Bitcoin, Ethereum and Litecoin have become household terms. Bitcoin’s unprecedented run to $20,000 (and back down again), along with similarly impressive gains by other cryptocurrency, has created a horde of so called crypto-millionaires. But how many people—including those investing large sums of money in this volatile medium—really understand bitcoin and its underlying blockchain technology? And how is this “technology”—where new “coins” debut monthly—dealt with from a patent perspective? This article aims to provide a brief background relating to blockchain technology, with a view toward how it is treated under European patent law.

Briefly, blockchain is a software-based technology that allows the transfer of data in certain divided blocks which are all encrypted. The blocks need to be confirmed from different participants in a network and will be stored decentralized. Hence, it is or should not be possible to manipulate the transferred and stored data because if only one block is manipulated, the system would immediately recognize this manipulation and can prevent any claim or request on this data. Not only can this technology be used to transfer funds between market participants, it can also perform the transfer of any kind of data such as music files, literature, smart license contracts and even sensitive confidential data from governments.

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