TAAL licenses nChain IP portfolio for 10 years to advance new blockchain era

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TAAL Distributed Information Technologies Inc. announced this week it has signed a million-dollar IP licensing agreement with blockchain software development firm nChain. The 10-year deal gives TAAL non-exclusive rights to key elements of nChain’s patent portfolio, allowing it to develop and expand the use of blockchain infrastructure.

The deal is worth US$1,000,000 and provides access to nChain’s entire transaction-processing patent portfolio, with flexibility to add nChain’s ongoing transaction-processing innovations over the lifetime of the deal. The patent portfolio covers nChain’s world-leading research in the areas of specialized blockchain transaction handling, processing, storage, retrieval and display.

In an interview with CoinGeek, nChain CEO David Washburn said TAAL was initially interested in licensing only a few key pieces of his firm’s IP. “However, as the team spent more time in discussions with nChain’s research department, the licensing scope continued to grow.”

“nChain has over 1,000 patents pending and granted covering more than 230 unique inventions,” Washburn added. “TAAL is a leader in processing specialized Bitcoin transactions, and with them on board, nChain is even better positioned to provide the full spectrum solutions that our enterprise clients demand and deserve.”

Deal allows TAAL to extend, expand services and guarantees

This knowledge is essential to TAAL’s mission to build an ecosystem based on transactional processing fees for Bitcoin and blockchain. This infrastructure, with new hardware and software to handle it at volume, gives TAAL the opportunity to provide its clients guaranteed service levels and volume-based contracts.

Speaking to CoinGeek, new TAAL CEO Jerry Chan said he believes the deal will give his company a significant edge over its competitors. This includes others working in the Bitcoin SV (BSV) space.

Before this year’s block subsidy halving events, transaction processors depended heavily on these regular payouts to make a profit. As Satoshi Nakamoto always intended, this dependence is becoming less feasible over time—relying on Bitcoin prices to rise in sync with block subsidy drops is a poor business strategy.

“There are some in BSV space that seem to realize that they need to make the transition,” Chan said, “but so far none of the traditional BTC mining operations have indicated that they have any idea of what to do. I do not think they can adopt the transaction processing model of business simply because (Bitcoin Core) BTC cannot scale to any levels where the transaction fees would be able to sustain the network infrastructure costs. I doubt any of them can make the change to transaction processing until they realize that they are supporting the wrong Bitcoin platform first.”

Transaction processors must find new models or they’re just gambling

Transaction processors who were unable to find new solutions would find it more and more difficult to stay profitable, Chan added. This struggle to compete with similar businesses on the old model would eventually lead to “a race to the bottom,” and betting on rising Bitcoin prices “is just gambling.”

You have to continually improve the computational efficiency of the mining rigs and reinvesting more capital to upgrade your fleet just to maintain the same profit margins. Therefore the only way the industry can grow is literally by the coin price continuously going up. But we have a word for asset prices which constantly go up without any fundamental utility value. It is called a bubble.

Chan has previously referred to the current conditions both in Bitcoin and the wider economy as “a new economic regime” that would redefine the role of transaction processors such as TAAL. This is one of the reasons the old expression “miners” no longer accurately describes their operations.

Under the leadership of CEO Washburn, nChain continues to lead the way in developing enterprise-grade blockchain solutions. Having supplied its talent to developing and releasing the Bitcoin “Genesis” protocol in 2019/2020, its team is building the new “Teranode” implementation which specifically targets large-scale data users.

It looks like the innovation on Bitcoin SV is only set to get better and more targeted to enterprise adoption with these two leading blockchain companies collaborating.