Blockchain Inflow Outflow Algorithm for Secure Asset Conversion
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Solution Overview
Problem
Blockchain-based systems face challenges in securely converting between digital assets and non-digital assets, such as fiat currencies, due to security risks and inefficiencies in existing conversion methods, which require either volatile digital asset sales or transmission of off-chain asset credentials.
Innovation Solution
Implementing a blockchain-based inflow/outflow algorithm that links electronic funding wallets to digital wallets, allowing for secure conversion between digital and non-digital assets using fixed conversion rates and reducing the need for off-chain transactions by utilizing on-chain alternate asset holdings, thereby enhancing security and reducing redundant storage and compute power.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If digital assets are converted to non-digital assets by selling digital assets, then the conversion can be completed, but the user faces volatile market forces and loses control over the conversion process
Solution Approach 1:
The patent introduces an intermediary conversion mechanism where the system automatically manages the conversion between digital and non-digital assets through linked electronic funding wallets. This intermediary layer protects users from direct exposure to volatile market forces while maintaining conversion control through pre-established linkage relationships rather than requiring active trading decisions.
Solution Approach 2:
The system performs preliminary action by establishing linked electronic funding wallets before conversion is needed. Users pre-link their digital wallets to external funding sources, so when conversion is required, the system can immediately execute the conversion without requiring users to actively sell assets at unfavorable market moments. This preliminary setup resolves the contradiction by ensuring both security and control are maintained.
2Ease of operation
If off-chain asset credentials are transmitted for conversion, then the conversion can be facilitated, but network security risks and susceptibility to hacking increase
Solution Approach 1:
The patent extracts the vulnerable element (off-chain asset credentials) from the conversion process. Instead of transmitting sensitive credential information across networks, the system uses on-chain digital wallet linkages that reference external funding sources without exposing actual credential data. This extraction eliminates the security vulnerability while preserving conversion functionality.
Solution Approach 2:
The system uses digital copies or references of asset credentials through blockchain wallet addresses rather than transmitting the actual credential data. The electronic funding wallet linkage creates a secure reference mechanism where the blockchain network can facilitate conversion by referencing wallet addresses and balances without ever exposing sensitive credential information, thus eliminating hacking vulnerabilities.
3Adaptability or versatility
If separate electronic systems are used for digital and non-digital assets, then system independence is maintained, but transmission is susceptible to interception and third-party exploitation
Solution Approach 1:
The patent merges the functionality of separate electronic systems by creating a unified blockchain-based platform that handles both digital and non-digital asset conversions. The electronic funding wallet linkage mechanism combines the independence benefits of separate systems with the security advantages of a unified, secure transmission channel. All conversions occur through the blockchain network using cryptographic security, eliminating the need for separate vulnerable transmission channels while maintaining system adaptability.
4Reliability
If digital wallets are linked to electronic funding wallets, then security is improved and off-chain credential transmission is eliminated, but system complexity increases
Solution Approach 1:
The patent applies universality by designing the electronic funding wallet linkage mechanism to serve multiple functions simultaneously. The same linkage infrastructure supports both conversion operations and security verification, eliminates credential transmission while enabling asset transfers, and works across different digital asset types. This multi-functionality reduces the need for separate specialized systems, thereby managing complexity while maintaining high security standards.
Data Source
AI summary
Blockchain-based systems and methods for implementing inflow/outflow of digital assets and non-digital assets. The blockchain-based systems and methods may include: (1) generating a set of digital tokens distributable on a distributed computer network; (2) assigning a subset of digital tokens of the set of digital tokens to a digital wallet of a user; (3) determining whether an electronic funding wallet of the user is linked to the digital wallet; and/or (4) executing an inflow/outflow algorithm by one or more processors of an electronic platform communicatively coupled to the distributed computer network.