Blockchain Distributed Ledger Payment Validation
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Solution Overview
Problem
Traditional payment authorization and settlement systems rely on centralized communication channels, which are inefficient and require routing through third-party credit card providers, necessitating a more distributed network for facilitating transactions.
Innovation Solution
A system that connects with a blockchain distributed network to validate payment transactions by receiving transaction records, accessing a distributed ledger, and using payment transaction logic to determine validity, with the ability to communicate validation and initiate crediting of accounts within the network.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If traditional centralized payment rails are used for transaction authorization and settlement, then routing through third-party credit card providers is established, but communication efficiency deteriorates and reliance on centralized systems increases
Solution Approach 1:
The patent segments the centralized payment processing system into a distributed network of independent nodes, where each node maintains a copy of the ledger and can independently validate transactions. This segmentation eliminates the need for complex centralized routing through third-party providers, as transactions are propagated peer-to-peer across the network, directly improving processing efficiency while reducing communication complexity.
Solution Approach 2:
The patent transitions from a hierarchical centralized architecture to a flat distributed network architecture, adding the dimension of decentralization. This dimensional change allows transactions to be processed in parallel across multiple nodes simultaneously, dramatically improving throughput and eliminating the single-point-bottleneck routing complexity of traditional systems.
2Reliability
If centralized communication channels are used for payment authorization, then routing through established rails is maintained, but system efficiency deteriorates and centralized dependency increases
Solution Approach 1:
The patent implements preliminary action by having all nodes continuously synchronize and validate transactions in real-time as they propagate through the network, rather than waiting for centralized batch processing. This preliminary validation at each node eliminates delays associated with centralized authorization queues, reducing processing time while maintaining reliability through redundant validation across multiple nodes.
Solution Approach 2:
The patent enables self-service by allowing each node to independently validate and process transactions using the consensus mechanism, without requiring centralized authorization. Each node autonomously verifies transaction validity against the ledger state and propagates valid transactions, eliminating centralized bottlenecks and reducing processing time while maintaining system reliability through distributed consensus.
3Productivity
If third-party credit card providers are used for transaction routing, then established payment infrastructure is utilized, but processing efficiency deteriorates and centralized control is required
Solution Approach 1:
The patent applies universality by designing a multi-functional distributed ledger that simultaneously serves as the transaction ledger, validation mechanism, and settlement system. This eliminates the need for separate third-party routing infrastructure, as the blockchain network performs all these functions natively, improving settlement speed while maintaining operational simplicity through a unified system that handles multiple payment types and scenarios.
Data Source
AI summary
Embodiments enable a system operatively connected with a block chain distributed network to use the block chain distributed network for validation (i.e., authorization) of a payment transaction. The system receives a transaction record associated with a payment transaction, wherein the transaction record comprises transaction data indicating a payor, a payee and an amount; accesses a distributed ledger stored in the memory device, wherein the distributed ledger is updated based on communications from a block chain distributed network; and, using payment transaction logic, determines whether the transaction record represents a valid transaction by, e.g., communicate the transaction record to a validating node for validation of the transaction record. Once validated, the system (or validating node) communicates validation of the transaction record to the block chain distributed network, e.g., by updating the distributed ledger with information indicating validation of the transaction record and providing access to the distributed ledger to the network.