Summary: Since the beginning of the United States patent and trademark office (USPTO), individual and corporate inventors have used the system of time-limited, controlled intellectual property (IP) protection for a very singular purpose. This purpose is to control market share in a new field of invention in order to recuperate costs of research and development. In addition, it is also for growing the network and reaping monetary rewards for a technological innovation they are individually responsible for creating.
The ideology behind the USPTO was simply to allow inventors a reward for innovating and to protect that technology from imitators. Prior to this, novel innovations were rapidly imitated, beat to market or competed out of market by a tragedy of the commons (if everyone can copy it for free, everyone will). This negative force led to widespread loss of innovation and diminished capital expenses in research and development due to this market theft of intellectual achievements. Innovation was halted by greed of the unscrupulous imitator. Science and technology could not progress in such a system. Currently, the US is in a trade war with China for widespread violations in regard to IP theft.
In today’s cryptocurrency market, where monetary policy and currency itself are being rapidly reinvented, old market forces of greed and self-centered financial gain have again risen through the exploitation of the nature of open-source distributed networks. Any given open-source, or ‘free-to-fork’ crypto platform can be downloaded publicly, rebranded and used by any capable cryptographic programmer for their own monetary gain. This has led to a fully saturated market of imitative blockchain wannabes promoted by self-indulgent financial greed. In total, the majority of blockchain programs have done very little to solve the trilemma problems of scaling, speed and security.
Hedera Hashgraph (HH) is the first-in-kind cryptocurrency that actually resorts to this legal and intellectually protective measure in the USPTO by patenting the underlying Hashgraph algorithm. At first glance, many entrenched cryptographic enthusiasts regard this practice in the open-source community as a thoroughly repulsive feature and dismiss the totality of the network as self-fulfilling.
However, it is the firm opinion of this article that the feature of intellectual property protection of the Hedera network as given through the US patent office actually enables the hbar cryptocurrency with a first-in-class benefit. By protection of the US government and the International Court System, no one can legally imitate the crypto platform, thereby thwarting the tragedy of the commons of forking exploitation. In the process, HH is able to create a healthy, enterprise-ready solution of cryptographic security that is able to scale globally and create the first mass adopted database network of unprecedented security.
Discussion: In the fall 2017 of, a cryptocurrency fever spread throughout the world in an impressive global 24-hour, 7 day-a-week market frenzy that propelled the entire market of decentralized coins to unbelievably high prices and marketcaps. In the process the apex currency was bitcoin, achieving nearly a value of $20,000 US dollars. However, this was short-lived and eventually brought to a cataclysmic plunge after a short series of events.
One of those major events was the open-source bifurcation, or splitting, of the bitcoin core source-code into multiple rival cryptocurrency blockchains. These included bitcoin cash, bitcoin gold, bitcoin diamond, bitcoin unlimited, bitcoin classic and bitcoin XT. Since the inception of bitcoin there have been to date nearly 104 bitcoin-replicated projects. Although the majority of these coins did not achieve significant hashing power, meaning widespread use and adoption by miners and transactional agents, an incredible amount of confusion, rebranding and outright theft of the original bitcoin project had occurred.
Any sense of value on these networks was immediately jeopardized by the flagrant and allegedly justified copying of the network into a different base code. This has led to a discussion in some cryptographic communities about the necessity and deleterious effects of such a mechanism in the nature of the distributed database and open-source philosophy.
Bifurcating a database network, such as the bitcoin blockchain, is for the purpose of an update or code modification that may improve the previous network design. In the grand majority of these cases, the new networks offered very little improvement in the speed, scale or security of the blockchain. However, new coins were minted that copied the exact account balances of the previous bitcoin source ledger. This effectively allowed any previous owners of the bitcoin core cryptocurrency to have a doubling of their entire coin portfolio. This generated a strong economic incentive to create thousands of alternate blockchains in order to fabricate a multitude of imaginary wealth.
Trilemma: Despite the many years now since bitcoin’s inception in 2009, mass adoption has not occurred do the the trilemma, or compromise problem inherent in blockchain design. Global adoption is directly dependent, as all novel inventions, on the concept of making something better, cheaper and faster. In the world of distributed ledger technology (DLT), these features are best understood in regards to network speed, scale and security.
Yet, with the hundred or more rival DLT’s in the world, exactly none have achieved their goal of speeding the network, scaling it to the entire world of users, nor achieved a level of security requisite in global financial systems. The forks simply have not worked out. However, a multitude of useless coins remain in active daily trading in the hope that maybe, someday one of them will work out.
