The FT’s Tracy Alloway
reports todaythat the U.S. Patent Office has
publisheda filing from JP Morgan regarding a payment service that some have some are saying bares a striking resemblance to Bitcoin.
But the filing is actually a renewal of a patent first filed in 1999 — meaning it significantly predates that digital currency’s breakout success.
But even if you were still inclined to dig into the patent itself, you’d discover that there are really very few similarities between Bitcoin and JP Morgan’s system.
The system is basically a form of repackaging the electronic credits you already use to pay for stuff online. The only new wrinkle is a Payment Portal Processor that will be tied to a digital wallet that can hold your electronic credits. The “PPP,” as its referred to in the patent, will be able to “store miles, coupons, sweepstakes or other marketing incentives associated with use of the accounts linked to the PPP.” It will also “[enrich] the consumer e-commerce experience by eliminating the tedious process of tilling [sic] out lengthy payment and shipping fields as this is done automatically.”
This, in turn, will help merchants, “since research indicates that most e-commerce purchases are abandoned at the [point of sale] due to consumers’ unwillingness to complete lengthy forms or provide personal credit card numbers. Furthermore, the automatic form filling features of the PPP enhanced Wallet reduces shipping errors, as the ‘ship to’ address is automatically filled in, eliminating manual entry errors.”
Under JP Morgan’s system, your account will still be tied to your credit or debit cards, and your payments will still be processed by the same Electronic Funds Transfer network used to process payments today. Bitcoin, on the other hand, relies on peer-to-peer exchanges, meaning it’s completely decentralized. And it uses souped-up encryption, which makes both parties in a transaction anonymous and makes the entire system difficult to hack. JP Morgan’s system does nothing for security enhancement. To authenticate the payment from the user, a bank can require, ” a software certification, an encrypted PIN, or the mother’s maiden name of the consumer.”
Bitcoin has a public record of all transactions that can be viewed on a site called Blockchain, JP Morgan’s system contains no such provision.
JP Morgan’s system wants to turn this:
Into this — but there is nothing truly novel about all the other boxes you see:
We’ve reached out to Denis O’Leary, the first name on the patent, for comment, but have not received a response.
In short, we don’t really know what if anything JPMorgan is thinking with this patent or if they end up rolling it out at all (mot patents go nowhere).
And there was more evidence that this patent was collecting dust somewhere and some lawyer believed it might be a good idea to re-file: for instance, the patent references “Netscape Navigator” and “Palm Pilot.”
Whatever this ended up looking like, it wasn’t Bitcoin.