Blockchain Exchange Item Marketplace Fraud Prevention
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Gift cards often go unused, resulting in billions of dollars in unspent value, and there is a lack of standardized numbering systems and formats, leading to challenges in fraudulent acquisition and redemption in existing payment systems.
Innovation Solution
An exchange item marketplace network that utilizes a blockchain-based system for secure transaction processing, verification, and redemption of exchange items like gift cards, ensuring authenticity and preventing fraud through digital representation, secure chain of custody, and trusted module verification.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If gift cards are distributed with various numbering systems and formats, then gift card issuance flexibility is improved, but fraud detection and verification become more difficult
Solution Approach 1:
The patent applies a universal blockchain-based verification system that can handle multiple gift card numbering systems and formats through a single standardized interface. The blockchain ledger maintains standardized records for all gift cards regardless of their original format, enabling consistent fraud detection across diverse card types while preserving the flexibility of various issuance formats.
Solution Approach 2:
The blockchain ledger acts as an intermediary layer between diverse gift card formats and the verification system. It translates various card numbering systems into a standardized blockchain representation, allowing the system to verify authenticity and detect fraud without being directly exposed to the complexity of multiple card formats.
2Adaptability or versatility
If gift cards are issued with non-standardized formats, then issuer flexibility is improved, but transaction processing consistency deteriorates
Solution Approach 1:
The patent creates a digital copy of each gift card's essential verification data on the blockchain ledger. This standardized digital representation is copied from the original diverse card formats, enabling consistent transaction processing while allowing issuers to maintain flexibility in their physical or digital card designs.
Solution Approach 2:
The system transforms various gift card parameters (numbering systems, formats) into a standardized set of blockchain parameters. This parameter transformation maintains the essential identity and value information while converting diverse formats into a consistent structure suitable for uniform transaction processing.
3Ease of operation
If unused gift cards are allowed to remain in circulation, then consumer choice is improved, but economic value loss increases
Solution Approach 1:
The blockchain-based system provides real-time feedback to consumers about their gift card status, balance, and usage options. This transparency enables consumers to make informed decisions about using or transferring their gift cards, reducing the likelihood of them remaining unused while preserving consumer choice and control.
Solution Approach 2:
The system enables preliminary actions such as gifting, transferring, or scheduling future redemption of gift cards before they expire or are forgotten. This allows consumers to proactively manage their gift cards, ensuring they are used or transferred appropriately rather than remaining unused and losing value.
Data Source
AI summary
A method for execution by a marketplace server includes detecting fraudulent acquisition of an exchange item by a first computing device, where the exchange item has a static identifier (ID) and a dynamic ID that is generated based on exchange item security parameters associated with the exchange item. The method further includes deactivating the dynamic ID and the exchange item security parameters in response to the detecting fraudulent acquisition, where the static ID of the exchange item remains active and valid. The method further includes generating second exchange item security parameters for the exchange item. The method further includes generating a second dynamic ID based on the second exchange item security parameters, where the second dynamic ID establishes the exchange item for utilization in an exchange item marketplace network. The method further includes updating a record in a marketplace database to include the second dynamic ID.