The past 12 months have seen a range of patent applications focused on cryptocurrency or blockchain applications, including some from notable firms such as banking giant Bank of America and credit scoring giant FICO.

In sum, the flow of patent filings witnessed in the last year demonstrates that some of these major businesses are seriously weighing how the tech could change how they operate – or, at the very least, serve as a basis for new intellectual property.

Below, we look at some of the more notable (and proposed) uses of the technology from the past year, from the controversial rewriteable blockchain to a proposed system for exchanging cryptocurrencies from Bank of America.

BofA Exchange?

It was perhaps an unexpected patent award from one of the top banks in the U.S.

Released earlier this month and tracing back to 2014, Bank of America’s proposed cryptocurrency exchange patent would, if fully realized, let users exchange a government-issued currency into a cryptocurrency. From there, as detailed by the filing, the user could then move into another crypto of their choosing.

The exchange would use three distinct accounts to act as temporary stores for each type of currency, with the first holding the user’s fiat, the second holding one type of cryptocurrency and the third holding the other one.

While it’s clear that Bank of America is unlikely to be launching its own crypto-exchange anytime soon, the filing and subsequent award from this year nonetheless illustrate the kinds of applications being looked at within the financial sphere.

In a hypothetical future in which cryptocurrencies are used widely, the idea of walking down to your local bank branch to move from one digital money to another may not be so far-fetched.

The ‘Editable Blockchain’

Accenture secured a patent this year for an editable blockchain, a concept celebrated by some and sharply critiqued by others.

The idea is that permissioned parties to a distributed ledger could, under certain conditions, alter the data that’s been added in the event that it has been altered or is subject to fraud. Proponents say that it allows a critical degree of control that would, if called upon, be used to essentially keep the books clean from unfriendly parties and their transactions.

Yet critics deemed the idea controversial, stating that the concept flies in the face of bitcoin’s essentially open-door policy, in which any party can download a load, broadcast transactions and add their data to the blockchain.

Ultimately, the editable blockchain patent perhaps illustrates the varying perspectives seen in the industry today – as well as the different ways in which the technology could be used and modified by participants in the space.

FICO watchdog

Is one of the biggest credit monitors getting into the bitcoin game?

That was one of the prevailing questions stoked by a patent application from FICO published in September. It outlined a method for detecting “illegal” cryptocurrency transactions, boasting a method for determining whether they are either fraudulent or part of a money laundering scheme.

The patent notably explained that the system would collect data from bitcoin exchanges, using that data to develop a “threat score” for each transaction. Transactions with higher threat scores would be flagged, allowing them to be reviewed before tracking them to their destination.

While it’s not clear if FICO has begun tracking bitcoin exchange data, the filing showed that major financial firms outside of banks, brokerages and investment firms are exploring how the tech might impact them – and the kinds of functions they may serve in a possible future of wholly digital currencies and assets.

ATMchain?

One of the year’s more notable filings came from China UnionPay, the payment card and ATM giant.

As illustrated by documents from the State Intellectual Property Office – the Chinese counterpart to the U.S. Patent and Trademark Office – China UnionPay is looking at how it might connect its ATM networks via a blockchain.

At its heart, the proposed system would use blockchain as a kind of global clock, leveraging it to synchronize the ATMs and the mass amounts of data they process.

The company has not yet stated whether it is actively pursuing blockchain to connect its ATMs, but China UnionPay noted in its application that the security provided by the tech could solve a major problem its network faces.

Currency Trading

Is the “father of financial future” getting into crypto?

Such a potential was raised in a patent filing for a hardware device that enables cryptocurrency trading, given that one of its listed inventors – economist Richard Sandor – is credited as having pioneered the financial product in the 1970s. Sandor is a former Chicago Board of Trade chief economist and vice president.

The device described would tie digital currencies to derivatives contracts, ensuring security by placing the registry in a repository that is not publicly accessible. However, the registry would function as a mechanism for delivering the cryptocurrency.

Sandor’s involvement was a notable aspect back when the filing was first made public. However, recent regulatory developments in the U.S. have perhaps brought the proposed invention back to the fore.

Less than two weeks ago, the CFTC released its proposed definition of what constitutes a “physical delivery” of a cryptocurrency. While that definition is still subject to public comment and possible alteration, the agency is moving closer to a formal policy after months of wrangling.

As a result, proposed inventions like this one (or something similar) could play a key role in helping exchanges provide “physical” delivery of something that is entirely digital.

Derivatives Mining

CME Group launched its first bitcoin futures contracts on Dec. 18 – and a filing from earlier this year suggests that it could create products aimed at specific parts of the cryptocurrency ecosystem.

Mining is an energy-intensive process by which new transactions are added to a blockchain, which also results in the minting of new coins as a reward. Put more simply, miners burn a lot of power to run their machines in a bid to – hopefully – add a block or two a day at the very least.

Yet the unpredictability of mining – variance and luck do have an impact – has attracted CME, which, as illustrated by its patent filing from April – outlined a way for miners to hedge some of their risks through derivatives.

Miners could hedge their bets by guaranteeing a payout if the network’s hash rate grows more quickly than expected (thus increasing the difficulty of finding a new block).

If the miners do make what is expected, or the hash rate grows more slowly than planned for, the contract would then expire. While the miners would not receive any money from it, they would be able to generate more profits through the mining process than originally planned.

Disclosure: CME Group is an investor in Digital Currency Group, CoinDesk’s parent company.

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