Goldman Sachs files a patent for a blockchain tech.

[spartak_t]

Like I said, decentralization is a dream. What may happen with Bitcoin, altcoins and exchanges in near future? What about our "privacy"? Companies like Goldman Sachs could tell us: "Monero (or whatever) is illegal and our privacy is better". End of story.   


"Trading currencies is costly and slow for traders at major financial institutions—transactions need to go through a bunch of middle men, each of which take a slight fee. A new patent application from Goldman Sachs hints at how the blockchain technology that is behind bitcoin could revolutionize that process.
The patent application, published by the US Patent and Trademark Office (USPTO) on Sept. 8, 2016, was originally filed in March 2015. It outlines a distributed ledger (essentially an accounting ledger shared by a number of different parties, also known as a blockchain) that can process financial transactions in the foreign exchange market. It’s Goldman Sachs’ first blockchain-related patent (though another patent application published in Nov. 2015 showed the investment bank was looking at a bitcoin-esque digital currency for traders).
Foreign exchange markets are risky—a party sends their funds to an intermediary, like the CLS, a foreign exchange settlement service. The CLS holds on to the first party’s funds while they’re waiting on the counterparty on the trade to provides their funds. The problem? The first party’s capital gets tied up in that specific trade until it’s settled, which can take up to a day. That makes trading in foreign exchange markets a slow process. The hope is that blockchain could provide “near-real-time” transactions to speed up the foreign exchange market.
Banks have been experimenting with blockchain technology to make transactions faster and cheaper for the past year or so, but most projects are still nascent. There are some fairly robust systems, like bitcoin and Ripple (a blockchain startup); bitcoin processes over 180,000 transactions a day, and banks like UBS and Santander have been partnering with Ripple. But those systems have their drawbacks, according to the Goldman patent filing, especially in the highly regulated industry of financial services.
“[T]hese systems suffer from significant disadvantages in terms of privacy,” according to the patent, because anyone can see any transactions made on the bitcoin blockchain.
If a bank blockchain was fully transparent, it would allow competitors to place opposing trades against a certain transaction and greatly reduce the competitive nature of foreign exchange trading. Bitcoin and Ripple also “lack designed-in identity checks that aid regulators with policing anti-money laundering,” the patent says.
Essentially, Goldman wants to merge the benefits of blockchain technology—speed and efficiency—with other technologies that offer privacy, security, and compliance with regulatory guidelines. For example, Goldman’s version of the blockchain would allow for private transactions only visible on a need-t0-know basis; permit regulators to access the database; and adhere to anti-money laundering regulation and Know Your Customer laws, which require that banks confirm the identity of their customers.
As blockchain technology starts to permeate Wall Street, banks have begun collecting intellectual property over its potential uses. Bank of America has been filing for patents for quite some time and now has approximately 50 blockchain-related patents in its pipeline, the bank’s CTO David Reilly told Quartz. Of course, just because companies file for patents doesn’t necessarily mean they’re using them now or in the future—and the USPTO can still deny any of these applications."

Source: http://qz.com/779660/goldman-sachs-wants-to-put-foreign-exchange-trades-on-the-blockchain/

[64dimensions]

There are several issues here:

0) Novelty. Broadly the USPTO is looking for novelty in a patent application. So patenting new BC tech is probably one way, but also blockchain tech and some new application. As an example, suppose someone wanted to patent a food safety application where serial numbers from food packages are stored in some sort of blockchain. Consumers could gui the serial number of their frozen spinach or can of tuna and see what the product status is. So this application is blockchain  tech and food safety. It would most likely get patented because the scope of the patent is so narrow. So the broadness of a patent is an issue.

1) Prior art: If there was any prior art, in other words someone has published/presented something partially covered by this application before the filing date 3/xx/15, then it is not patentable. This goes for anything presented/published in other languages. For those who think white papers, power point briefs and conference presentations are a waste of time, all of the above are a form of patent defense. By putting it in the public domain in some form it becomes prior art. Websites and such should be archiving this stuff for permanence. If a patent is issued and prior art is discovered that is disclosed in the patent, then an action could be filed with the USPTO to invalidate the patent.

Further question for a patent attorney would be: is stuff posted in a forum prior art?

2) The patent application. The USPTO doesn't necessarily deny the whole application, but it can and often does deny parts of what is claimed as new if it is trivial, understood to be obvious to one knowledgeable in the field or is covered by prior art.

3) The GS patent also exposes a blindness of the crypto community. Businesses will want some sort of trusted BC centralization for the reasons stated in the application. Something that appears to be not of interest to 99.999% of this forum.

4) This is a US patent. It's very difficult to patent something that covers the world. How do you enforce a US patent on someone using your BC technology in a jurisdiction where it's not protected but accessible via the internet to the world?

5) New crypto coins may have to be more careful in the future because what they are doing might be covered by a (future) existing patent.

6) The GS filing also exposes something else. The value of what people call crap coins. By having so many crypto coins in the public domain, these coins contribute to the body of prior art. All their white papers and such have value as prior art. Killing them off might be a bad thing.

[spartak_t]

This patent also exposes a blindness of the crypto community. Businesses will want some sort of trusted BC centralization for the reasons stated in the application.

Of course! https://bitcointalk.org/index.php?topic=1598094.0

This is a US patent. It's very difficult to patent something that covers the world. How do you enforce a US patent on someone using your BC technology in a jurisdiction where it's not protected but accessible via the internet to the world?

Ask Kim Dotcom.

New crypto coins may have to be more careful in the future because what they are doing might be covered by an existing patent.

I am more worried about the current situation. They could patent something that is already "invented". For example - the blockchain tech.

[vokain]

Funny how the blockchain might help upend patents. By patenting something that probably will turn out to be unenforceable, and as people prove its unenforceability, it will further wake people up from the others' matrices.