Blockchain Transaction Auditability via Intermediary Moderation
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Existing systems for managing electronic transactions lack complete cryptographic auditability, leading to disputes over transaction records and the potential for tampering or inaccuracies.
Innovation Solution
A system that uses a moderating entity between two transacting parties and a blockchain to ensure complete cryptographic auditability of transactions, minimizing the need for third-party record management and preventing tampering.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If a third party is used to keep records of transactions, then transaction record management is simplified for transacting entities, but the system becomes vulnerable to tampering and inaccuracies without complete auditability
Solution Approach 1:
The patent introduces a blockchain-based intermediary system that acts as a neutral third party for transaction record keeping. The blockchain network distributes transaction records across multiple nodes, eliminating the need for traditional centralized escrow agents while providing cryptographic verification. Each transaction is hashed and stored in blocks that are chained together, with each block containing a reference to the previous block, creating an immutable ledger that all parties can audit independently.
Solution Approach 2:
The patent implements distributed copying of transaction records across multiple blockchain nodes. Instead of a single centralized record that can be tampered with, every transaction is replicated and stored identically across the network. This creates redundant copies that can be independently verified, ensuring that no single point of failure or corruption can compromise the entire system's integrity.
2Adaptability or versatility
If individual entities maintain their own transaction records, then complete control and access is maintained by each entity, but disputes arise when records differ and there is no easy resolution mechanism
Solution Approach 1:
The patent merges individually maintained records with a centralized blockchain ledger. Each entity continues to have their own local record-keeping system, but these are synchronized with and validated against the shared blockchain ledger. The blockchain serves as the source of truth that all individual records must align with, providing a unified reference point that resolves disputes while preserving each entity's ability to access and verify records independently.
Solution Approach 2:
The patent implements a feedback mechanism where transaction records are continuously verified against the blockchain ledger. When entities attempt to record transactions, the system checks these records against the immutable blockchain data, providing immediate feedback on whether the records match. This automated verification process prevents divergent records from being accepted, ensuring all parties work from the same accurate information.
3Reliability
If complex auditing programs are designed to check for irregularities and non-matching record elements, then transaction auditability is improved, but system complexity and resource expenditure increase significantly
Solution Approach 1:
The patent replaces complex mechanical auditing programs with cryptographic verification mechanisms. Instead of using sophisticated software to analyze and compare transaction records for irregularities, the system uses cryptographic hashes and digital signatures that mathematically guarantee record integrity. The blockchain's cryptographic structure automatically prevents tampering, eliminating the need for complex auditing algorithms while providing stronger security guarantees.
Solution Approach 2:
The patent changes the fundamental parameters of record verification from complex multi-factor analysis to simple cryptographic validation. By transforming transaction data into fixed-size cryptographic hashes and using digital signatures, the system reduces verification to checking whether hash values match and signatures are valid. This parameter transformation simplifies the auditing process from examining multiple record elements to verifying cryptographic proofs.
4Reliability
If traditional third-party moderation is used for transactions, then dispute resolution capability is provided, but data exchange requirements increase and processing time is extended
Solution Approach 1:
The patent enables transactions to be self-verified through cryptographic proofs embedded in the blockchain. Instead of requiring third-party moderators to manually verify and resolve disputes, the system provides self-executing smart contracts and cryptographic evidence that automatically prove transaction validity. Parties can independently verify transaction authenticity using public keys and hash verification, eliminating the need for intermediary intervention in routine verification tasks.
Solution Approach 2:
The patent performs preliminary cryptographic verification and validation before transactions are finalized on the blockchain. Transaction data is hashed, signed, and validated against the ledger in advance, with all verification logic executed before consensus is reached. This preliminary action ensures that when transactions are committed to the blockchain, they have already undergone rigorous validation, eliminating the need for post-transaction dispute resolution and accelerating overall processing.
Data Source
Figure 1
Figure 2
Figure 3
AI summary
A method for processing of a cryptographically auditable transaction includes: receiving payment data, wherein the payment data includes at least a primary account number; transmitting the primary account number to a computing system; receiving a confirmation associated with the primary account number from the computing system; transmitting a payment request to the computing system, wherein the payment request includes at least a reference value associated with a payment transaction; receiving an acceptance request from the computing system, wherein the acceptance request includes at least the reference value, an acceptance address, one or more fee values, and a first digital signature generated by a third party; generating a second digital signature using at least the acceptance address; and transmitting at least the second digital signature to the computing system.