The Innovation Race
China is increasingly filing a large number of blockchain patents. The country has clamped down on cryptocurrencies, so their heavy activity in the blockchain patent landscape is significant.
The free market economy rewards enterprise and innovation by its very nature. Innovation creates wealth, and patents are important because they protect against unauthorized use of innovations. A high number of patents indicates a vibrant, creative landscape.
Countries with a high number of patents indicate a focus on innovation and technology in addition to showing that they respect the fundamentals of a free market. It’s also obvious that people and organizations there feel confident that their innovations will experience fair protection.
The US clearly leads the pack in terms of patents. The country also currently has the highest number of blockchain patents; however, that lead could be narrowing.
In most technologies, the US regulatory framework promotes innovation. Blockchain-crypto startups face a different scenario because the country hasn’t firmed up regulations. Some state governments have supported crypto; however, federal regulators have taken a tough stance. In another example, the blockchain logistics start-up ShipChain received a cease-and-desist order. South Carolina state regulators have since overturned that order, signifying a degree of uncertainty.
Blockchain and cryptocurrencies are intertwined, so restricting crypto signals a negative view of the technology. Blockchain startups need assurance that regulators won’t restrict the technology. US regulators’ actions haven’t given such an assurance, therefore innovation is slowing down.
China is compartmentalizing far better.
Embracing Blockchain, Not Crypto
China is clamping down on cryptocurrencies. However, a large number of Chinese organizations are filing patents for blockchain innovations. China ranks second behind the US in total number of blockchain patent applications; however, in 2017 they filed many more patent applications than the US. China accounted for 56% of the 406 blockchain patent applications in that year, while the US only applied for 22%. It would seem that blockchain innovation is slowing down in the US and accelerating in China.
Chinese organizations are utilizing the technology for various use cases: supply chain management, global remittances, postal service, and healthcare are only a few. People’s Bank of China, the country’s central bank, has filed 68 blockchain patent applications to date. Alibaba, China’s second most valuable company, accounts for more than 10% of all blockchain patent applications.
Chinese internet giants like Tencent and Baidu have also filed many patent applications, further signalling the country’s strides in the blockchain patent landscape. Other prominent Chinese organizations with many patent applications include Beijing Rui Josie Technology Development, China United Network Communications, and Hangzhou Qulian Technology.
In China, the government is taking a keen interest in blockchain technology, while continuing to ban cryptocurrencies. The local government in charge of the country’s prestigious dream city project has identified blockchain use cases, choosing the Ethereum platform.
Businesses around the world are patenting their blockchain innovations. In the crypto space, Sony is developing a crypto-mining hardware solution, whereas Bank of America is trying to eliminate crypto exchange hacks. Elsewhere, UPS is upgrading their logistics with the blockchain technology, while Walmart will use it to manage smart homes.