In the process of trying to improve the speed and scale of bitcoin, an innovative solution arose that could begin to achieve some of these optimized variables. The ethereum network was created a few years after bitcoin, and introduced a new concept of smart contracts. This novel solution to complex transactions, such as selling a house or car with transfer of title, seemed to make a quantum leap from the previous bitcoin network. Smart contracts represented an entirely new set of coding instructions not previously present in bitcoin’s blockchain design.
In the genesis of ethereum’s global platform, a new sense of optimism arose in hopes of solving the blockchain trilemma (speed, scale, security). Ethereum was able to increase the speed of transactions from bitcoin’s average 7 per second, to ether’s 15-20 transaction per seconds (TPS). However, in the process of speeding the ethereum database throughput, it still was unable to use any other design element to achieve the current state-of-art in the VISA network of nearly 1,700 TPS. Ethereum was still unsuited to meet the global financial technological (fintech) demands necessary to usurp the global payment settlement system of any kind.
Trifecta: Seemingly out of nowhere comes along Hedera Hashgraph in 2018, like a stealth fighter, with the greatest claim in all of distributed ledger technology. The claim being that it was not only capable, but proven capable in testnet, of achieving ALL the goals of DLT’s in regard to speed, scale and security. There was no trilemma to worry about. It was the trifecta, a perfect trinity of technological perfection. It boasted up to 100,000 TPS and an astounding 1.18 million digital signature confirmations per second! Now that really does sound impossible, but sometimes, the greatest breakthroughs in any technology have had this feature.
Remember the days before antibiotics? Or the time before aviation? How about going to the moon? Yes. Unfathomable, seemingly ridiculous claims that eventually, became undeniably true. Massive leaps of human understanding and technological innovation were behind these spectacles of collective human creation. Before antibiotics in the era of world war I, the majority of penetrating injuries of soldiers ended in a protracted, diabolical disease state we know now as sepsis. Slow, bacterial infection progressed until the immune system was overwhelmed with blood-borne pathogens was the norm.
However, when the brilliant discovery of sulfa antibiotics was finally achieved, it revolutionized the world of warfare, medicine, and human survival to a point that it has been hailed as one of the top 25 achievements of all human experimentation and science. Hashgraph is no different. It solved the trilemma by obviating it.
Yes. That is correct. It avoided the inevitable trilemma, or compromised solution, of letting security suffer for speed increase, or letting speed suffer for scaling. Hashgraph did the impossible. It found a mechanism of universal trust without sacrificing a single variable of the trilemma. However, in its effort, it also had to protect it. This is the final point in the discussion of what constitutes a reliable, turn key solution for a globally mass adoptive DLT that can solve countless problems of social, environmental, commercial and governmental distrust throughout the world.
Conclusion: In consideration of the former point of bifurcation potential of a distributed technology such as bitcoin, the idea of ‘forking’ was explored to demonstrate a point. The point is that splitting of a network, any network of value particularly, is a damaging process. In the case of blockchain, it has allowed only the most minor of improvements in speed, scale or security. In this process, the greed of the masses and the tragedy of the commons is so obvious to the astute and unbiased observer. Understanding this concept alone will be very predictive of success in investment strategies in cryptocurrencies.
To recap the point: understanding that all databases need updates at some point, in order to improve the technology is a basic understanding in computer science. For technological progress in the field of distributed ledgers to occur, a healthy ecosystem of research and development must be facilitated with all variables of value preserved in the system. Moreover, the most critical values of trust and clarity in the system must be made central to the design. By forking, or dividing, platforms that are meant to support the entirety of wealth and value in a society it must retain the utmost transparency and communication of their infrastructure and source.
If a network is forked moments after a multibillion dollar, multinational corporation places in distributed form the entirety of their intellectual property and net worth, that company will be at immediate risk of market confusion, risk and endangerment of value. Moreover, those intellectual assets would then be equally available on both networks with separate payment systems that would not be interconvertible. A disaster of the first order. This is the most important point in the entirety of this article.
The exertion of the USPTO process of intellectual property preservation is an utmost importance in the discovery and promulgation of novel technology in the world. It allows for a healthy and vibrant feedback system whereby inventors receive remuneration and security in their innovations. This creates a new order of functionality and preserves it through legal mechanisms. Hashgraph has done what every single major corporation, inventor and discoverer has by patenting their chief idea into a public forum through the USPTO.
The Hashgraph network have allowed themselves the ability to innovate without a tragedy of the commons, which would dilute, confuse and obfuscate the intended purpose. It would allow new tech to thrive without opportunistic cash-grabbing degradation of the network. The USPTO will assist in the process of revolutionizing financial technology without letting civilians and corporations from losing the mass of IP and value in a never-ending spiral of exploitive network divisions. Hedera Hashgraph demonstrates once again in this variable of cryptocurrency that IP protection is tantamount to security. It prevents counterproductive greed of the commons from corrupting the network and permits a new world order of prosperity and financial freedom.