Michael P. Regan is a Bloomberg Gadfly columnist covering equities and financial services. He has covered stocks for Bloomberg News as a columnist and editor since 2007. He previously worked for the Associated Press.

The popularity of the blockchain technology underlying bitcoin owes much of its success to the fact it was meant to be open source, meaning the code was free for all to use. 

Don't expect that to last, now that Wall Streeters and an assortment of others with dollar signs in their eyes circle 'round the blockchain like a bunch of '49ers around a flash of gold in a creek.  A flurry of patent applications shows a wide assortment of ambitions to profit from digital currencies, some of them notable for their potential as game-changers and some notable simply for being adorable. 

Chain Link
Banks and other firms are racing to capitalize on the technology that underpins bitcoin.
Source: Bloomberg

Let's start, of course, with the adorable. An entrepreneurial inventor named Avrey Gross has filed an application to patent "a collectable object with a sealed cavity that contains a private key that grants the user access to cryptocurrency saved to an account when the cavity of the sealed object is visibly broken into in order to gain access to the cavity."

Did you follow that? If not, maybe the illustration that came with the application will help. It's basically a figurine of a dog that you break open to reveal the code for a digital currency:

Patent application 14/571251

Another intriguing patent application is for "attention based currency." Under this concept, people could "mine" digital currency if they listen to an entire song streamed over the Internet. The idea is to promote lesser known artists, but to be honest it also sounds like the best shot the Crash Test Dummies have had for a comeback in years.

Moving now to where the real action in blockchain is: Wall Street. These applications aren't as humorous, especially if you're employed in some corners of the financial world that could potentially get busted apart like that dog figurine. 

Bank of America wants to patent a system to make wire transfers quicker by using digital currency. And there are applications for patents to transfer digital currencies over social media, convert them to virtual assets whose value is backed by physical assets, use blockchain to validate health care transactions and various attempts to patent digital currency "wallets" and even "hot wallets," which presumably are just regular wallets that spend more time in the gym. 

Of course, no digital gold rush would be complete without those prospectors from Goldman Sachs. They have in their sights what much of Wall Street is salivating over when it comes to digital currencies and blockchain-like ledgers of ownership: trading stocks, bonds and whatever else someone is in the mood to trade, all without having to bother with clearinghouses and counterparty risk and whatnot. Goldman calls its digital currency "SETLcoin" in the patent application by co-head of technology Paul Walker, whose tech-geek credentials include a recent photo-op with R2-D2

Goldman's application shows an unbridled and, we're guessing, highly caffeinated Wall Street imagination left to run free. For example, what type of device do you need to trade SETLcoins? Well, take your pick:

The input device may include a keyboard and/or a pointing device such as a mouse. Other input devices are possible, such as a microphone, joystick, pen, game pad, scanner, digital camera, video camera, and the like. 

(You forgot astromech droids, Paul!)

Companies' stocks and bonds would get their own SETLcoins and could, at least in the land of patent-application imagination, be exchanged for other SETLcoins or bitcoins or any manner of digital currencies:

An SETLcoin wallet or transaction can house a single security, as described above, or multiple denominations of the same security (e.g., 1 IBM-S SETLcoin valued at 100 IBM shares). SETLcoin wallets or transactions may also house multiple securities (e.g., 1 IBM-S SETLcoin and 2 GOOG-S SETLcoins). SETLcoins are exchangeable for, e.g., other SETLcoins and/or other cryptographic currencies (e.g., peercoins). For example, a single IBM-S SETLcoin may be exchangeable for one or more "GOOG" SETLcoins (i.e., Google shares), for 13,000 USD SETLcoins, 100 litecoins, and/or for 5 bitcoins. 

Throw in startups like ItBit, Blythe Masters' Digital Asset Holdings, and dozens of other new companies seeking to use blockchain to disrupt back-office functions and it's clear Wall Street has caught digital currency fever. Who will end up being the winners and losers? Who knows, but Goldman being Goldman, we wouldn't bet too many SETLcoins against them.

But just to secure success, maybe if Gross gets the patent for his digital currency figurine, Goldman should buy it. That way they could give hedge-fund clients a Lloyd Blankfein bobblehead with some SETLcoins hidden inside so they have something to smash open on a rainy day

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Michael P. Regan in New York at

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Daniel Niemi at