A method enabling law enforcements, regulations, social, economic, and financial transactions and verifications on the blockchain

Abstract

In this invention, any information (instructions, events, happenings, invitations, societal interactions, histories, relationships, associations, memberships, affiliations, hierarchies, rights, privileges, requests, ownerships, obligations, liabilities, contracts, promises, identities, attributes, statuses, endorsements, qualifications, certifications, credentials, etc.) worth recording for later reference, transaction, verification, calculation, determination, and execution can be recorded into the blockchain system via electronic communications sent by law enforcement agencies, regulators, and other entities or individuals to the blockchain operators and guardians (nodes, miners, etc.). The blockchain system can then decide whether a transaction should be approved, whether to unfreeze a frozen account, how a smart contract should proceed and settle, etc. External systems can also query the blockchain system for facts, verifications, guidance, etc. This invention enables law enforcements, regulations, as well as social, economic, and financial transactions and verifications on the blockchain, and works in both permissionless and permissioned blockchain systems.

Description

A METHOD ENABLING LAW ENFORCEMENTS, REGULATIONS, SOCIAL, ECONOMIC, AND FINANCIAL TRANSACTIONS AND VERIFICATIONS ON THE BLOCKCHAINThis application claims all benefits of U.S. Provisional Application No. 63 / 434,038, filed on Dec. 20, 2022 (U.S. eastern time).BACKGROUND OF THE INVENTION

[0001] The invention pertains primarily to the fields of blockchain, cryptography, computer science, law enforcement, governance, finance, and economy. The decentralized nature of permissionless blockchain technology has allowed it to be used to facilitate criminal and illicit activities. This is because the related funds in the form of cryptocurrencies and tokens cannot practically be seized by law enforcement agencies or other persons / entities, unless the cryptographic private key of the cryptocurrencies and tokens has been discovered and seized. The decentralized nature has also made direct governmental regulation impractical In such a blockchain system, it has also been impractical for social economic, and financial transactions and verifications to happen with scale and diversity on the blockchain. This is because a permissionless blockchain system has not been good at communicating with persons or entities (of credibility or authorities) outside the blockchain system to receive trustworthy information to serve diverse social economic, and financial transactions and verifications. A permissioned blockchain is better (to some extent) at such communication, but comes with centralization. This invention solves the problem with a new mechanism (which works in both permissionless and permissioned blockchain systems) allowing law enforcement agencies or other persons / entities to communicate with the blockchain system to enable law enforcements, regulations, as well as social economic, and financial transactions and verifications on the blockchain.SUMMARY OF THE INVENTION

[0002] In this invention, law enforcement agencies, regulators, and other entities and individuals can communicate with blockchain (both permissionless and permissioned) operators and guardians (nodes, miners, etc.) to record any information into the blockchain and the software / databases of the nodes and miners, for later reference, transaction, verification,calculation, determination, execution, etc. The types of such information include instructions, events, happenings, invitations, societal interactions, histories, relationships, associations, memberships, affiliations, hierarchies, rights, privileges, requests, ownerships, obligations, liabilities, contracts, promises, identities, attributes, statuses, endorsements, qualifications, certifications, credentials, etc. The content of the communication can be written in any language (natural or encoded, complete or abbreviated), format, and fashion, which the nodes and / or miners software can be programmed to understand. Such a communication can be sent using digital signature signed by cryptographic private key or some other electronic methods like email The corresponding cryptographic public key (or derivative thereof) or email address or other identifiers have been stored in the blockchain or the software / databases of the nodes and / or miners, either by the original creator of the blockchain or by the consensus of the nodes and / or miners, after the law enforcement agencies or other persons / entities revealed such information to them. The nodes and / or miners verify the authenticity of the communication by looking up the email address or verifying the digital signature using the cryptographic public key (if found and obtained / derived from the record). If it is authentic, the nodes and / or miners broadcast such a communication to each other, store such a communication in the transaction pool or something similar, and record it into a new block which gets appended to the blockchain.

[0003] This enables law enforcements, regulations, as well as social, economic, and financial transactions and verifications on the blockchain, because in reference to such recorded communications, the blockchain system can decide whether a transaction should be approved, whether to unfreeze a frozen account, how a smart contract should proceed and settle, etc. The blockchain system can also be queried by other systems (either a blockchain system or something else) for facts, verifications, guidance, etc.DETAILED DESCRIPTION OF THE INVENTION

[0004] In a blockchain system, a user can initiate a transaction by communicating to a computer called node. In such a communication, the user claims he / she is the account (hereafter known as “cryptographic address”, which is either the cryptographic public key or derivative thereof) owner and the initiator of such a communication, by signing the transaction instruction using the cryptographic private key to create a digital signature. The node authenticates the communication by verifying the digital signature using the cryptographic public key. The node also verifies that the cryptographic address indeed has the balance to cover the amount of the requested transaction,by either looking up the associated transaction history in the blockchain or looking up the realtime balance in a ledger (showing account balances) dynamically maintained and updated by the node according to the blockchain and transaction pool (or known as mempool, etc.). If the requested transaction passes these two tests, the node broadcasts this transaction to other nodes and / or miners and put this transaction into the transaction pool which may contain other transactions. These transactions will be bundled and recorded into block(s) which will be appended to the blockchain.

