tZERO, a blockchain start-up has recently won a blockchain patent for a technology solution that could noticeably ease the complex process of trade audit. The United States Patent and Trademark Office (USPTO) has recently awarded this patent to tZERO.
This is a significant development since it demonstrates that the blockchain technology can make key differences to processes as complex and crucial as that of trade audit. It’s also heartening to see how blockchain start-ups like tZERO are going full steam ahead to protect their valuable blockchain innovations via the patent route.
Trade audits are important. Stock markets and commodity markets worldwide strive to uphold transparency since, well, transparency is absolutely vital for a vibrant market! Trade audits pave the way for this transparency, therefore, one can’t overstate their importance.
It’s not easy to conduct an effective trade audit, though. Large markets like important stock exchanges have a high volume of transactions, and the data feed is too voluminous. Recording this data securely and facilitating easy access to auditors can be very hard.
This audit trail is important for an effective trade audit since regulators like the United States Securities and Exchange Commission (SEC) pay close attention to them. Given the growing volume of trade, existing technology solutions need help to keep up with the onerous task of maintaining secure audit trails.
This is where blockchain with its immutability of records can help. The technology offers transparency, moreover, blockchain smart contracts can uphold contracts effectively. This makes the patent by tZERO important.
A potentially important blockchain patent
tZERO had filed a patent application for their Time Ordered Merkle Epoch (TOME) methodology. This methodology will allow them to record time-series data, additionally, it will allow them to verify this data using digital signatures.
Trade data such as that of trade executions and settlements come in quickly, however, these are sensitive data that must be secured. The trade audit process relies heavily on the accuracy as well as time availability of this data.
With its TOME methodology, tZERO will be able to record this data in private blockchains, after verifying them using the digital signature. This approach ensures data privacy.
Moreover, tZERO will also be able to create a cryptographic hash of this data and anchor that in a public blockchain. This effectively means that verified trade data with a clear audit trail is secure, and a fully decentralized public blockchain further assures that such audit trail exists.
What’s more, with the decentralized distributed ledger of blockchain, a team of trade auditors can easily access the audit trail of trade data. The TOME methodology could significantly enhance the process of trade audit, thanks to these powerful features!
Steadily innovating around blockchain!
tZERO is a key blockchain innovator in the capital market space, and the company is a subsidiary of Overstock, the eCommerce giant. Apart from a well-received ICO in December 2017, tZERO has also received sizeable investments from GSR Capital, a Chinese private equity firm.
Key blockchain innovations like the aforementioned blockchain patent for the TOME methodology indicate that tZERO did indeed deserve the funding!