Blockchain Transaction Ledger Using Cryptographic Hash Chains
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Solution Overview
Problem
Conventional transactional accounting systems face challenges in maintaining accurate and secure asset balances due to a disconnect between overall balances and individual transactions, making error detection and reconciliation difficult, and are susceptible to nefarious changes such as hacking.
Innovation Solution
A blockchain network managed by a central service provider that records transactions securely and immutably, using cryptographic hash algorithms to verify transactions and maintain traceable lineage of asset transfers through directed graphs, ensuring that transactions can be reliably and verifiably applied to party positions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If conventional accounting systems maintain only the last state (overall balance), then the system is simple to operate, but error detection and reconciliation become difficult and resource-intensive
Solution Approach 1:
The patent applies preliminary action by maintaining a chronological ledger of all transactions from the beginning of time, rather than starting fresh each period. Each transaction is recorded with its full details and linked to the cumulative balance at that point, enabling easy reconciliation by simply tracing the ledger backward without manual reconstruction efforts.
Solution Approach 2:
The patent creates a copy of the complete transaction history and balance state at each point in time within the ledger. This copying mechanism allows any past state to be reconstructed and verified by examining the recorded transactions, eliminating the need for complex reconciliation processes while maintaining full traceability.
2Ease of manufacture
If conventional systems use a relational database to track transactions and balances, then the system is easy to implement, but the system becomes susceptible to unauthorized changes and hacking
Solution Approach 1:
The patent replaces the traditional mechanical database system with a cryptographic hash chain structure. Instead of relying on database integrity mechanisms, it uses cryptographic hashing where each transaction record contains a hash of the previous state, creating an immutable chain that is resistant to unauthorized changes while maintaining implementation feasibility.
Solution Approach 2:
The patent applies preliminary anti-action by pre-computing cryptographic hash values for each transaction and linking them in a chain structure. This preliminary cryptographic preparation prevents future unauthorized modifications, as any change to past transactions would break the hash chain and be immediately detectable.
3Loss of information
If the system maintains detailed transaction records for every transaction, then transaction traceability is improved, but the system complexity increases
Solution Approach 1:
The patent merges the transaction details and balance state into a single integrated ledger record. Each ledger entry combines the transaction information with the cumulative balance and cryptographic hash links, eliminating the need for separate balance tables and reducing overall system complexity while maintaining complete traceability.
Solution Approach 2:
The patent creates a universal ledger structure that serves multiple functions simultaneously: it records transactions, maintains balances, enables traceability, and provides cryptographic verification. This multi-functional design reduces the need for multiple separate systems and components, simplifying the overall architecture.
Data Source
AI summary
A central service provider manages verifiable and cryptographically strong transactions in a block chain network. For each transaction, the central service provider maintains and updates one or more directed graphs that describe the traceable positions of an asset held by parties of the block chain network. Therefore, transactions can be reconciled by tracing along the directed graphs. The central service provider also leverages crypto-hashing to enforce the immutability of each executed transaction. For example, each transaction is cryptographically hashed and written into a block in the block chain. Each transaction refers to a cryptographic hash of a prior transaction and each block refers to a cryptographic hash of a prior block. Therefore, the executed transactions are cryptographically strong in that if a single transaction is altered, then the entire block of transactions including the transaction is invalidated.