IBM has already become a global leader in blockchain technology, but now they are reportedly going after a patent that could have widespread repercussions. The U.S. Patent and Trademarks Office (USPTO) released a patent application on August 16 that was filed by IBM. The system that IBM is patenting is described as performing “Node Characterization in Blockchain.”
The system is probably being designed to help track blockchain transaction at a node level, which could be used for many purposes. Depending on how a blockchain is structured, it can be nearly impossible to tell what is going on in a node that is making a blockchain operate. Some architectures allow a user to see what is happening, but no unified system allows transactions to be monitored and recorded.
According to the document from the USPTO, IBM’s system would extract numerous kinds of data from blockchain nodes. They specifically cite “entity extraction, text mining, information analysis and discovery, compliance, semantic extraction, and ontology-based entity discovery” as types of data that their new system would target.
IBM may be looking for new ways to create oversight
For early cryptos like Bitcoin, transactional anonymity was a significant part of their design philosophy. Some lawmakers criticize cryptos as a whole because of the potential for tax evasion and illegal activity they allege cryptos enable. Although this is an allegation more than a reality, there is no central monitoring authority in the crypto space.
The system that IBM is attempting to patent could become a tool for governments and regulators, to help them enforce forthcoming regulations for crypto markets. It is difficult to speculate on how a node-level oversight protocol might be implemented, or if authorities may attempt to make nodes subject to some form of licensing.
The geographic issues that regulators face are also challenging. Nodes on a blockchain system aren’t subject to any limitations when it comes to working internationally. There have been some attempts to limit the mining of specific cryptocurrencies, though as the recent Sichuan flood demonstrates, it is challenging to enforce regulations in the world of cryptocurrency.
The push for more regulations
IBM isn’t alone in looking for ways to ramp up oversight in the blockchain space. US-based Capital One is working to create a patented blockchain system for user authentication, which will almost certainly be used for Know-Your-Customer (KYC) protocols.
Whether or not this new platform is aimed at crypto is unknown, but there does seem to be a rising tide of patents that seek to increase the data trail coming out of the mostly unregulated crypto space. It remains to be seen how these technologies will be used in the real world, or if they are realistic in their scope and purpose.