United States’ second-largest bank, Bank of America [BOA] has filed a blockchain patent at the U.S. Patent and Trademarks Office [USPTO]. On 23rd August, USPTO published the filing titled ‘BLOCK CHAIN ENCRYPTION TAGS’ on their official website.
The patent describes a system that can offer security to businesses dealing with a large number of financial transactions involving cryptocurrencies. The proposed system will offer enhanced security to the blockchain, stated the document.
The idea behind such an encryption device first originated in June 2014, when James G. Ronca filed a patent titled ‘CRYPTOCURRENCY ONLINE VAULT STORAGE SYSTEM’. This new filing is a reproduced version of the initial patent, the documented stated.
The document describes how this particular idea is different from the ones existing already. A patent document filed in April 2018 by a North Carolina Bank brought forward a device that included a processor which initially receives a set of data. The device then acquires an encryption key. The first data is then encrypted using the key. The encrypted data is stored in the blockchain. Further, the device generates a key which is mapped to the encrypted data stored in the blockchain.
The proposed patent further adds an additional layer of encryption to the existing one. The key mapped to the encrypted data in the blockchain is further combined with an encryption key to create something known as the ‘creator tag’. Additionally, the creator tag is then encrypted. The encrypted tag is then embedded into the blockchain, and now the blockchain is ready for publishing.
In brief, the proposed system offers data security for blockchain networks by implementing an additional encryption technique and linking data units to a block inside the blockchain.
The BOA has shown a large interest in the field of Blockchain. It has filed nearly 50 patents concerning blockchain till date. According to reports, the bank is the holder of the largest number of blockchain patents.
Although BOA has been seen supporting blockchain tech to a large extent, the bank has a negative stance towards cryptocurrencies. According to a report from CNBC, the Bank of America said a strict no to cryptocurrencies and banned its customers from buying Bitcoin [BTC] earlier this year.
Kathy Bessant CTO of BOA said:
“As a payment system, I think it’s troubling, because the foundation of the banking system is on the transparency between the sender and the receiver, and cryptocurrency is designed to be nothing of the sort, in fact [it’s] designed to be not transparent.”
Despite having such a negative stance towards cryptocurrencies the bank filed a patent at the USPTO proposing to create a digital currency exchange. The patent was awarded to BOA in December 2017.
Earlier this year, Reuters reported that J.P Morgan Chase has been dragged into a lawsuit concerning cryptocurrencies. The case was filed at the Manhattan Federal accusing the bank of taxing a fee for purchasing cryptocurrencies through credit card. The customers claimed that the bank treated the transaction as cash advances.
Several other banks like Lloyds, Virgin Money, and Citigroup have banned the use of credit cards to buy cryptocurrencies after the value of Bitcoin drastically dropped this year.
The growing friction between the banks and cryptocurrency seems to continue. However, BOA has admitted that the increasing use of cryptocurrency can pose as a threat to their business. In its annual report to the SEC this February, the bank stated:
“Our inability to adapt our products and services to evolving industry standards and consumer preferences could harm our business.”
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