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TomZ
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A simple explanation of why its bad for Blockstream to own Patents on Bitcoin consensus technology.

Tue May 02, 2017 10:14 pm

We learned last week that Blockstream owns patents on Bitcoin technology, as described by the founder of the Freedom party Rick Falkvinge.

I want to explain a little what this actually means, as ideas like copyright, patents and other Intellectual Property rights are confusing enough as is in normal life.

We generally have two important sections of the law we use.
  • Copyright. This is the ability of people to own their creative works. I have a lot of copyright ownership in Bitcoin Classic, as do many others.
    I license this using an open source license to everyone with the explicit purpose that nobody can limit any other person how this code can be used, copied or ignored.
  • Patents. The ability of people to own an idea. You have to actually convince the government your idea is novel and pay a lawyer and other fees to get a patent. Only since about 10 years or so are patents (unfortunately) applicable to software.
    A patent owner would have to license his patent to any person or company individually.
So the main take-away here is that a patent wins from copyright. I can have a copyrighted work that I put on my website years ago, but if someone manages to get a patent on that idea then I no longer can use my on code. And nobody else can do so either. The government can come to you with guns and enforce the patent.

How does this apply to Bitcoin?

A company like Blockstream that owns patents on SegWit and other technologies can try to activate SegWit, which means that all software everywhere will have to implement their patents. They can write the code themselves and hold full copyright, but they will always have to ask permission from the patent holder to actually publish their software.

One of the main advantages of Bitcoin is that it removes the central hub. No central bank, no Microsoft, no IBM to ask permission to use this technology. This means that any person or company can try to innovate and do something new, without asking permission and without paying royalties. We have learned from innovations like the Internet that this is extremely useful and powerful.
And this is exactly what Blockstream is trying to take away from Bitcoin.

A patented technology, owned by Blockstream (or any other company) should never become part of the "Consensus rules", because the moment it does Bitcoin loses its ability to out-innovate the competition.

How can we solve this?

The obvious solution is to not activate SegWit or other technologies from Blocksteam. But we don't always know about patents before they get approved. There may be 18 months between the application of the patent and it being approved. And after it has been approved we may not even find it in the large number of patents that exist.

This is not a new problem, 10 years ago we, in the free software and open source community, finished a copyright license that tried to address the patenting issues. The GNU Public License version 3] has a patent clause. It recognizes that companies like Blockstream will have to publish code for others to run in order to make anyone actually use the technology they wish to patent.

Any company that publishes code under the GPLv3 gives unlimited and never expiring license to run that code to anyone that wants it. This includes a license to use any patents that cover that open source code.

How would people feel about we start to insist that our full node client of choice has a similar clause in the copyright notice. And reject any technologies that are not implemented in that client, and published explicitly by the owner under the license that has a patent clause. This may be useful to insist on for 2nd layer technologies too, like for instance the Lightning Network.

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Re: A simple explanation of why its bad for Blockstream to own Patents on Bitcoin consensus technology.

Tue May 02, 2017 11:38 pm

We learned last week from the Rick Falkvinge article is that he believes that blockstream has patents pending in segwit, no proof apart from his years of experience in similar matters.
Do you know of any patents registered by blockstream?
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TomZ
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Re: A simple explanation of why its bad for Blockstream to own Patents on Bitcoin consensus technology.

Wed May 03, 2017 9:39 am

We learned last week from the Rick Falkvinge article is that he believes that blockstream has patents pending in segwit, no proof apart from his years of experience in similar matters.
Do you know of any patents registered by blockstream?
Gregory Maxwell aka nullc admitted in public that they have patent applications and he mentioned two;
We have applications on confidential transactions and pegged sidechains, and provisionals on confidential assets, and a kind of zero knowledge proof for withdraw security that doesn't violate privacy.
here; https://www.reddit.com/r/btc/comments/6 ... r/dh295i8/

It is important to realize that patents are submitted privately by lawyers and handled privately. Only late in the process will they be made public. So for 18 months (or longer) the patents will not be public and it is in the best interest of BlockStream to hide the fact that they applied for patents.

So we know blockstream is patenting Bitcoin technology, and while I don't claim to know BS owns patents on SegWit specifically, but its a really good bet based on the facts.

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