Nokia patents encryption system to tackle rising crypto asset vulnerabilities

Mobile phone manufacturer Nokia has filed a patent for encrypting digital assets to increase their security. According to reports, the company applied to China’s National Intellectual Property Administration in June 2024.

The abstract for the patent shows that the system will be capable of encrypting digital assets using a first key. With the process, digital assets will have another layer of protection via encryption, making the encrypted assets inaccessible to anyone who does not have the key. For instance, an encrypted Bitcoin or ETH will not be accessible by anyone except those with the private key to the assets. Thus, they will not be susceptible to hacking like regular crypto.

The process extends to indexing the encrypted assets for identification and verification purposes and then providing the means of identification to the first entity. This means it could be possible to encrypt digital assets, use them for transactions, and only decrypt them after the transaction is confirmed.

When successfully implemented, the proposed system could solve one of the significant challenges facing the crypto industry presently – the security vulnerability of digital assets.

According to Chainalysis data, over $2.2 billion was lost to crypto hacks in 2024, demonstrating the need for a more robust security framework. Experts have noted that this year’s 21% rise in crypto hacks is due to the market boom. Still, this is the fourth consecutive year that crypto hacks will exceed $1 billion.

Nokia is expanding its blockchain technology applications.

Meanwhile, the new patent represents an entry into digital assets for Nokia, which has been building its tech stack focusing on innovative applications. As far back as 2021, the company launched the Data Marketplace for enterprises to share and trade data and AI models online.

The Data Marketplace, powered by blockchain technology, is just one of several ways that Nokia has been building its technology portfolio. Since losing its dominance as a mobile phone maker, the company has been making giant strides in other areas, such as the Internet of Things, mobile communications, and 5G.

While securing the patent does not guarantee that the company will eventually develop the system, getting approval for the patent proves the idea’s viability. Even if the company does not develop the idea, its patent could form the basis for further development and improvements in securing digital assets.

Traditional firms developing technology for the crypto sector

Nokia is just one of the several traditional companies that have been dabbling in creating technology for the crypto industry. While companies like Sony have been focusing on using existing blockchain technology, others are also developing technology for the sector. In 2021, Microsoft filed a patent for a human-powered crypto-mining system, and Apple also has patents that imply the potential use of blockchain technology.

While these companies have yet to use any of these patents, one company that has been actively developing technology for the industry is payments giant Mastercard. This is unsurprising, given that Mastercard is one of the most active traditional participants in the industry.

In late September, the company filed two patents for a system that will facilitate trustless payment transactions using smart contracts and a system for converting crypto to fiat. Mastercard already has several crypto-related applications within its ecosystem, and judging by the several other patents it holds for everything from blockchain ticketing to fraud detection technology, it has lofty goals in the sector.

Meanwhile, Switzerland-based VPN and email service provider Proton recently launched a self-custody crypto wallet focused on privacy. The Proton Wallet is integrated into its ecosystem, allowing users to send Bitcoin using email addresses. It also rotates public addresses for each transaction, ensuring users’ privacy as it makes it impossible to track all transactions associated with a public address on-chain.

Given the growing mainstream adoption of crypto, the growing interest from these traditional companies is unsurprising. With the industry enjoying more political support than ever on the back of a massive rally, the growth potential has made it attractive for many traditional institutions.

From Zero to Web3 Pro: Your 90-Day Career Launch Plan