Blockchain Patents on the Rise Despite Bear Market
With Bitcoin down almost 40% this month, it feels like winter is indeed coming, and many investors are already trembling in the cold wind. But when we look at the underlying blockchain technology that supports the entire crypto industry, I can't help but think of Marx’s philosophy: History always progresses in twists and turns, spiraling upward. And while the price may be on a downward tumble currently, data suggest that the industry is still marching forward.
Specifically, LongHash gathered data from Google Patents and analyzed the number of patent applications filed in the blockchain industry over the past year. We found that even as the price of various coins have fallen, technical patents in the industry have steadily increased (see the figure below). This is good news. Clearly, geeks in the blockchain industry aren’t particularly concerned with the market price of crypto, and are working to improve their technologies.
In addition, we analyzed the distribution of countries that these blockchain patents are coming from.
Perhaps unsurprisingly, the clear leader is the United States, which was the source of 36% of blockchain technology patents filed over the past year (1,264 total patents). It is followed by China, which has 29% (1,016 total patents). Globally, a total of 3,552 blockchain patents were filed, according to Google Patents statistics. These numbers suggest that blockchain technical talent is highly concentrated in the United States and China.
But who exactly is holding those patents? To find out, we analyzed the affiliations of patent holders, and made the word clouds below. The first one is for China, and the second one is for the United States. The larger the font, the more patents the individual or institution holds.
The above word cloud illustrates the distribution of patent holders of blockchain technology in China. Alibaba and the People's Bank of China Digital Currency Research Institute each hold 20 patents, followed by China Unicom, which has 17 patents.
How about in the United States? The above chart shows the list of US blockchain patent technology owners. Among them, IBM leads with the publication of 78 patents, accounting for 6.2% of the total number of blockchain patents in the United States over the past year. Bank of America comes in second, with 36 patents.
There are a few interesting things to note about this data. The first is that even as the Chinese government strictly prohibits the trading of cryptocurrency via mainland market exchanges, the Bank of China Digital Currency Research Institute has systematically developed blockchain technology. The government clearly still supports the development of blockchain technology, even if it is worried about crypto.
The second notable revelation is that the banking industry has contributed a significant number of blockchain technology patents. This suggests that blockchain is a good candidate for the next generation to optimize friction-less payment systems or billing methods.
The third notable point is the presence of tech giant Alibaba. Alibaba has already built an e-commerce empire, does it now want to dominate blockchain as well? Efficient point-to-point payments in blockchain technology will likely be used for Ali's cross-border payments, but hopefully we’ll see more creative applications as well.
While it’s great to see Alibaba investing in blockchain, another monopoly is not what most blockchain enthusiasts want. Ideally, the decentralized nature of true blockchain technology will subvert the current profit models of tech monopolies.
That brings us to the fourth point raised by this data: blockchain patents are monopolized by banks and technology companies. This also shows that the threshold of this industry is still fairly high. The general public is not filing patents, it is just buying and selling digital currencies. Most people don't really care what happens on the blockchain.
But there are other signs of hope for the industry as well. The publishers of blockchain patent technology include major banks, technology companies, consulting companies, retail giants and university research institutes, etc. This shows that even if winter comes, relevant academic circles are working on technology and steadily promoting the development of the industry.
There’s no question that the currency market is risky, and it is necessary to be cautious when entering the market. But hopefully some of these data points will help keep you warm through the crypto winter.