Blockchain Sidechain for Diversity Compliance Monitoring
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Solution Overview
Problem
The anonymity in blockchains makes it difficult to monitor or enforce desired characteristics or regulations, such as promoting diversity, among participants, as it is challenging to determine the identity or compliance status of other participants.
Innovation Solution
A system and method for reporting diversity compliance in a blockchain network, where a blockchain node receives diversity data from participants, generates a new block with this data, and adds it to a sidechain, which is detected by a smart contract that analyzes the data and generates a reporting message indicating compliance or non-compliance, which is then transmitted to external systems.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of manufacture
If anonymity is provided to participants in blockchain, then participant privacy and decentralized participation are improved, but the ability to monitor and enforce diversity requirements is worsened
Solution Approach 1:
The patent segments participant information into two distinct parts: identifying information (stored on-chain for transparency and monitoring) and private information (stored off-chain for privacy protection). This segmentation allows the system to simultaneously achieve anonymity and monitorability by placing different types of data in appropriate locations - the sidechain stores diversity compliance data that can be monitored while the main blockchain maintains transaction anonymity.
Solution Approach 2:
The patent introduces a sidechain as an intermediary layer between the main blockchain and external monitoring systems. The sidechain acts as a mediator that stores diversity compliance data and enables monitoring without compromising the anonymity of the main blockchain. This intermediary structure allows regulatory agencies to access compliance information while participants maintain their privacy on the primary network.
2Reliability
If diversity data is stored on the main blockchain, then data immutability and security are improved, but blockchain size and processing complexity are worsened
Solution Approach 1:
The patent divides the blockchain system into two separate chains: the main blockchain that handles transactions and maintains immutability, and a sidechain that stores diversity compliance data. This segmentation prevents the main blockchain from becoming overloaded with additional data types, maintaining its performance and simplicity while still providing secure, immutable storage for compliance information on the sidechain.
Solution Approach 2:
The patent adds a dimensional layer to the blockchain architecture by introducing a sidechain that operates parallel to the main blockchain. This dimensional change allows diversity data to be stored in a separate space (the sidechain) that is linked to but distinct from the main chain, enabling independent management of compliance data without affecting the core blockchain's performance or complexity.
3Reliability
If manual monitoring of diversity compliance is implemented, then regulatory oversight is improved, but time consumption and operational costs are worsened
Solution Approach 1:
The patent implements self-service mechanisms where participants automatically submit their diversity compliance data to the sidechain through smart contracts. The system performs self-monitoring through automated smart contract execution that validates compliance data and generates reports without requiring manual intervention. This automated approach maintains reliable regulatory oversight while eliminating the time and resource costs associated with manual monitoring processes.
Solution Approach 2:
The patent establishes a feedback loop where smart contracts automatically monitor diversity compliance data stored on the sidechain and generate real-time compliance reports. This continuous feedback mechanism provides ongoing regulatory oversight by automatically detecting and reporting compliance status, eliminating the delays and inefficiencies of manual monitoring while maintaining high reliability through systematic, rule-based validation.
Data Source
AI summary
A method for reporting diversity compliance for participants in a blockchain network includes: receiving, by a blockchain node in the blockchain network, diversity data associated with a registered participant in a blockchain and generating a new block including the diversity data that is added to a sidechain to the blockchain. The blockchain includes a smart contract that when it detects addition of the generated new block to the sidechain or periodically self-executes to: analyze additional diversity data included in each of one or more blockchain data entries stored in the sidechain that are associated with the registered participant, generate a reporting message based on the analyzed additional diversity data, and transmit the generated reporting message to one or more external computing systems.