[0005] A permissionless blockchain system is decentralized (to varying degrees depending on the number and diversity of nodes and miners), making it an ideal tool for criminal and illicit transactions and storage of the associated funds. There are technologies which may be able to figure out which cryptographic addresses are related to criminal and illicit activities. However, for law enforcement agencies or other persons / entities to seize the funds in the form of cryptocurrencies and tokens, they need to discover and seize the cryptographic private key held by the criminal suspects or convicts. The task of locating and decrypting (if the private key is protected via encryption) the private key can be very difficult (if not prohibitive) in reality because such a private key is just a string of mixed letters and numbers, highly portable and very easy to conceal It has also been impractical for governments and other entities / persons to regulate activities in a decentralized blockchain system, and for diverse social, economic, and financial transactions and verifications to take place on the blockchain.

[0006] In this invention, law enforcement agencies or other persons / entities can send a communication to node(s) and / or miner(s) of the blockchain system, requesting the full or partial balance of a cryptographic address (or the full or partial crypto balance locked in a smart contract, etc.) being either frozen or confiscated, or indicating whether a particular transaction or activity (such as a smart contract) can proceed either unconditionally or conditionally. Such a communication is hereafter known as a “flag”. The initiator of such a communication is hereafter known as a “flagger”. This works in payment-oriented blockchain systems, smart contract blockchain systems, and other blockchain systems. Such a flag can be sent with a digital signature signed using cryptographic private key or in another way of electronic communication such as email Initiation of such a flag can be required to be approved by multiple parties, similar to sending a Bitcoin transaction from a multi- signature wallet. Any other technologies related to cryptographic private keys and crypto wallets can be used for flags. Instead of specifying the recipient cryptographic address and amount of tokens to be sent in a simple transfer transaction request in a blockchain system like Bitcoin, the specification of a flag can include which cryptographic address or smart contract to freeze or confiscate balance from, how much of thebalance should be frozen or confiscated (may set the default as the entire balance), how long (may set the default as indefinitely) should the freeze last, to which crypto address should the confiscated balance be sent to, which smart contract should be added with what condition(s) or restriction(s), the reason for such a flag (e.g., why the balance was frozen), etc. Such a specification can be written in any language (natural or encoded, complete or abbreviated), format, and fashion, which the nodes and / or miners software can be programmed to understand. In such a blockchain system, the email address or the cryptographic public key (or derivative thereof) have been storedin the blockchain or the software / databasesof the nodes and / or miners, either by the original creator of the blockchain or by the consensus of the nodes and / or miners, after the law enforcement agencies or other persons / entities generated their cryptographic public key (just like how an end user generates a cryptographic public key to receive or send Bitcoins) or email account and revealed such information to the original creator of the blockchain or the nodes and / or miners by any form of communication. Alternatively, the original creator of the blockchain or the nodes operators and / or miners can generate the public key and record it (or derivative thereof) in the blockchain or the software / databases of the nodes and / or miners, and give the private key to the law enforcement agencies or other entities , although this carries the risk of the original creator of the blockchain or the nodes operators and / or miners keeping a copy of the private key and abusing the private key. In the case of email, if the original creator of the blockchain or the nodes operators and / or miners already know the email address (e.g., because the email address of a person / entity is public), they can record it in the blockchain or the software / databases of the nodes and / or miners. The nodes verify the validity of the flag by checking the existing blockchain and / or nodes software / database and / or miners software / database to see whether there is recorded authorization for such a flagger (owning such an email address or cryptographic address) to send such a specific type of flag. In the case of cryptographic address, the digital signature of the cryptographic public key can be used to authenticate that the flagger indeed is the owner of the cryptographic address. If the flag is valid, the nodes and / or miners broadcast such a flag to other nodes and / or miners, store such a flag in the transaction pool or something similar, and record such a flag into a new block (which may contain other flags and / or transactions) which gets appended to the blockchain. If the flag is sent via digital signature, the flagger may only need to send it to one or a few nodes and / or miners, because other nodes can independently verify the digital signature, without having to receive such a digital signature directly from the flagger. If the flag is sent via email or some other electronic methods, the flagger may need to send the flag to enough nodes and / or miners for the blockchain system to have confidence in the authenticity of the flag.

[0007] The law enforcement agencies or other persons / entities have achieved the intention because the criminal or illicit crypto balance holder(s) cannot spend the frozen or confiscated funds any more. And any activity (such as smart contract) will not be able to proceed if it does not meet the regulation(s) or condition(s). This is because any such attempts will be found invalid as nodes and / or miners software look up in the blockchain and / or the transaction pool or any database (storing such a flag) and find the relevant freeze or confiscation or regulation instruction. In the case of confiscation order, the partial or full crypto balance of the cryptographic address in question will be considered by the nodes and / or miners to have been transferred to a certain cryptographic address (specified in the flag), either controlled and owned by the law enforcement agencies or other entities, or victim(s) of the corresponding crime, or designated beneficiary of the matter. The balance will be usable by such a cryptographic address. If the confiscation order was initiated via cryptographic private key, the corresponding cryptographic address can be used as such recipient address. Similarly, law enforcement agencies or other persons / entities can send a flag to the nodes and / or miners to request unfreezing the frozen balance, or returning the confiscated balance, or removing the regulation(s) or condition(s) on a certain activity. In the case of returning the confiscated balance, the flagger does not necessarily have to send a flag, but can instead simply send the balance to the cryptographic address. It is viable to allow a flagger to freeze, confiscate, and regulate cryptocurrencies / tokens which have already entered into a smart contract (as a loan collateral, etc.) or some other conditional transaction, because such a smart contract or conditional transaction and / or the associated software thereof and / or the blockchain system can be pre-programmed to handle such a contingency (i.e., to know how the smart contract or conditional transaction should proceed and settle should such a flag occur). Of course, the person / entity does not have to have used the cryptocurrencies / tokens to commit a crime, in order for the cryptocurrencies / tokens to be available for freezing or confiscation. If the owner of the cryptocurrencies / tokens owes alimony, tax, property damage compensation, or is in any way financially liable (whether such liability has anything to do with cryptocurrencies / tokens or not), cryptocurrencies / tokens can be frozen or confiscated by law enforcement agencies or other persons / entities.

