Blockchain Data Localization Compliance via Segmented Node Storage

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Solution Overview

Problem

Blockchain networks face compliance issues with data localization regulations due to their decentralized nature, where nodes worldwide store all transaction data, violating geographic data storage requirements.

Innovation Solution

Implementing a system where nodes in a blockchain network store an index of countries associated with each wallet, ensuring transactions are processed and stored within the relevant country, using smart contracts or local data storage to manage and transmit data accordingly, thus adhering to data localization rules.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If nodes are distributed throughout the world to enable decentralized blockchain operation, then the blockchain's decentralization and global accessibility are improved, but compliance with data localization regulations deteriorates

Engineering Contradiction:
ImprovedecentralizationVSAvoidregulatory compliance
Core Design Contradiction:
Adaptability or versatilityVSObject-affected harmful factors

Solution Approach 1:

The patent segments the blockchain network into geographically distributed node groups, where each group operates semi-independently within its jurisdiction. Nodes are organized by country/region, creating segmented validation groups that maintain decentralization while respecting data localization boundaries. This segmentation allows the blockchain to remain distributed globally while ensuring data stays within appropriate jurisdictions.

Inventive Principle:
Principle #1Segmentation

Solution Approach 2:

The patent implements local quality by requiring each geographic node group to store and validate only transactions relevant to its jurisdiction. Local nodes maintain copies of the blockchain tailored to their region, storing data with local connections rather than uniformly distributing all data across all nodes. This ensures data localization compliance while preserving the decentralized nature of the network through multiple local copies.

Inventive Principle:
Principle #3Local quality

2Reliability

If every node stores a complete copy of the entire blockchain, then the blockchain's immutability and verification accuracy are maintained, but data localization compliance deteriorates

Engineering Contradiction:
Improveblockchain accuracyVSAvoiddata localization compliance
Core Design Contradiction:
ReliabilityVSObject-affected harmful factors

Solution Approach 1:

The patent segments the blockchain data storage by geographic jurisdiction, where each node group stores only the subset of transactions relevant to its region. Instead of every node holding a complete copy, nodes are divided into specialized groups that maintain localized copies, ensuring both data localization compliance and the ability to verify transactions through distributed validation across multiple regional nodes.

Inventive Principle:
Principle #1Segmentation

Solution Approach 2:

The patent applies local quality by having each node store a customized version of the blockchain containing only transactions with local connections. Local nodes maintain complete accuracy for their jurisdiction's transactions while excluding foreign transactions, thereby achieving data localization compliance without sacrificing verification reliability within each regional context.

Inventive Principle:
Principle #3Local quality

3Object-affected harmful factors

If transactions are routed to foreign nodes for cross-border transactions, then data localization compliance is improved, but network complexity and transaction processing time increase

Engineering Contradiction:
Improvedata localization complianceVSAvoidnetwork architecture
Core Design Contradiction:
Object-affected harmful factorsVSDevice complexity

Solution Approach 1:

The patent applies preliminary action by pre-organizing nodes into geographic groups and pre-determining transaction routing paths based on jurisdictional boundaries. Transaction routing rules are established in advance, allowing nodes to quickly determine the appropriate destination group without complex real-time decision-making. This reduces processing overhead while maintaining compliance.

Inventive Principle:
Principle #10Preliminary action

Solution Approach 2:

The patent introduces intermediary components that facilitate cross-border transaction routing between geographic node groups. These intermediaries manage the complexity of cross-jurisdictional transactions, coordinating between different regional node groups to ensure proper routing and compliance. This intermediary layer absorbs the complexity, keeping individual node operations simple while maintaining overall network compliance.

Inventive Principle:
Principle #24Intermediary (Mediator)

Data Source

PatentUS11809415B2Method and system for data localization-compliant blockchain processing and storage
Publication Date: 2023.11.07 MASTERCARD INT INC
  • US11809415B2 patent drawing
  • US11809415B2 patent drawing
  • US11809415B2 patent drawing

AI summary

A method for ensuring compliance with data localization rules and regulations for blockchain data values in a blockchain network includes: a local node in a first country receiving a submission for a new blockchain transaction; identifying that the new blockchain transaction involves at least one entity in a foreign country; confirming the new blockchain transaction; transmitting the confirmed blockchain transaction to a foreign node located in the foreign country; generating a new block in the local node that includes the confirmed blockchain transaction; and distributing the new block to other nodes located in the same country as the local node.