The blockchain hype has now been going on for several months, and numerous advancements have been noticed. According to recent reports, Goldman Sachs has just submitted a patent application that focuses on the idea that blockchain technology can be used to cut out the middle man, and change the current financial processes.
The patent, known by the name of “Systems and Methods for Updating a Distributed Ledger-Based on Partial Validations of Transactions” was initially published on the 8th of September, and filed back in March 2015. This means that it is the financial giant’s first blockchain-based patent so far.
Since the distributed ledger technology came out, banks have slowly turned their attention to it, by actively looking for ways to make transactions faster and less-pricey. In the patent, it has been stated that: “These systems suffer from significant disadvantages in terms of privacy, because they maintain balances and transaction records in publicly accessible ledgers that are stored on distributed servers.”
It is important to be aware of the fact that Goldman Sachs isn’t the world’s first bank to apply for a digital currency or blockchain patent. In fact, earlier this year, the Bank of America reportedly had around 20 drafted patents, and had submitted 10 applications so far. This led to speculation that the bank was trying to come up with innovative ways of introducing their own digital currency system that would work alongside traditional currencies.
At this moment in time, predicting whether Goldman Sachs will end up using the patent if it ends up being accepted by USPTO can be quite difficult.
Regardless of this, while blockchain technology has been proven to offer numerous useful features for banks and other financial corporations, putting things in practice has been proven to be quite difficult. One of the main issues is the presence of transparency, which many bankers aren’t happy with, as it has the potential of compromising the privacy of current and future customers if not dealt with accordingly. Not only this, but the banking sector itself wouldn’t be too happy, as this would potentially allow other banks to spy on their rivals and see what sort of activities they are currently undertaking.
This has led to numerous ideas of introducing closed, distributed ledgers that would lack this particular feature. This means that the information present on a closed blockchain network can only be seen by regulators, appropriate and counterparties. This solution is less radical, and may actually work in the long run, especially giving the world’s current concern over privacy matters.
Based on everything that has been outlined so far, what do you personally think about the latest developments in the blockchain sector? Let us know your thoughts in the comment section below.