[0008] This invention can also be used to realize traditional financial, governmental, economic, and other social transactions and verifications on the blockchain. Here are some examples. A government agency can flag a cryptographic address to indicate the owner has the qualification to practice law as a lawyer in a particular jurisdiction. A new flag can be sent later on to indicate that the license has been suspended (either temporarily until a certain date or indefinitely) or revoked. Another flag can be sent later on to indicate that the license has been reinstated. Aperson / entity can hold a bank account of U.S. dollars, Euros, or some other currencies, and flag cryptographic addresses to indicate which cryptographic address owns how much of these fiat money. And the ownership of such fiat money can be transferred or sold (for the native blockchain tokens or something else) on the blockchain, etc. This is not limited to fiat money ownership. A person / entity can hold a gold or silver bullions vault, an oil field / reserve, a collection of sovereign debt securities and flag cryptographic addresses to indicate which cryptographic address owns how much of these assets / commodities. And the ownership of such assets / commodities can be transferred or sold (for the native blockchain tokens or something else) on the blockchain, etc. A maritime shipping company can flag cryptographic addresses to indicate which cryptographic address has right to how much of the company’s future shipping capacity. Such rights can be transferred or sold (for the native blockchain tokens or something else) on the blockchain, etc. If the maritime shipping company encounter problem(s) or for some other reasons want to shrink its future overall shipping capacity, the company can even use the native blockchain tokens or something else (which may or may not be registered on blockchain) to buy back some of those rights on the blockchain. To onboard the cargo, a person / entity owning such shipping rights can use the cryptographic private key to create a digital signature so that the maritime shipping company can verify the authenticity of the shipping rights. Similarly, things like ship tickets, train tickets, airplane tickets, movie tickets, soccer game tickets, prepaid utility (electricity, water, natural gas, etc.), and prepaid landline, mobile phone, and internet access can also be registered, transferred, sold, refunded / bought back, and verified on / using the blockchain. A department of veterans affairs can flag a cryptographic address to indicate that the owner is a veteran. A merchant can confidently hand out veteran discount after querying the blockchain containing such a flag, knowing their customer is indeed a veteran. Similarly, passports, driver licenses, and any other identity documents can be flagged into the blockchain. A flag like this is hereafter known as an “identity flag”. A credit bureau can flag a particular cryptographic address as having a certain credit score. When the owner of that cryptographic address tries to get a loan via a transaction either on the blockchain, or some other blockchain(s), or off blockchain, the lender can determine eligibility and interest rate based on that flag. Similarly, a credit agency can flag a cryptographic address owned by a corporation as having junk or investment-grade status (ratings like AAA and AA+). When that corporation use such cryptographic address to issue debt via a transaction (Decentralized Finance in smart contract, etc.), the lender (such as a pension fund) or any agent can determine appropriate interest rate based on that flag. The lender or any agent also knows whether regulations, laws, or other rules allow lending to such a borrower. The nodes and / or miners software can be programmed to either allow or deny a cryptographicaddress’s ability to make loan to the borrower, based on the identity flag (indicating a pension fund, etc.) of such a cryptographic address. The entitlement to the loan payment(s) can be considered as an asset. Such an asset can be transferred, traded, collateralized, rolled over, and so forth, on the blockchain. This is similar to how corporate bonds are transferred, traded, collateralized, rolled over, and so forth, in the traditional world. Similar to corporate debt, other entities can also issue debts (sovereign debt, provincial debt, municipal debt, etc.) on the blockchain. So can such debts be transferred, traded, collateralized, rolled over, and so forth, on the blockchain. Any debt can also enter a repurchase agreement on the blockchain and be sold and bought back on the blockchain, or enter a reverse repurchase agreement on the blockchain and be bought and sold back on the blockchain. It is also feasible for the blockchain system to use a credit rating algorithm to automatically generate a real-time credit score of a person or credit rating of an entity, based on their track record (social, economic, and financial activities) on blockchain and the information and instruction recorded (by flags) into the blockchain. Such a credit score or credit rating can be used by the blockchain system or other systems to automatically determine (with or without consideration of other factors) the person or entity’s loan eligibility, rate(s), term(s), and condition(s).

