Blockchain Intermediary for Financial Transaction Clearing
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Solution Overview
Problem
Current computerized clearing and settlement systems face inefficiencies and slow processing times due to the limitations of conventional database systems, which hinder the ability to handle the high volume and complexity of transactions in the financial markets.
Innovation Solution
A computer system is configured to interface with a distributed blockchain system, allowing for the storage and management of transactional data, including generating and transmitting blockchain transactions, which facilitates faster and more efficient clearing and settlement processes by utilizing a distributed ledger that provides immutability and transparency.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Speed
If conventional database systems are used for clearing and settlement, then system complexity is reduced, but processing speed and efficiency deteriorate
Solution Approach 1:
The patent introduces a blockchain network as an intermediary distributed ledger system between trading platforms and clearing houses. This blockchain intermediary enables direct peer-to-peer transaction recording and verification, eliminating the need for complex centralized database reconciliation processes while significantly improving processing speed through automated consensus mechanisms.
Solution Approach 2:
The patent replaces traditional mechanical database systems with a blockchain-based distributed ledger. This substitution transitions from centralized data storage and manual reconciliation processes to a decentralized system using cryptographic hashing and consensus algorithms, thereby improving processing speed while managing complexity through standardized protocols.
2Productivity
If conventional centralized systems are used, then ease of operation is maintained, but productivity and settlement time deteriorate
Solution Approach 1:
The patent implements a self-service mechanism where the blockchain network automatically performs transaction validation, verification, and settlement through decentralized consensus. Trading platforms and clearing houses independently verify transactions against the distributed ledger without requiring centralized coordination, thereby improving productivity while maintaining ease of operation through automated processes.
Solution Approach 2:
The patent creates a universal blockchain platform that serves multiple functions: transaction recording, verification, settlement, and audit trail maintenance. This multi-functional system handles diverse clearing and settlement operations across different trading platforms through a single standardized interface, improving overall productivity while simplifying operations through consolidation.
3Reliability
If distributed blockchain systems are implemented, then transparency and security are improved, but device complexity increases
Solution Approach 1:
The patent segments the blockchain network into distinct node types (trading platforms, clearing houses, validators) with specialized responsibilities. Each node maintains a copy of the distributed ledger and performs specific functions, improving security through decentralized verification while managing complexity by dividing system responsibilities across multiple independent components.
Solution Approach 2:
The patent changes the fundamental parameters of the system architecture from centralized to distributed, using cryptographic hashing, digital signatures, and consensus algorithms. These parameter changes enhance transaction security and reliability through immutable ledger records and decentralized verification, while the standardized cryptographic protocols help manage the inherent complexity.
Data Source
AI summary
A computer system that interfaces with a blockchain is provided. The computer system receives match data for a match between a first data transaction request that is associated with a first identifier and a second data transaction request that is associated with a second identifier. A first blockchain transaction is generated based on the match data and stored to a blockchain. At least one further blockchain transaction is generates that splits the match into two different transactions—one between the first identifier and an intermediary and the second between the intermediary. These are recorded to the blockchain via the further blockchain transactions.