The Proof is in the Patents: The Future of Blockchain
Author: John Souza
Smart investors are continually looking for the inside edge, ways to get slightly ahead of the market and cash in on future behavior. And while neophyte investors might keep an ear open for the latest market news, that may be too late. Experienced investors know that they have to go beyond market news to look at other trends — and one crucial source of information is patent applications.
Patents Provide a Glimpse of Opportunity
Looking at trends in patent filings can tell you a lot about specific companies, as well as suggesting areas of market expansion. As intellectual property consulting firm GreyB Services explains on their blog, “Patents give you an idea of how a particular market is, and will be, moving. It helps you know the futuristic prospects of that field.”
In other words, an upward trend in more patent filings in a particular field indicates a corresponding upward trend in research activity in the field. If you’re looking for hot areas rife with opportunity, that increased activity can be a sign that investment is occurring in R&D in that area.
Here are three reasons you should be looking at patents for opportunities:
- Patents help you identify “the next big thing.”
- Patents help you identify growth markets.
- Patents show which companies have a competitive advantage.
What About Blockchain?
One area that is on most fintech companies’ radar these days is blockchain, a distributed database technology that has the potential to revolutionize everything from agriculture to the supply chain to asset markets.
And while cryptocurrencies built on the blockchain — such as Bitcoin, Ripple, and Ethereum — are stealing the headlines, blockchain technology itself is a much more interesting and potentially lucrative opportunity.
With the Wall Street Journal reporting that over $4 billion was raised via initial coin offerings (ICOs) in 2017, a lot of money is in play, with more on the way. But do patent filings support the belief that blockchain is as innovative as many believe? Let’s take a look.
Proof in the Patents
According to the United States Patent and Trademark Office (USPTO), almost 400 blockchain-related patent applications were filed in the US in the first half of 2017 — about twice what was filed in the same period in 2016, and over five times the number that were filed in all of 2012, the year that marked the first occurrence of the word “blockchain” in patent history.
A recent study published by EnvisionIP, a New York-based law firm that specializes in analyses of intellectual property, says that a total of 1,045 patents or applications related to blockchain have been filed in the US, with the majority coming in the past year. “An uptick in recent blockchain patent publications may be an indication that the technology is quietly picking up steam, with competing big banks and tech businesses vying for leadership,” writes Bruce Berman for IP Closeup.
The Time Is Now
If you’re considering following the patents, the time to do so is now, before blockchain hits the mainstream.
“For all its promise, and the amount of media attention it has received, in patent terms blockchain remains in its very early stages,” writes Richard Lloyd for IAM, a publication reporting on intellectual property as a business asset. Many of the tech industry’s largest patent-holders — Google parent Alphabet and Microsoft, for example — own relatively few patents, while fintech companies such as IBM and Bank of America lead in blockchain patents.
Lloyd says he sees interest in blockchain as a broader trend among IP value creation specialists, and some of the world’s largest patent-owning companies. “All of which suggests that patenting activity in blockchain is well worth keeping an eye on in the next few years,” he adds.
Sean Williams of The Motley Fool agrees. “While cryptocurrencies and companies developing and marketing blockchain for enterprises have a means to benefit financially, the intellectual property (IP) underlying blockchain technology could prove even more valuable over the long haul,” he writes.
Patents are one indication of a potential opportunity, but you also should look at the overall market, the company, and its leadership team. And, of course, the first step is to educate yourself on the technology itself. The more you understand about blockchain, the better able you’ll be to sort through the plethora of opportunities facing you to find the golden needle in the haystack.
John Souza is founder and CEO of Kingsland University — School of Blockchain, the world’s first accredited blockchain training program. Souza is driving conversations around education policy for skill and capacity building in emerging economies at the World Economic Forum, OECD and at conferences and summits around the world. Find out more about Kingsland’s leading-edge education at KingslandUniversity.com