[0009] Here are examples of more sophisticated uses of this invention. A company can flag a cryptographic address to indicate how many shares of the company are owned by the cryptographic address. Such a cryptographic address can directly transfer the ownership of any or all of such shares to another cryptographic address, by specifying the name and quantity of the shares to be transferred, and the recipient cryptographic address, instead of the amount of token to be transferred and the recipient cryptographic address in a regular transfer transaction. If by looking up the records in the blockchain system, the nodes and / or miners find that such a cryptographic address indeed owns an amount of company shares greater than or equal to the amount requested to be transferred, the transfer transaction can be accepted by the nodes and / or miners into the blockchain system. That cryptographic address can even create a conditional transaction, by specifying the name and quantity of the shares to be transferred, the recipient cryptographic address, when the transfer should occur, and under what condition (e.g., only if the recipient cryptographic address or some other cryptographic address send a certain amount of tokens before a certain time to the cryptographic address owning such company shares or some other cryptographic address) the transfer should occur. Alternatively, the owner can sell the shares on a decentralized exchange using a smart contract. If this is considered a publicly traded company (e.g., depending on the demographics of targeted buyers or previous buyers which can be learned from the identity flags about such buyers), a government agency might flag thecryptographic address of the company or flag the sale to indicate whether the company has met regulatory requirements and whether the sale can proceed. The company can even buy back the shares from cryptographic address(s) owning the shares. This can be done on a decentralized exchange using a smart contract. Because all these events are recorded in the blockchain system, it is easy for the nodes and / or miners software and end-user software or some other software to figure out which cryptographic address eventually owns the shares, just like how the Bitcoin system figures out which cryptographic address owns how many Bitcoins, by tracing all the associated activities recorded in the blockchain. Furthermore, in a blockchain system with smart contract functionality, the owner of the cryptographic address can transfer this ownership of company shares into a smart contract and get the shares locked therein (to get a collateralized loan or anything else viable in a smart contract), pending contract execution and settlement, similar to sending an amount of tokens into a smart contract. The company can issue dividends to the shareholders by sending cryptocurrencies / tokens (or the full or fractional ownership of some other assets / properties registered on the blockchain) to the cryptographic addresses owning (even if the shares are locked in a smart contract, etc.) the shares. If a jurisdiction has a legal and reasonable tax system, the company can even preemptively deduct a certain amount from the dividend as dividend tax withholding. When the address owning the shares sells those shares (on a decentralized exchange, via a conditional transaction, etc.), the nodes and / or miners software can calculate capital gain and loss by querying the blockchain system and compare prices of purchase and sale. If there is a capital gain (may take into consideration capital loss carryover by calculating the loss of certain previous transactions on the blockchain), the nodes and / or miners software can do capital gains tax withholding by automatically deducting an amount of the sale to an address owned by a government revenue department (Le., recording a transaction of sending the amount from the seller address to the government address, without having to get the seller address’s consent). From time to time, a government can send flags to the blockchain system to indicate the up-to-date tax rate, which can be used for tax calculation and automatic tax withholding or tax payment.

[0010] The cryptographic address can get a loan by creating a conditional transaction stating that the cryptographic address (or some other cryptographic address) agrees to pay a certain amount of tokens (or something else registered on blockchain) to some cryptographic address(es) at a certain frequency or on a certain date or by a certain deadline, if some tokens (or something else registered on blockchain) are transferred (loaned) to the address owning the realestate. Should a debt default happen, the realestate shall be considered to have been transferred to a certain cryptographic address. The new owner may be required to transfer the ownership of the realestate into a smart contract for auction, and send any excess (the sale minus the outstanding debt) earning back to the borrower. Alternatively, this collateralized loan can be done in a smart contract after the ownership of the real estate is transferred into the smart contract and locked therein. A government agency can flag their assessment of the value of the real estate into the blockchain. Property tax can be paid by the cryptographic address owning the real estate, to a cryptographic address owned by a government agency. Such a tax payment can also happen automatically via a rule set in nodes and / or miners software, based on a flag that indicates the up- to-date tax rate. Capital gains tax or capital loss carryover can be done on the blockchain under the same condition as and in a way similar to those discussed in the previous paragraph. A buyer of a real estate can take a mortgage on the blockchain, by collateralizing the real estate (similar to the above example) to get a loan to pay the seller, and making down payments and monthly payments to the creditor. Should debt default occur, liquidation of the realestate can happen in a way similar to the above example. During the term of the debt service, the borrower may choose to refinance the mortgage, by taking a new loan on the blockchain to pay off the remaining debt of the old loan. When the old loan is paid off by the new lender, the lien is automatically considered (because all these transactions can easily be read and understood by nodes and / or miners software) to have been transferred to such a new lender and be subject to liquidation should debt default occur. Should the value of the real estate exceed the outstanding debt, the borrower may take a realestate equity loan on the blockchain. The blockchain systemknows the value of the real estate and the outstanding debt, by looking at a flag (which states assessed value) (sent by a government agency or some other person / entity) and the debt and payment history. The lender canthen lend an appropriate amount (e.g., not exceeding the assessed value of the real estate minus the outstanding debt) to the borrower, at an appropriate interest rate (e.g., determined from a credit score flag). If the credit score is not high enough, the lender may choose not to lend anything at all Should a default happen, the lender have the right to auction the realestate (e.g., using a smart contract) to recover lending loss. How the cryptocurrencies / tokens received from the sale should be distributed among the borrower, the mortgage lender, and the real estate equity lender can be pre-set in the smart contract (or a conditional transaction) of the real estate equity loan. Because the realestate registration, the value assessment, the credit score of the owner, the mortgage payments history of the real estate, and the cryptocurrencies / tokens are all on the blockchain, anything in a traditional real estate equity loan can be programmed to happen on the blockchain. So can other financial products / choices / features, simple or complicated, be programmed to be available on the blockchain.

