Blockchain P2P Ad Auction Smart Contract Privacy
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Solution Overview
Problem
Current online advertising systems rely on intermediaries for central auctioning, which compromises user privacy, leads to ad fatigue, and is prone to fraud.
Innovation Solution
A peer-to-peer network using smart contracts and Paillier homomorphic encryption for a uniform price auction, where consumers specify their needs and receive cryptocurrency for ad attention, ensuring bid privacy and secure transactions through a blockchain-based system.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If intermediaries are used for central auctioning of advertising space, then advertising allocation can be centralized and controlled, but user privacy is compromised and the system becomes prone to fraud
Solution Approach 1:
The patent extracts the intermediary from the advertising auction system by implementing a peer-to-peer network where consumers and advertisers interact directly through smart contracts on the blockchain. This eliminates the need for central auctioning platforms while maintaining system reliability through cryptographic verification and decentralized consensus mechanisms.
Solution Approach 2:
The patent introduces blockchain technology and smart contracts as a new type of intermediary that provides trustless verification. Instead of traditional centralized platforms, the blockchain acts as a decentralized mediator that enables direct peer-to-peer transactions while preserving user privacy through cryptographic techniques and preventing fraud through immutable ledger verification.
2Productivity
If centralized platforms collect consumer preferences for auctioning ads, then advertising targeting can be optimized, but ad fatigue increases and privacy is endangered
Solution Approach 1:
The patent enables consumers to directly specify their advertising needs and preferences without intermediary platforms collecting and processing this information. Consumers self-manage their ad preferences and receive payments directly from advertisers through smart contracts, eliminating the need for centralized preference collection while maintaining targeted advertising efficiency.
3Reliability
If traditional centralized auctioning is used, then ad pricing can be controlled by platforms, but the system is plagued with ad fraud and lacks transparency
Solution Approach 1:
The patent replaces the mechanical centralized auction system with a cryptographic blockchain-based smart contract system. Pricing integrity is maintained through automated smart contract execution that enforces agreed-upon terms, while ad fraud is prevented through the immutable and transparent nature of the blockchain ledger that records all transactions verifiably by all participants.
Data Source
AI summary
Method for online advertising auction on a peer-to-peer network includes: deploying a smart contract to publish a need from a consumer; receiving encrypted ad bids by the smart contract; storing the received ad bids in a hash function; reducing a number of ads that can be displayed by the consumer; transmitting the ad price to the consumer via the peer-to-peer computer network, when the hashed verification code is received from the consumer verifying that the consumer has viewed the ad content within an ad-viewing period of time; transmitting a difference between the advance payment and the ad price to the advertiser, by the smart contract via the peer-to-peer network; and ending the online advertising auction.