IBM continues its expansion into blockchain technology – a patent application filed by the tech giant was released couple of days ago by the U.S. Patent and Trademarks Office – USPTO, called “Node characterization in a blockchain”. The patent paper outlines different types of data extraction from blockchain nodes such as ‘entity extraction, text mining, information analysis and discovery, semantic extraction’, etc. The nodes on the blockchain can hold useful extracted information, which can give an insight about the nature of transactions. This type of data tracking could be used for various purposes from governments and lawmakers through regulators.
The system is deployed with modules that can be implemented as hardware circuit or gate arrays, transistors or other components. The modules might also be implemented in hardware devices such as programmable array logic and graphics processing units.
Transactional anonymity is concept built in the cryptocurrencies and it’s often a concern about the potential misuse of this technology for illegal purposes, tax evasions and other criminal activities enabled by this anonymity. This ‘feature’ of cryptocurrencies is probably the most used one from the critics when addressing the issue of potential criminal use or observing the lack of an authority for monitoring. Actually, this is more an allegation rather than a fact.
Creating transparency in the network
This type of data extraction system that IBM wants to patent could grant the regulatory bodies with a tool for monitoring the level of data security in a particular blockchain network. One of the possible scenario usages is the anti-money laundering (AML) function. Since the system is capable of detecting whether a node is involved in any type of fraudulent activity such as suspicious transaction, tracked entity or daily transfer limit violations.
As mentioned in the beginning, the company’s expansion in the blockchain is obvious but IBM is not the only one looking for ways to create oversight in this space. Another US based financial corporation – Capital One, has also applied for a patent which involves a blockchain system for user authentication, which will ease the regulatory process of security requirements such as KYC – Know Your Customers.
The interest in data monitoring of the widely unregulated space of crypto is undoubtful, whether or not this patent will aime for it.