[0011] Of course, this invention is not limited to working with above mentioned things like debts, real estates, and company shares. The registration, transfer, trade, collateralization, and other utilizations and engagements of ownership of any assets, properties, rights, and other things (which have been traditionally registered with authorities off blockchain) can happen on blockchain, similarly to how they happen in the traditional social, economic, and financial worlds. Examples include but are not limited to shares of funds (exchange traded funds, pension funds, sovereign wealth funds, wealth management funds, etc.), insurance products, future contracts, options, credit default swap, interest rate swap, and other financial derivative products. In the case of a future contract on the blockchain, if delivery of the goods is required, and ownership of such goods is not registered on the blockchain, a delivery confirmation can be flagged into the blockchain by a trusted person / entity verifying the off-blockchain delivery. A flagger can send a flag to a blockchain to indicate that a cryptographic address (which is owned by the flagger) owns assets, commodities, rights, etc. The flagger can then transfer, sell, buy back, or collateralize such ownership via the blockchain.

[0012] Because the ownership of assets, properties, and other things is registered digitally on a blockchain, fractional ownership, transfer, trade, collateralization, and so forth can easily happen. Here are some examples. A government agency can flag a cryptographic address to indicate that the owner of such a cryptographic address owns 0.3% of a certain real estate, by stating in the flag that the ownership is 0.003. An owner of 5 shares of a company can transfer one tenth of a share, by stating in the transfer transaction that the amount is 0.1. An owner of an antique can send 20% of such ownership into a smart contract for any purpose, just like sending cryptocurrencies and tokens into a smart contract for any purpose.

[0013] Events and happenings flagged into the blockchain can be used as conditions and outcomes to influence or determine related transactions or smart contracts in the blockchain. For example, a smart contract rules that if it rains in a certain city on a certain date, Bob shall pay Alice 10 tokens. When that day comes, the weather agency or some other entity can flag such weather information (raining or not) into the blockchain, by sending a communication (containing a message saying the date, city, and weather, in any natural or encoded language, format, and fashion, recognizable by the software at the nodes and / or miners) via a digital signature signed by cryptographic private key or some other electronic methods like email, to the nodes and / or miners of the blockchain system. The smart contract and any type of contract or conditional transaction associated with such a weather event then know (according to this flag) how to proceed and settle. The flag is not limited to containing only a simple description of a weather result. The flag can also contain a set of discrete or continuous data to describe the weather condition (e.g., windspeed), the price movement of a commodity, and any other facts and results, of multiple dates, times, or during continuous time period(s).

[0014] The flag and its contents can be gathered, prepared, and sent manually, automatically, or via a combination of both. The flag may specify a start and end time during which the flag should be honored by the blockchain system A flag may also specify a deletion time beyond which the flag may be deleted from the blockchain system From time to time, the blockchain system can purge such obsolete flags, keeping the system efficient. This can be done by a rule written in nodes and / or miners software to periodically generate and adopt a new blockchain which comes from the old blockchain with obsolete flags deleted. Later reference or verification can happen within the blockchain system, or in other blockchain system(s), or simply by using the blockchain with such a flag like a traditional book of records (meaning simply using some software to query the blockchain). A ledger (showing real-time resultant state from all the transactions and flags) can be dynamically maintained and updated by the nodes according to such transactions and flags in the blockchain and the pool(s).

[0015] Optionally, rules regarding these flags can be set, added, or updated in the nodes and / or miners software and / or blockchain by the original creator of the blockchain or the nodes and / or miners via a simple majority vote (from the nodes or miners or token holders or any combination of the three) or other consensus mechanisms, or according to rules, laws, and regulations. These rules can make the flags function like the traditional world, allow flaggers to send flag(s) to correct errors of and make updates to existing flags, and allow the flagging system to cope with accidents and attacks. Here are some examples. A weather agency can be allowed to send a new flag to indicate that an existing flag contains incorrect weather information (by accident, due to malicious attack, etc.) and should be ignored. The correct weather information can be contained in such a new flag, or another flag. A rule can be made that a freeze can only last for 24 months. If a court order of confiscation is not issued by then, the balance will be automatically unfrozen. Each recorded flag has a timestamp so the nodes and / or miners know how much time has elapsed. When the nodes and / or miners find a freeze from the blockchain that is more than 24 months old, they will ignore the freeze and will not reject any transaction because of such a freeze. Another rule can be made that, an account (cryptographic address or email address or some other ID with the ability to flag) owned by the court can override the freeze flag (by referring to such a flag using a unique identifier such as the flagger’s cryptographic address in combination with the timestamp of such a flag) put in place by an account owned by police, thereby unfreezing the balance without having to wait for 24 months. Another rule can be made that a flagger can send a flag to invalidate, correct, and amend a previous flag. Such a previous flag might be created bythe same flagger or some other flagger. The blockchain system will be able to handle such invalidation, correction, and amendment, seeing the two flags. Another rule can be made that a certain cryptographic address has only the authority to freeze balance, while another cryptographic address has the authority to freeze, unfreeze, and confiscate balance. Another rule can be made that a cryptographic address can only freeze or confiscate a maximum of certain number of cryptographic addresses or certain aggregate amount of balance, during a certain period of time, or ever. Another rule can be made that, for a confiscation to settle, the balance must first be frozen for at least 30 days, either at the cryptographic address to confiscate balance from, or at the recipient cryptographic address, or both. These measures can mitigate or prevent damage should an account (with authority to flag) get compromised (going rogue, getting hacked, etc.). Because otherwise the perpetrator can confiscate the balance and immediately sell the balance in exchange for something else (fiat money, goods, services, a token of another blockchain system, etc.), before the confiscated balance can be frozen or confiscated by the rightful authority trying to stop this crime. Another rule can be made that, an account owned by the court can send the nodes and / or miners a flag to revoke or suspend the authority of an account owned by police, because the police account is compromised or for some other reason(s). Unless it is reinstated by the account of the court via a subsequent flag, nodes and / or miners software will not honor any flag from such revoked or suspended account. If the account of the court gets compromised, the nodes and / or miners can revoke or suspend the court account by updating the software / database(s) with such a decision or writing it to the blockchain, either by a simple majority vote (from the nodes or miners or token holders or any combination of the three) or by other consensus mechanisms. Similar or more complex hierarchy systems can be implemented to give certain account(s) superior authority over other account(s), having the ability to revoke, suspend, or reinstate those inferior accounts, to add, remove, change, relax, or tighten conditions thereof, as well as to grant new account (which might not even exist in the blockchain, nodes or miners software / databases yet) certain authority, simply using a flag. Similarly, the initial creator of the blockchain or someone else can be given a super account like this, to flag appropriate cryptographic addresses to give them the authorities to flag others. After a certain quota or time period has passed, such capability can be removed from the super account, by a sequester pre-set in the system. A hierarchy system can have multiple levels, meaning inferior accounts can have superiority over accounts which are even more inferior. And these more inferior accounts can have superiority over accounts which are further inferior. The number of such levels can go on without limitation until a certain purpose is properly served.

