How Blockchain Facilitates the Sharing of IP

Mergers and Acquisitions deals represent long and costly processes. A lack of transparency, legal knowledge, and security concerns undermine the market. This has stopped companies from utilizing the latest technologies and simplifying their business processes.

The M&A process to this day has yet to fully come online... the emergence of blockchain technology is changing this.

Now that the crypto space is blooming, entrepreneurs are looking to the space to see how old businesses practices can be improved. One area of interest is how blockchain technology can facilitate the sharing of IP.

IP is vulnerable, so owners are cautious

Today, tech giants profit from harvesting and sharing data (knowledge).

Thieves, hackers, and other bad actors seek such data or knowledge for themselves. No matter what safeguards are put in place, it seems inevitable that they will be beaten.

It’s no surprise then that the world of M&A hasn’t made the push into the digital world. Entrepreneurs prefer to keep their intellectual property close to their chests.

Companies file for patents and other IP rights to protect their assets. If they do decide to sell or share them they are often restricted to their own trusted networks. This means that a great deal of IP is being wasted or at the very least its full value is not being realized.

How does blockchain fit into all of this?

In the M&A space, the necessity to employ intermediaries is costly. Armies of legal experts, investment bankers, and other middlemen are required before potential buyers are contacted.

This has prevented small and medium enterprises from bringing their IP to the market as they can’t afford lengthy negotiations and often lack the legal knowledge to participate in the market without being taken advantage of or unwittingly breaking the law.

The advent of blockchain technology and smart contracts provides an opportunity to improve how the M&A space operates. These technologies can simplify the trade of IP by facilitating peer-to-peer transactions and providing an unprecedented level of security.

Immutable ledgers provide a record of ownership that cannot be hacked. This means that assets protected by blockchain technologies are far less susceptible to theft and counterfeiting.

Until now, these security concerns have discouraged transparency in the market, leading to an unwillingness of entrepreneurs to list their valuable IP online. 

In turn, this makes it harder for buyers and sellers to find each other and do business. There is a need for a better system and blockchain can provide it.

How blockchain facilitates the trade of IP

Currently, businesses looking to sell or license IP would have to use their own networks and search for a buyer themselves. This often requires the involvement of intermediaries. Plus, the wider the search, the costlier the process. 

A private and secure online marketplace would remove the need for this step entirely, allowing buyers and sellers to find each other without the need for a middleman.

Blockchain further simplifies the process through the utilization of smart contract technology. Smart contracts reduce friction in the process by allowing some steps (such as KYC verification) to be completed autonomously. 

This would otherwise usually require the involvement of other parties.

Modernization & Opportunities

If businesses don’t modernize, opportunities are lost, thus hindering innovation for everyone and benefiting nobody. If we can do things more efficiently, less expensively, and easier, then we should. And blockchain technology provides the tools to do just that.

At LEXIT, we recognize this and we are confident that our solution is going to disrupt the way IP is bought, sold, and licensed.  

Read about LEXIT’s ICO (launching June 19) today.

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