Bank of America (BoA) has quietly been amassing a wealth of blockchain technology patents over the past several years, but it is their most recent filing that has analysts believing that the banking giant may be ready to go crypto in the near future. While no major banks in the U.S. have made any meaningful forays into the cryptocurrency field, BoA has poised itself to be a leader in the relatively untapped market. The interest BoA has in cryptocurrency isn’t investing it, but rather offering people the ability to use it more readily, and possibly at some point, allow it for deposit within their banking system.
According to Blockonomi, BoA now has more than 50 blockchain patents, and what the combination of technologies covered under those patents seems to point toward is becoming a large-scale payment processor for cryptocurrencies. While many advocates of cryptocurrency site privacy as one of the main reasons for using it, using cryptocurrency isn’t always very easy, even for one such as Bitcoin which is very established. There simply aren’t many stores, restaurants, or any type of outlet that accepts payment in cryptocurrency.
Bank of America has filed more than 50 blockchain patents since June. Some institutions appear to understand the danger of #Blockchain to their business, so they’re trying to secure a position in the field as well. #HMQwhatsnewhttps://t.co/rFEeb6fI0n— Humaniq (@Humaniq) August 27, 2018
What that means for most people is that they have to convert their Bitcoin, Monero, or whatever it is they hold, into government backed currency that they can then transfer to their bank account, PayPal, or whatever service they use, in order to use their cryptocurrency proceeds to buy most things. While some businesses do accommodate cryptocurrency, for the most part, it is still a fringe concept.
With BoA’s latest patent which is for “Blockchain Encryption Tags,” it appears to blockchain experts they now have all of the parts needed to create a system to process cryptocurrency in the same way that debit or credit cards are used now for point-of-sales transactions. It would allow them to record deposits and facilitate transfers, a bit like Zapo has done but on a much broader scale. Major corporations such as Walmart are looking into similar systems, but the odds are that most major retailers, utilities, and similar enterprises that are headed toward doing business in cryptos, they will stay with a federally regulated bank rather than use an app or private third party.
The abstract from BoA’s latest blockchain patent, as seen at Blockonomi, sheds light on the direction they are heading in the crypto market for people with a working knowledge of blockchain technology.
“A system that includes a device with a processor is configured to receive a first set of data elements and to obtain an encryption key from a memory. The processor is further configured to encrypt the first set of data elements using the encryption key, to embed the first set of encrypted data elements within a first block for the blockchain, and to generate a first encrypted element map identifying the locations of the first set of encrypted data elements within the first block. The processor is further configured to combine the encryption key with the first encrypted element map to generate a creator tag, to encrypt the creator tag, to embed the creator tag within the first block, and to publish the first block to a blockchain.”
While all the parts appear to be in place based on their patents, it is not likely that BoA will officially enter the crypto market in under 18 months, and even then it will likely be on a small regional scale to make sure the system is working as it should, and to have enough participants signed on to give it a proper stress test.