[0016] There are at least two embodiments of this invention when it comes to solving the conflict of jurisdiction. A specific blockchain can be created for a particular jurisdiction, placing all activities in such a blockchain system under the rules, laws, and regulations of such a jurisdiction. When the owner of a cryptographic address from one blockchain wants to transact with a person or entity of another jurisdiction, such an owner can sell or swap (using centralized or decentralized exchange, cross-chain transfer protocol, etc.) the balance in exchange for tokens of the blockchain system of such a jurisdiction, and use such tokens to transact with the person or entity of that jurisdiction. Another approach is to have a feature for border official or other authorities to flag a cryptographic address when the owner (be it an individual, a company, or other entity) of the cryptographic address enters the jurisdiction, indicating that the person has entered their jurisdiction. Alternatively, this flag can be added to the blockchain system by a merchant or transaction counter party in that jurisdiction upon domestic transaction. The merchant or transaction counter party knows that it is a domestic transaction either because the transaction happens face-to-face domestically or happens remotely but there is evidence that the owner of the cryptographic address is physically domestic. If the owner of the cryptographic address refuses the flag, the merchant or transaction counter party can refuse to do business with the owner of the cryptographic address. From this point on, all activities of this cryptographic address can be required to comply with rules, laws, and regulations of the jurisdiction, with such jurisdiction-specific rules, laws, and regulations already codedin the nodes and / or miners software and / or the blockchain. Law enforcement agencies and other entities outside the jurisdiction will not be able to freeze, confiscate, or regulate the cryptocurrencies / tokens balances, assets, properties or other things owned by the cryptographic address because the nodes and / or miners will know that the cryptographic address of the flagger is not in their jurisdiction and will ignore the flag(s), although they may be able to ask law enforcement agencies or other persons / entities in the jurisdiction to do them a favor. Another flag can be added to the blockchain system (either by border official or other suitable personnel or entities) to relieve the cryptographic address of such jurisdiction-specific rules, laws, and regulations, should the owner of the cryptographic address leave the jurisdiction. If the owner of the cryptographic address has never crossed any border or the owner is a company or other entity, such an owner can ask a police station, other government agencies, notary public, merchants, or other entities in that jurisdiction to add a flag to the blockchain to indicate that such an owner has always been in that jurisdiction and should be subject to the jurisdiction-specific rules, laws, and regulations. As discussed earlier, this can easily happen upon domestic business transaction. Of course, any cryptographic address can be required to comply with universal rules of the blockchain system,universal or international rules, laws, and regulations coded into the blockchain system, and to be subjected to the flags from international authorities such as Interpol, regardless of which jurisdiction the owner is in.

[0017] Anything worth recording for later reference, verification, guidance, or execution can be flagged into the blockchain, including events, happenings, invitations, societal interactions, histories, relationships, associations, memberships, affiliations, hierarchies, rights, privileges, requests, instructions, ownerships, obligations, liabilities, contracts, promises, fulfillments (such as delivery confirmations), identities, attributes, statuses, endorsements, qualifications, certifications, credentials, etc. The blockchain system can be programmed to either allow or require any or certain flagger to include a fee in a flag, just like people including a transaction fee when sending a Bitcoin transaction. Law enforcement agencies and other persons / entities can be given flagging authority to freeze, unfreeze, confiscate, revoke, reinstate, return, and regulate assets, properties, rights, and anything flagged into the blockchain, whether the ownership thereof is sitting idly or locked in a smart contract or conditional transaction, just like how law enforcement agencies and other persons / entities cando so to cryptocurrencies / tokens as described in previous paragraphs. Except in this case, the flag specifies which assets / properties and other things (and the quantities thereof) (instead of specifying the amount of cryptocurrencies / tokens balance) to freeze, unfreeze, confiscate, revoke, reinstate, return, and regulate.

