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Open Crypto Alliance’s Jed Grant: ‘The Patent System We Have Today Hinders Innovation’

6 mins
Updated by Ana Alexandre

In Brief

  • BeInCrypto had a talk with the Open Crypto Alliance advisory board member Jed Grant.
  • The problem is centralized companies will always be attackable.
  • "The patent system we have today hinders innovation," says Grant.
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Despite the world’s trust in centralized systems, the Open Crypto Alliance (OCA) advisory board member Jed Grant asserts that modern society’s shift to favoring decentralized systems is inevitable. 

“Things will change, there is no doubt about it,” says Jed Grant. “To lose hope would be wrong — there will be change.”

He cites big problems with centralization and the benefits delivered by decentralized systems like Bitcoin (BTC) as catalysts to this change. 

“The problem is centralized companies will always be attackable. And these companies that build on Bitcoin, like Zap, are what patent trolls with their pirated and quasi-valid patents will go after. They can attack companies and extract a tidy sum in fees, create costs and ultimately demand perpetual royalties. Bitcoin is not attackable as it is truly decentralized. There is no company to sue, and it is present in so many countries. Even though people claim that mining is concentrated in China making it less decentralized, it’s still decentralized,” Grant continues.

Some say that Bitcoin, with a majority of its mining power located in China, faces a potential hijack risk. But Grant disagrees:

“The argument that China could control Bitcoin, because they have so much hashing power, is not true. China-based miners can roll out blocks, start messing with the chain, and basically launch a 51% attack anytime.”

Grant goes on saying that “some fear that the Chinese government would demand this. But this would only cause a hard fork. The fork outside of China will be Bitcoin. And there will be China BTC which will be whatever mess they make with their mining power. Then we have this China BTC which nobody wants, it will go down to zero bucks or ten bucks and bitcoin will keep going on.”

“Bitcoin is safe. As long as there is enough mining power in other countries, it’s good. We already passed that tipping point.”

True enough, the success of bitcoin has led to a global trend, even a frenzy. Along with its rise, came a wave of public awareness of the concept of decentralization, and decentralized finance (DeFi), among others.

Decentralization is nothing more than a marketing trick

Grant warns that these concepts are now being used as marketing buzz words, and not all who claim these domains would, in fact, fulfill the principles behind them. 

“There are so many companies in the DeFi industry claiming to be decentralized, but are not,” Grant says. 

“If there is a company controlling decisions, or even if a project has 20 nodes running their network, but the nodes are controlled by a small group of people, this is not decentralization. If you have four different groups running the network but the nodes are hosted all on AWS, Amazon could take it down at any moment,” he explains.

Grant points out another promised benefit of decentralization — censorship-resistance. Without having to understand what’s under the hood, it is in this aspect that ordinary users are likely to notice that a platform’s claim of decentralization is nothing more than a marketing trick. Grant shares:

“One of my friends is really big on decentralized video sharing, and he told me that a number of platforms in the last 48 hours have gone down or are starting to take down a lot of content. He wondered how this was possible, how he thought they were decentralized, and uncensorable. Apparently, they were not.”

“Even Ethereum (ETH) is questionable. Despite its promise of decentralization, there’s the Ethereum Foundation which can instigate decisions and greatly influence what happens with the source code. We’ve seen this before in the case of the DAO hack. The rollback that followed led to the birth of Ethereum Classic (ETC),” Grant stipulates.

Building truly decentralized solutions

This is the problem where the big patent holders can go after. The answer to that is, you need to build open, truly decentralized solutions. And when you build this, how do you get paid?

Most of the time, the reason companies do things with blockchain technology is to get money out of that system — nothing wrong with that. But if you truly build something decentralized, it’s hard to monetize that.

“Decentralization is using technology to enable a large number of self-sovereign entities — big or small — to cooperate. This is the ultimate vision: projects with governance but no government. People need to understand libertarianism which is based on self-reliance and understanding, that we’re all responsible for our own actions.”

To understand the problem with patents in a world where open collaboration and freedom to innovate is an absolute necessity in many aspects of society, one would need to do quite a bit of digging.

But Grant gives a pretty clear image of the big picture saying, “If I have a patent, I can make you an intellectual slave. You have to pay me in order to be able to use it. And that is the problem. Patents are being used by people who don’t practice. They’re being held to prevent others from doing something rather than encouraging innovation.”

“The patent system hinders innovation”

“The patent system we have today hinders innovation,” he continues. “We need to look at things from the perspective of self-sovereignty and self-reliance, of becoming an independent self-responsible entity, of libertarianism, the freedom to create, and enjoying this freedom to operate to the maximum.” 

“Patents — they are pretty much against all of these principles. And we want to get rid of the bad ones. Bitcoin has no organization behind it. There is nobody looking out for the Bitcoin community from a patent defense perspective,” according to Grant.

To help foster the shift towards true decentralization, the freedom to create and collaborate for open innovation needs to be unhindered by patents. In order for this to become a reality, there is an urgent need for a strong entity that would take a stand against patent bullies. And this is why Grant and his colleagues created the OCA.

Fighting abusive patent applications

“OCA is brand new. We founded OCA in December 2020. Which is why we need publicity and support, to get moving as quickly as possible. Marc Kaufman and Jean-Paul Wagner, both on the advisory board, are looking at patents already. We have a forum area for members on the website to discuss. We want to be very open and transparent on which patents we go after. And we want to work with engineers to crowdsource a database of ‘prior-art’ that can be used to fight abusive patent applications before they are granted,” Grant further explains.

According to him, the alliance is currently raising at least $30,000 to start. The next milestone is set at $100,000 so they can start taking actions. “Ideally, a company or organization would come in and donate, say, $200,000, and then more companies would do the same,” says Grant and continues:

“Together, we can build a strong alliance of companies with the resource and capability to take on patent bullies on behalf of all the little guys in the world.”

Grant points out that there are enough global tech giants that share the same principles in terms of patents and open collaboration, such as Square and Tesla. Such companies coming together for a single social good objective would, in fact, put up a really good fight. Grant states:

“Tesla basically opened all their patents — or a large number of them — and said that they wouldn’t be suing people using them. It’s like they put them under public domain. Elon Musk can understand what we’re doing. I tweeted him, but probably won’t get a response. There are also plenty of companies in the crypto space, as well as large mining pools.”

“They have a clear incentive to support us as we can protect their business ultimately. At this point, Bitcoin Cash and BSV could file patents against Bitcoin to reduce the hash rate. BitFury and some of the larger mining pools could support us because we are protecting the technology that they use to generate their income,” Grant concludes.


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