Western Union, that stalwart of American Logistics, that company that was so dismissive of Bitcoin, has been granted a patent on a virtual money exchange. They do say that the best gamekeepers are former poachers, so let’s look at the facts. On the first of April (yes, April Fool’s Day) of this year, the US Patent Office granted Western Union a patent on an exchange for “alternative currencies.” The patent (8,688,563) is technically for “Alternative value exchange systems and methods.” And while it was filed in October 2009 — nearly a year after the original Bitcoin paper — it was before people were really talking about Bitcoin. So the filing doesn’t mention Bitcoin, but does mention many of the more popular digital currencies that came before it, (mostly from online games) as well as local currencies, which have become increasingly popular.
[dropcap size=small]W[/dropcap]U goes on in the patent to describe their concept of an “exchange of value”:
“There are many different types of alternative currencies (herein also “alternative forms of value” or simply “alternative value”), each currency representing what the community holds valuable (e.g. time, labor/skill, goods/services, etc.). Alternative currencies currently in use include: “LindenDollars”—Second Life; Amazon.com’s “Quest Gold”; World of Warcraft’s (WoW) virtual “Gold”; Ithaca Hours (Ithaca, N.Y.); Carbon credits; regional currencies in Germany; “Dotz” (Brazil); Tradebank “Credits” (Construction-centric barter network); “Lasso bucks” (Time/Skillset currency); Maha Vitaran—Indian power utility barters with other utilities for power; “Bartercard”—Loaded with goods & services (not cash), used in exchange for other goods & services. Many others are planned or currently in development.”
The fact that Western Union has been granted a patent does serve to remind us that companies, even those that have mocked us, are governed by profit, and don’t want to miss the next big opportunity. Here, however, may lie the difficulty: exchanging one form of currency for another is not a new idea. In fact, it’s a very, very old idea. If you read the actual claims of the patent, they’ re basically describing the same abstract idea of any currency exchange platform — having people offer to exchange currency, determining the values of the different currencies, and determining at what “price” to do the exchange.
It’s unclear exactly what Western Union will do with the patent — the company itself has mocked Bitcoin — but it does remind us that there’s likely to be a growing number of patent battles in the Bitcoin space before too long. eBay has also received some attention for seeking a patent on a Bitcoin currency exchanger — but that’s still an application that has yet to be approved. Still, there are a lot of others rushing in to patent aspects of Bitcoin, and I imagine it’s only a matter of time until some entity, having nothing to do with Bitcoin, seeks to claim key aspects of Bitcoin as its “intellectual property.”
That’s the thing with a winner; everyone is on board. That’s the thing with winners, everyone remembers that they predicted it, few remember that they rubbished it. In journalism, failure is dismissed, and success is ignored.