Blockchain is a technology that allows for the creation of decentralized data exchanges. Blockchain is the system that makes cryptocurrencies like Bitcoin and Ethereum possible. Beyond cryptocurrencies, blockchain technology is also revolutionizing the financial industry. It is just now beginning to impact the healthcare industry, with the spread of blockchain technology in the healthcare industry expected to take off.
From the perspective of the individual who seeks to tilt the balance of power toward individuals and free associations, the decentralized nature of the blockchain promises great opportunities to undermine the power of coercive enterprises and increase the power of individuals and free associations.
Not only does blockchain technology offer a decentralized method of data exchange, it can also offer encryption that allows for the anonymous exchange of data, promising to cut out of the data exchange any eyes and ears from the coercive enterprise. I’ll let your imagination figure out the possibilities that could emerge from such conditions.
Well, it would seem that the coercive enterprise, specifically those who continue to either support or even simply assume that the coercive enterprise model of governance is a forgone conclusion, is always searching for ways to benefit from the power of the blockchain, but while keeping the blockchain contained, so that it doesn’t do the things it could do that would reduce the power of the coercive enterprise.
Safraz W Ishmael, a lawyer writing in the journal “The National Law Review,” hints at one of the tools that could help the coercive enterprise in keeping the power of blockchain contained. He writes:
Last year’s spike in the valuation of bitcoin has much of the technology world focused on blockchain, the distributed database ledger technology behind bitcoin and many other cryptocurrencies. Lost behind the scenes, however, is a rush by some in the industry to patent inventions relating to the blockchain technology itself. These moves come with controversy in an industry known for its culture of open-source practices.
Patenting blockchain technology is catching on. According to a search of the Patent Office’s database, there have been over 50 U.S. patents issued relating to blockchain technology, almost all of them issuing over the last few years. And there are many more such patents in the pipeline. A search of U.S. patent applications shows that there are well over 500 published patent applications relating to the technology, and there are likely many more pending unpublished applications in the space. While many of the patent filers appear to be smaller companies, interestingly, a significant number of the patent filers are from among the larger Fortune 500 companies, including from among the big banks.
Even more controversial is that non-practicing entities are now entering the blockchain patent race. Indeed, a recent blog post by Erich Spangenberg, one of the major players in patent monetization, recently announced that he is starting a company that is focused on hiring programmers, data scientists, and “patent wonks,” with an apparent goal to brainstorm and patent inventions in the blockchain space. The general business goal would be to monetize these patents, i.e, to send out demand letters to operating companies to seek license payments, and if that fails, file lawsuits to enforce the patents.
And while software patents are much more difficult to get through the Patent Office these days, especially after the Supreme Court’s 2014 ruling in Alice v. CLS Bank (finding that software that implements intermediated settlement services is ineligible for patenting), recent interpretations of the Alice case by the lower courts have indicated that patents directed to innovative database technologies that improve a network of computers may be patent eligible. As blockchain is at bottom a complex decentralized database system designed to track and store electronic transactions, many innovations in the space may very well be eligible for patenting.
The use of “proprietary” or patented, or copyrighted, technology to equip a blockchain network renders that network a compliant servant of the coercive enterprise. This is why many people have taken a critical eye at bitcoin, which is now utilizing proprietary “copyrighted” technologies to enhance its network (like the so-called Lightning Network).
Efforts by governments to regulate blockchain technologies, to control the use of cryptocurrencies, will be difficult at best, save for among those who are willingly, eagerly compliant with the coercive enterprise system. Patents and copyrights will be far more effective in controlling the blockchain networks.
For those of who seek to tilt the balance of power towards individuals and free associations, a blockchain network that utilizes copyrighted or patented technology is not the home for us. This is not to say that we shouldn’t, couldn’t utilize these networks, but it is to say that we should not put ourselves in a position to rely on these networks.
In short order, blockchain networks will be controlled in a centralized way by the same powerful entities that control the other networks of power that exist today. Patents and copyrights will create opportunities for unscrupulous people like Safraz W Ishmael, who champions for putting blockchains back in the hands of the owners and managers of the coercive enterprises of the world, the ones that the blockchain was originally created to avoid.
There will be, as there is today, patent wars, patent trolling, copyright trolling, with the winners of the lawsuits sure to be the ones with the most powerful lawyers, who are the ones that have the greatest resources to assure they have mastered the language of law, and thus will win in the court of law. In other words, he or she who has the wealth has the patents and the copyrights.