JiNan is recognized worldwide for her expertise in Intellectual Property. She is the co-founder of Magic Number and founder of Neo IP.
When Elon Musk recently converted 10% of Tesla’s cash reserves to Bitcoin (over $1.5 billion), the markets went crazy. But the intense buzz about Bitcoin and cryptocurrency is part of a huge growth trend that began last year and that our company expects to continue to have tremendous growth in 2021 based on the insights into market trends that our software provides.
We’ve seen this disruption coming for more than five years — because investment in patents always leads to market activity. According to our patent data, the cryptocurrency sector has grown by over 530% over the last five years. USPTO data confirms this sector growth over time, including early growth as high as two times in 2018.
This may indicate why companies are investing in research and development consistently and increasingly in this sector. Inventions in this area cover activities in tracking, finance, mobile wallets and e-commerce. Cryptocurrency, tokenization and, more importantly, blockchain technologies are becoming increasingly common in the applications for networks and computing, security, industrial applications and securities.
Musk’s move into Bitcoin pushed the cryptocurrency into record-breaking territory. Some have even projected that the dollar will continue its decline, and suggest that all investors and individuals should be in cryptocurrency. The growth of this sector is particularly interesting because one of the top patent investors for quite some time has been Bank of America, which is surprising since banks are not typically considered technologically innovative. According to CNBC.com, “The giant bank has accumulated the most patents for the technology of any financial services company, for inventions ranging from blockchain-powered ATMs to storage for cryptocurrency keys.”
Since cryptocurrency has been expected to transform the way everybody does business, it could eventually make banks obsolete. Big changes are already being made to how business is being done, and it is only the beginning of the impact this sector is expected to have.
Consider how one company, Equity Shift, is positioned to disrupt the world of investing. (Full disclosure: I provide IP legal services for EquityShift and made a limited seed investment in the company.) The Raleigh, North Carolina-based company is competing with Nasdaq Private Market, Forge and Carta by offering an alternative trading system platform for investors to participate in the secondary markets. Right now, most investors cannot participate directly in secondary markets because of the legal and operational restrictions on private securities. Equity Shift is implementing a distributed platform using smart contracts to automatically execute activities that are permitted by the company’s rules and compliance with regulations.
Blockchain technology fundamentally enabled EquityShift’s solution to this longstanding need for broader access to secondary markets and liquidity for investors in private companies. The tokenization of assets has been adopted across many industries, from marketing to real estate. For example, Harbor, which has created a series of solutions that facilitate the creation and management of digital securities, has launched a global platform for the tokenization of real estate assets that provides for fractional ownership. Consider also, the Basic Attention Token (BAT) that provides for microcompensation for advertising campaigns and interaction between consumers, companies and their marketing.
With cryptocurrency emerging not only as a new technology but functionally new global currency, privacy concerns come along with it. Cryptocurrency security is still a concern facing the sector today. Cybersecurity as a related sector of technology will continue to draw investment and provide innovative solutions to address the concerns and prevalence of digital, distributed platforms for financial exchange.
As more companies enter the cryptocurrency marketplace, predictive data will play an important role in determining which companies will lead the sector. In any case, investment in cryptocurrency and cybersecurity solutions continues to rise at an increasing pace for 2021.