So-called blockchain company Veritaseum sues Coinbase for patent infringement and is seeking $350 million in damages. When I first saw this news, the name of the company that is suing Coinbase caught my attention. One of my favorite youtube channels is called Veritasium. It creates very intersesting science related content. Please don't confuse the two.
The founder of Veritaseum filed a patent infringement case against Coinbase and alleges that Coinbase had used his patent for secure digital transactions. I have never heard of Veritaseum before. At first I thought maybe this is one of the patent troll firms, whose mission in life is making money from patents they hoard without producing anything useful. Then, looking a little bit into Veritaseum, it looks like a company whose goal is profiteering from crypto revolution. They even have a token, VERI.
This is how their website answer to the question of "What is Veritaseum?"
Veritaseum is a highly disruptive revolution in finance, investment and value. It uses blockchain technology, smart contracts and distributed computing to aid industries and entities suffering from high economic rents, undue friction and gross inefficiencies.
At it's simplest, Veritaseum is the gateway to peer-to-peer capital markets. It allows any two or more individuals to deal directly with each other in transactions of value without reliance on centralized or authoritative third parties. They can do this without concern for typical legacy credit or counter-party risk.
They have a wall of text trying to answer this simple question. But I stopped here, and not interested in what they are selling. They portray themselves as innovators in payment systems, but what they are describing as phenomenal payment system has already been brought forward with bitcoin. Bitcoin was given to the world for free, without any patent nonsense.
I find stories like this hilarious and sad at the same time. It is funny how this lawsuit is about a payment system that doesn't require trust in third party when neither of the parties in this lawsuit have contributed anything to this. It has been Satoshi's bitcoin that came up with a working system that is revolutionizing money. Now these two hijackers of decentralization are fighting for rights over such system. That is the sad part. Unfortunately, the great movements for decentralized systems, trustless payments, web3 are being hijacked by entities that have zero contribution to these concepts and practical applications.
I have no sympathy for Coinbase for the same reason. Coinbase and its leadership have mislead many by using slogans about decentralization, when in their business and listing practices they haven't done anything to facilitate decentralization. In fact they have done the opposite. One of the examples of such actions is how they acquired one of the best crypto wallets BRD, just to get rid of a competition.
However, there are good thing that can be said about Coinbase as well. They have served as a bridge between the crypto and fiat world, which is also important in the early stages of the financial innovation. They have done a great job building a crypto brand. Nothing wrong with seeing opportunities and building a business in the crypto world. The problem is the deception tactics of presenting themselves as something that they are not. They are not advocates for and facilitators of decentralized systems.
Veritaseum seems, of course, doesn't look any good either. Probably thousand times worse. What good purpose patenting a payment system can have? They don't even have their own blockchain. Correct me if I am wrong about this, but at the first glance it looks like their token is ERC-20.
Truly trustless payment or monetary system requires decentralization. Decentralization itself requires transparency and this transparency can achieved by open source code, not some proprietary patented system. I don't know how this lawsuit will go and what could be outcome. But I am pretty sure I wouldn't want to be using anything Veritaseum.
It also looks like Veritaseum had problems with SEC in 2019 and faced charges of running a fraudulent scheme. They ended up paying SEC $9.4 million for the company, and $1 million for charges against the founder in a settlement agreement.
What do you think about Veritaseum and this lawsuit? Does this lawsuit have any merits? Does Veritaseum has anything good to offer?
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