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Cryptocurrency Laundromat?

7 March 2018

U.S. Patent No. 9,135,787

BITCOIN KIOSK/ATM DEVICE AND SYSTEM INTEGRATING ENROLLMENT PROTOCOL AND METHOD OF USING THE SAME

For the cash laden or those eschewing credit, U.S. Patent No. 9,135,787 (the ‘787 Patent) offers a path into the world of digital cash or cryptocurrency.  The ‘787 Patent describes a standalone kiosk / atm machine that enables currency conversions between cash and cryptocurrency.

According to PTO Assignment records, the ‘787 Patent is owned by Enter, Inc. of San Francisco.

As illustrated in the flowchart of Fig. 3, the kiosk/atm of the ‘787 Patent allows for conversion of cash to bitcoin as well as exchanging bitcoin for cash.  (note: the Title refers to Bitcoin, but the specification more generally refers to cryptocurrency)

For receiving Bitcoin, the kiosk/atm confirms transfer account information, verifies monies inserted by the user into the kiosk/atm, and then generates a buy receipt.  The kiosk/atm maintains its own Bitcoin account, either using Bitcoin from its account, or going into the open market if needed. (e.g. Step 410 “Buy from Mt. Gox to fund transaction”).  The kiosk/atm then settles the transaction, transferring the Bitcoin to the user’s account.

For receiving cash, the kiosk/atm first confirms the user’s Bitcoin account and then generates a sell receipt.  A time delay is required between sell receipt generation and redemption to verify ownership.  Thus, after a predefined time period, the receipt is redeemable.  The ‘787 Patent includes numerous what-ifs for the process, resulting in cancellation of the sell receipt if the funds cannot be verified or preventing cash withdrawal if insufficient funds within the device.

The ‘787 Patent seeks to bridge physical currency with digital currency.  To prevent misuse of this bridge, the ‘787 Patent notes two required features: user identify verification with a biometric scanner and cross-reference with a database of “known corrupt or unsavory individuals.”

 

Independent claims 1, 5, and 11 require user verification with a biometric data being “a palm vein pattern.”  Where Independent claim 7 only requires the more general “receipt of biometric data via the biometric interface.”  But all independent claims (1, 5, 7, and 11) do require “connection with a database of known corrupt or unsavory individuals and, if said customers is in said database, deny the customer access to a transaction on said kiosk device.”

 

 

 

 

 

Interestingly enough, we find convergence of other blockchain technology.  Ripple Labs technology in U.S. Published App. 2016/0224949 can help reduce the Redeem Receipt verification time lag.  Bank of America’s U.S. Patent No. 9,825,931 can help improve the accuracy of the “database of known corrupt or unsavory individuals.”

 

 

 

 

 

 

This technology begs the obvious question :  if you place a bunch of these in a single building and you shield your clientele from being in the “database of known corrupt or unsavory individuals” could you call that place a currency laundromat?

 

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