public domain, that hasn’t stopped Bitcoin companies from seeking to patent various aspects of it.

Companies Have Sought to Patent How Bitcoin Is Processed

Bitcoin is made possible through a massive distributed, peer-to-peer computing network. In many ways, the approach is quite similar to how SETI crunches data from throughout the universe. Although one can’t patent Bitcoin per se, it is feasible to patent how transactions are processed if you’re able to demonstrate significant innovation. A number of companies have attempted this thus far for many reasons but primarily because if a company were able to patent how Bitcoin is processed, they would effectively patent Bitcoin itself. Of course, there’s a lot of moving parts here. The process patented would need to be in widespread usage before that effective ownership became cemented.

From Hashing Algorithms to Security Protocols

Bitmain is an example of a company who attempted this when it sought to patent not only an optimized method for hashing Bitcoin transactions but a proof of concept for a Bitcoin-oriented computer chip. Another company, 21 Inc, sought to patent a method by which many different types of integrated circuits could be used for hashing the virtual currency. Bitgo took a different approach when it sought to patent an enhanced means through which Bitcoin transactions could be secured. Coinbase, a well-known Bitcoin wallet, took an arguably ingenious approach by seeking to patent the means through which people paid others for good and services with Bitcoin via the Web. In none of these cases were the companies able to demonstrate significant innovation over what was already available.

Blockchain Patents Targeting Bitcoin

Blockchain isn’t a Bitcoin-specific concept, but the concept is integral to how Bitcoin works. It’s a database that stores an ever-growing list of records — or blocks — in a specific manner. Some companies have sought greater control over Bitcoin by focusing on these blockchains. Gyft is a company that specialized in gift cards and sought to patent a means through which bitcoins could be gifted by one person to another. Blockstream, on the other hand, sought to patent a means by which entries on a blockchain ledger could be verified without undermining privacy and other characteristics.

Non-Bitcoin Companies Are Seeking Patents Too

Although our focus here is on Bitcoin-oriented companies seeking patents that give them power, we’d be remiss not to mention the non-Bitcoin ventures involved as well. Banks and other financial institutions have notoriously distanced themselves from Bitcoin because of the lack of control. That hasn’t stopped a leading ATM provider, however, from trying to patent how Bitcoin is distributed via these machines, which could effectively give the banks control over Bitcoin in the end.

Final Thoughts

Those who want to control Bitcoin through patents face a difficult challenge in that they must demonstrate innovation while also demonstrating that their control doesn’t impede innovation. Of course, not all patents are simply power grabs, and there is a practical need for defensive patents. It’s for this reason that that many companies are adopting patent assignment agreements, like those innovated by Twitter, that allow patents that are used for defensive purposes only.