According to a Thomson Reuters’ analysis of the World Intellectual Property Organisation (WIPO) database, more than half of the 406 blockchain patent applications filed in 2017 were filed from China.
A blockchain, originally “block chain,” is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block, a timestamp and transaction data. By design, a blockchain is inherently resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.
Blockchains are secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain. This makes blockchains potentially suitable for the recording of events, medical records, and other records management activities, such as identity management, transaction processing, documenting provenance, food traceability or voting.
Blockchain was invented by Satoshi Nakamoto in 2008 for use in the cryptocurrency bitcoin, as its public transaction ledger.
Thomson Reuters’ analysis showed that patent applications for blockchain technology tripled in 2017 as compared with the year before. Of the 406 patent applications filed with WIPO that Thomson Reuters considered to be related to blockchain, China filed by far the most (225), followed by the US (91), and Australia (13).
Even as the Chinese government has taken a hard line against cryptocurrencies (initial coin offerings (ICOs), mining and trading), it has also taken an official interest in developing the blockchain technology underlying and popularized by those cryptocurrencies. For example, the Chinese Ministry of Industry and Information Technology last month published a list of objectives to encourage the development and standardization of blockchain technology.
Of course, many patent applications are rejected, and even a registered patent may never translate into an actual product. Thomson Reuters’ assessed only the quantity, and not the quality, of blockchain patent applications filed with WIPO. Additionally, patent applications differ greatly with respect to the scopes of the inventions claimed.