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Patent Stockpiling: Bank of America Holds 45 Crypto-Related Patents

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A patent grants its holder exclusive rights to an invention, such as a piece of technology, for a certain period of time. While designed as a means of protecting the intellectual property of inventors, the system is not without its critics who believe that patenting deters innovation and wastes resources.

Consider crypto founding fathers like Satoshi Nakamoto, individuals and groups who place ideas ahead of profit and are more aligned with open source principles than filing patents and closely guarding their secrets — the only secret Satoshi guarded was his/its identity. It may come as a surprise, then, to learn that in the last decade the company that has amassed more cryptocurrency patents than any other  — and who, to some, seems to be the antithesis of everything decentralized currency stands for — is Bank of America.

According to Bitcoin Patent Report, in the nine years since Bitcoin’s first block was mined, over 2,000 related patents have been filed. In the cryptocurrency’s first few years the number of patents was low — averaging under 50 a year. By 2015 that number began to increase, and by 2016 was growing exponentially. In 2017, 1,250 cryptocurrency-related patents were filed.

Some of the companies who feature in the top ten are to be expected, such as Bitflyer and IBM, whose interest in blockchain is well documented. The computing giant has filed a total of 34 cryptocurrency related patents, but is outpaced by South Korean brokerage Coinplug, which is third on the list with 39.

Others on the list are more unexpected, either because they have publicly expressed little interest in cryptocurrency, or are not commonly associated with such cutting-edge technology. It makes sense that MasterCard would have an interest in digital payment systems, for example, but it is surprising to see them ranked ninth for cryptocurrency related patents, with 21 filings. The greatest surprise of all is reserved for the top spot, which as noted above is claimed by Bank of America, having at least 45 patents filed.

Bitcoin Patent Report also revealed that 50% of all crypto-related patents come from China (910), followed by the U.S. (676), the U.K. (112), and South Korea (98). Regardless of the merits of each patent, and the moral case for their very existence, they indicate an unprecedented level of interest in Bitcoin and blockchain technologies.

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Credit Card Companies Spooked by Crypto Scams

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As crypto becomes more popular the number of cyber criminals looking for some easy pickings will increase. Online scams are nothing new but the nature of cryptocurrencies means that those without the technical expertise will be additionally vulnerable. Banks and credit card issuers have acknowledged this which may be the reason behind their buying blockade.

Recently Bloomberg reported that the major players such as JP Morgan Chase, Citigroup, and Bank of America declined crypto purchasing as company executives analyzed ways that customers could get scammed. Officially JP Morgan’s stance is that people may not pay back their credit card debts if the crypto markets fall and they lose out.

ICO Worry

Initial coin offerings, which made $3.7 billion last year, were at the top of the list of concerns. To raise money startups sell tokens at big discounts usually for Ether. A number of bogus ICOs have been reported recently and the fear is that clients will get burnt if they do not research them properly. It can often take days for tokens to be issued and cardholders can dispute the charges causing further problems.

Most major exchanges eschew the tokens but some ICOs still allow credit card purchases. Facebook, which has been a hotbed of scams, recently banned ICO advertising but this has not stopped individuals using the platform to peddle their fraudulent token sales.  Kodak warned potential investors last week that phony websites and Facebook accounts are promoting and even claiming to already be selling their planned digital token, Kodakcoin.

Card confidence

Another concern is that fraudsters can open a credit card account with a stolen identity. Using the new card the scammer would be able to accumulate a stash of cryptocurrency and tokens. Genuine credit card buyers are not worried as they’re not using their own funds, one user who bought Bitcoin at the top posted;

“Am I worried? No. I bought it on my credit card through Coinbase and had planned the repayments would be paid out of Bitcoin profits. First payment due in a couple of weeks and I believe we will start to rise up before then.”

Coinbase has recently introduced a ‘cash advance’ fee for credit card usage which effectively adds a 10% tariff to all crypto purchases. In a blog post the company said;

“Banks and credit card issuers may now add cash advance fees to purchases of digital currency. Customers will notice this listed as a separate line item on their credit card statement. These additional fees are not from Coinbase. Because these fees are charged directly by the bank or credit card issuer, unfortunately we don’t have a way of knowing when they might be charged or how much they might be.”

Preventing people borrowing to buy crypto is healthy for the market and less likely to cause the bubble effect we witnessed last month. With only genuine traders and investors funding purchases with their own fiat the ecosystem should start to stabilize somewhat.

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