KRNC, a blockchain initiative funded by the U.S. government, announced today that it has obtained the first U.S. patent on its proprietary technology for integrating blockchains with the legacy banking system.
The technology, called Proof-of-Balance, allows anyone with online banking to unlock cryptographic tokens in proportion to their fiat savings. These tokens have the same verifiable scarcity as Bitcoin, and they can be used to interact with smart contracts and decentralized applications.
“Proof-of-Balance brings blockchain technology to the billions of people who already have online banking,” said Clint Ehrlich, the founder of KRNC, who is credited as the inventor. “It lets them start using DApps without having to buy any cryptocurrency.”
On blockchains like Bitcoin and Ethereum, users must mine or purchase cryptocurrency to cover the cost of executing transactions. Proof-of-Balance eliminates that requirement by issuing tokens directly to the owners of fiat money.
The decision to award a patent was announced by the United States Patent and Trademark Office in a Notice of Allowance. The notice means that the application “Cryptographic and Fiat Currency Mechanics” is approved and a patent will be issued.
The patent office cited several advantages of Proof-of-Balance over the existing state of the art, including its superior security. By spreading ownership of tokens among the entire public, the technology provides far stronger guarantees of decentralization than protocols whose native assets are sold to the highest bidder in ICOs.
Funding for the development of Proof-of-Balance has come from the National Science Foundation, an independent agency of the U.S. government. Last year, the agency awarded KRNC a $225,000 grant to commercialize the technology.
KRNC is an NSF-funded blockchain for upgrading fiat money using Proof-of-Balance technology. The blockchain is being developed by a private company, Krnc Inc., for release as a fully decentralized protocol. To learn more, visit krnc.io.