[0018] Any information of a flag can be encrypted to protect the privacy of any concerned parties. For example, a person may prefer his / her passport information encrypted before flagged into the blockchain, so that it is not available to the general public. Instance -specific decryption key can be used so that the flagger and the reader can only use the key to decrypt certain piece of information about a person, not all his / her privacies in the blockchain. In the passport scenario, passport authority can generate an encryption key and use it to encrypt the passport information for flagging, and give the decryption key (either the same as or different from the encryption key) to the person of the passport. When verification of passport is needed, the person can give the decryption key to the authenticator to use it to decrypt the passport information. The private key of a cryptographic address owned by the passport holder can be set and used as the decryption key. Alternatively, universal encryption and / or decryption key(s) canbe used by passport authorities andauthenticator(s). So that the keys are the same for everybody, although this might carry the risk of the decryption key getting compromised (stolen, etc.) and a huge amount of identity data getting exposed. It is not just texts or numbers of any natural language which can be flagged into the blockchain. So can any information representable in a computer system, including the photo in a passport, biometric information (finger prints, iris, etc.), an audio, a video,etc. Therefore, the authenticator can compare the decrypted passport photo from the blockchain with the look of the real person. If the authentication does not involve any subsequent transaction via the blockchain or some other blockchain, then the passport flag does not have to specify any target cryptographic address, but can instead merely include the passport information. This simplification can be applied to other types of flags, such as the weather flag mentioned previously.

[0019] All these functionalities are enabled by this invention, without having to sacrifice the decentralized nature of a permissionless blockchain system, because there are no special requirements to qualify anybody as a node operator or a miner, other than the universal computational requirement in a proof-of-work blockchain system or the stake requirement in a proof-of-stake blockchain system or other requirements in permissionless blockchain systems with other consensus mechanisms, plus the hardware requirements (and associated requirements) for functioning properly in these blockchain systems. This invention works in any system that utilizes blockchain technology, including (but not limited to) permissionless blockchain, permissioned blockchain (distributed ledger technology), public blockchain, private blockchain, general blockchain, specialty blockchain, main chain, side chain (layer 0, layer 1, layer 2, etc.), stable coins (cryptocurrencies pegged to fiat currency or other things, or stabilized by algorithms), and any combination thereof.

Claims

Claims1. A method enabling law enforcements, regulations, social, economic, and financial transactions and verifications on a blockchain, the method comprising: storing, either by the original creator of the blockchain or by the consensus of blockchain operators and guardians (nodes, miners, etc.), in the blockchain or the software / databases of the nodes and / or miners: an email address or a cryptographic public key (or derivative thereof) or other identifier of a person or entity, as well as rules and instructions regarding how to handle (e.g.,how much authority an electronic communication can carry, how, to what extent, on what conditions, and with what restrictions the blockchain system should honor an electronic communication) electronic communication(s) sent by such a person or entity; the owner of the email address or cryptographic public key (or derivative thereof) or other identifier sending to blockchain operators and guardians (nodes, miners, etc.) an electronic communication (with a digital signature signed using cryptographic private key or in another way of electronic communication such as email) which can contain any information and ins true tion(s), written in any language (natural or encoded, complete or abbreviated), format, and fashion; the nodes and / or miners verifying the authenticity of the electronic communication by verifying the digital signature using the cryptographic public key (if it is found and obtained / derived from the record), or looking up the email address or other identifier; the nodes and / or miners broadcasting such an authentic electronic communication to other nodes and / or miners; the nodes and / or miners storing such an authentic electronic communication in the transaction pool or something similar; the nodes and / or miners recording such an authentic electronic communication into a new block (which may contain other electronic communications and / or transactions) which gets appended to the blockchain; and all subsequent activities (such as reference, transaction, verification, calculation, determination, and execution) relevant to such an electronic communication functioning accordingly and properly.

2. A method according to claim 1, wherein the subsequent activities (such as reference, transaction, verification, calculation, determination, and execution) can happen within a blockchain system, or in other blockchain system(s), or off blockchain (by querying the blockchain like a traditional book of records).

3. A method according to claim 1, wherein the electronic communication can be sent to record into the blockchain system any information worth recording, including events, happenings, invitations, societal interactions, histories, relationships, associations, memberships, affiliations, hierarchies, rights, privileges, requests, ownerships, obligations, liabilities, contracts, promises, fulfillments (such as delivery confirmations), identities, attributes, statuses, endorsements, qualifications, certifications, credentials, etc.

4. A method according to claim 3, wherein the information can be encrypted before being recorded to the blockchain via the electronic communication, to protect the privacy of any concerned parties.

5. A method according to claim 1, wherein the electronic communication can be sent to node(s) and / or miner(s) of a blockchain system to indicate that the owner of a cryptographic address has the qualification to do something (such as practicing law in a particular jurisdiction) , or to suspend or revoke or reinstate a qualification or status.

6. A method according to claim 1, wherein the electronic communication can be sent to node(s) and / or miner(s) of a blockchain system to indicate the identity (veteran, employee, passport, driver license, and any other identity information) of the owner of a cryptographic address.

7. A method according to claim 1, wherein the electronic communication can be sent by a credit bureau or other persons / entities to node(s) and / or miner(s) of a blockchain system to indicate that the owner of a particular cryptographic address has a certain credit score, which can be used to determine eligibility and interest rate when the owner of that cryptographic address tries to get a loan via a transaction either on the blockchain, or on some other blockchain(s), or off the blockchain.

8. A method according to claim 1, wherein the electronic communication can be sent by a credit rating agency or other persons / entities to node(s) and / or miner(s) of a blockchain system to indicate that a cryptographic address owned by a corporation or other entity has a certain credit rating, which can be used by a lender (such as a pension fund) or any agent to determine appropriate interest rate when the corporation or other entity issues debt via a transaction (Decentralized Finance in smart contract, etc.).

