Alibaba Blockchain Payments Patent Proposal For “Adjusting Account Balances” a Big Deal for Bitcoin
New Patent Proposal From Alibaba Wants To Eliminate Middlemen With Blockchain Technology
Alibaba is a major part of e-commerce in China, and they have recently been toying with the idea of incorporating blockchain technology. They want to increase the speed of their new international payments, and the use of blockchain is the major method that they cite in a recent filing for a patent.
The patent application is titled “A System and Method That Adjusts Account Balance on a Blockchain,” and it was filed back in January. However, the China State Intellectual Property Office only revealed the application on Friday.
Within this new change, Alibaba wants to introduce the ability of changing account balanced through a blockchain ledger. This switch would help to better process cross-border transactions. They highlighted how significant this switch would be for transactions that involve a third-party payment vendor. One situation that the document uses to demonstrate this is that the payment services and banking partners will basically take on a position as a node in the blockchain.
Each node keeps a record of the user’s balances for the third-party wallets. When a transaction is started, the nodes in the blockchain verify the user’s available funds, while they check for any compliance problems. This is a function that smart contracts have woven into the fabric of the blockchain already. Once the transaction goes through, then the nodes automatically update with the new balance of both parties, which means there is no delay in the time it takes to process.
Even though there is no explanation exactly if or when Alibaba plans to implement the system on a commercial level, there is a small coincidence in the industry that suggests that they might. A few days before the patent was published, Alibaba’s affiliate Ant Financial announced that they would be focusing on the launch of a blockchain remittance service. The system would let Hong Kong residents send money through a third-party vendor to residents in the Philippines.
To read the patent directly, follow go here.