9. Via the blockchain system, a lender or any agent can know whether rules, regulations, and laws allow loan(s) to such borrowers (in claims 7 and 8), based on the identities (which have been recorded into the blockchain as mentioned in claim 6) of the owners of such cryptographic addresses.

10. A method according to claim 1, wherein the electronic communication can be sent (by a company or other persons / entities) to node(s) and / or miner(s) of a blockchain system to indicate how many shares of a company are owned by the owner of a cryptographic address.

11. The owner of the cryptographic address (discussed in claim 10) can: directly transfer the ownership of shares on the blockchain; create a conditional transaction, by specifying the name and quantity of the shares to be transferred, the recipient cryptographic address, when the transfer should occur, and under what condition the transfer should occur; and transfer this ownership of company shares into a smart contract and get the shares locked therein (to get a collateralized loan or anything else viable in a smart contract), pending contract execution and settlement, similar to sending an amount of tokens into a smart contract12. A method according to claim 1, wherein the electronic communication can register either full or fractional ownership of assets, properties, rights, and other things digitally on blockchain, enabling fractional ownership, transfer, trade, and so forth on blockchain.

13. A method according to claim 1, wherein the electronic communication can contain not just a simple description of a single fact or occurrence but also a set of discrete or continuous data to describe facts and results (such as the price movement of a commodity) across multiple dates, times, or during continuous time period(s).

14. A method according to claim 1, wherein the electronic communication can include not just texts or numbers of any natural language but also any information representable in a computer system, including the photo in a passport, biometric information (finger prints, iris, etc.), an audio, a video, etc.

15. A method according to claim 1, wherein the electronic communication does not have to specify any target cryptographic address, but can instead merely include information not related to any cryptographic address.

16. A method according to claim 1, wherein the electronic communication can record events and happenings into the blockchain, which can be used as conditions and outcomes to influence or determine related transactions or smart contracts in the blockchain, because a smart contract and any type of contract and conditional transaction and the blockchain system can be preprogrammed to know how to proceed and settle according to such events and happenings.

17. The recorded information (discussed in claim 3) can be used to make registration, reference, transfer, trade, verification, guidance, execution, and other utilizations and engagements of ownership of any assets, properties, rights, and anything else (recorded into the blockchain) happen on the blockchain.

18. A method according to claim 1, wherein the electronic communication can be sent (by a government agency, a private company, or other persons / entities) to node(s) and / or miner(s) of a blockchain system to indicate whether, how, when, under what condition(s), and to what extent a transaction can happen, according to laws, regulations, and other rules.

19. A method according to claim 1, wherein the electronic communication can be sent by law enforcement agencies or other persons / entities to node(s) and / or miner(s) of a blockchain system, requesting the full or partial balance (ownership of cryptocurrencies, realestates, equities, other assets) or rights or other things of a cryptographic address being frozen, confiscated, regulated, revoked, or suspended, even if the balance or rights or other things has already been locked in a smart contract or conditional transaction, because such a smart contract or conditional transaction and / or the blockchain system can be pre-programmed to handle such a contingency.

20. A method according to claim 1, wherein the electronic communication can be sent by law enforcement agencies or other persons / entities to the nodes and / or miners of blockchain system to request unfreezing a frozen balance, returning a confiscated balance, reinstating or removing the regulation(s) or condition(s) on rights or other things of the owner of a cryptographic address.

21. A method according to claim 1, wherein the electronic communication can be sent (by border official, or other authorities, or merchants, or other persons / entities) to node(s) and / or miner(s) of a blockchain system to indicate that the owner of a cryptographic address has entered a certain jurisdiction or is in a certain jurisdiction.

22. All activities of the cryptographic address (in claim 21) can be required to comply with rules, laws, and regulations of the jurisdiction (in claim 21), with such jurisdiction-specific rules, laws, and regulations already coded in the nodes and / or miners software / databases and / or the blockchain.

23. A method according to claim 1, wherein the electronic communication can be sent (by border official, or other authorities, or merchants, or other persons / entities) to node(s) and / or miner(s) of a blockchain system to indicate that the owner of the cryptographic address has exited a jurisdiction, which can be used to relieve the cryptographic address of jurisdiction-specific rules, laws, and regulations.

24. A method according to claim 1, wherein hierarchy systems can be implemented to give certain account(s) superior authority over other account(s), having the ability to send an electronic communication to node(s) and / or miner(s) of a blockchain system to: revoke, suspend, or reinstate those inferior accounts’ ability to send valid electronic communications to node(s) and / or miner(s) of a blockchain system; add, remove, change, relax, or tighten conditions of those accounts; andgrant new account (which might not even exist in the blockchain, nodes software / databases, or miners software / databases yet) the authority to send certain electronic communications.

25. A method according to claim 1, wherein an electronic communication can be sent to node(s) and / or miner(s) of blockchain system to invalidate, correct, amend, or override records and instructions recorded into the blockchain by previous electronic communication(s).

26. A method according to claim 1, wherein rules regarding electronic communication can be set, added, changed, or updated in the nodes and / or miners software / databases and / or blockchain by the original creator of the blockchain or the nodes and / or miners via a simple majority vote (from the nodes or miners or token holders or any combination of the three) or other consensus mechanisms, or according to rules, laws, and regulations, to: correct errors of and make updates to existing recorded electronic communications ; allow the system to cope with accidents and attacks; and revoke, suspend, or reinstate an account’s ability to send valid electronic communications to node(s) and / or miner(s) of blockchain system.