Blockchain Token Authorization Against SIM Cloning Fraud
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Existing two-factor authentication methods, relying on one-time passwords (OTPs) sent to customer devices, are vulnerable to fraud when SIM cards are cloned, allowing thieves to conduct fraudulent transactions that are verified as legitimate.
Innovation Solution
Implementing unique, secure, blockchain-based tokens linked to payment cards and devices, managed by smart contracts, which evaluate real-time transaction conditions to authenticate transactions and authorize payments only when conditions are satisfied.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Speed
If OTP-based two-factor authentication is used, then transaction authorization speed is improved, but security against SIM cloning fraud deteriorates
Solution Approach 1:
The patent introduces a blockchain-based token as an intermediary between the authentication system and the transaction verification process. Instead of relying solely on OTPs sent to potentially cloned SIM cards, the system uses blockchain tokens that cannot be cloned and require complex key pairs for authentication, thereby maintaining fast authorization while significantly improving security against SIM cloning fraud
Solution Approach 2:
The patent replaces the traditional OTP-based mechanical authentication system with a cryptographic system based on blockchain technology. The new system uses public-private key pairs and blockchain smart contracts to verify transaction authenticity, substituting the vulnerable OTP mechanism with a more secure cryptographic verification process that maintains speed while enhancing reliability
2Reliability
If blockchain-based tokens with smart contracts are implemented, then security against fraud is improved, but device complexity increases
Solution Approach 1:
The patent implements a universal blockchain token system that can be integrated across multiple devices and platforms. The token serves multiple functions including authentication, authorization, and transaction verification, reducing the need for separate security systems on each device while maintaining high security standards through the standardized blockchain protocol
Solution Approach 2:
The blockchain smart contracts automatically verify transaction authenticity and execute authorization decisions without requiring complex manual verification processes. The system performs self-service security checks through automated smart contract execution, reducing the operational complexity burden on users and devices while maintaining strong fraud protection
Data Source
AI summary
Secure blockchain (BC)-based tokens are issued and linked to payment cards and/or devices of customers. Custom conditions associated with the tokens are stored in smart contracts on a BC. The tokens are stored in a cloud-based key vault and/or in the BC. Validation of a token for access a smart contract on the BC can only be made by a financial institution (FI) to the key vault. Real-time information for a transaction device, for transaction information, and/or for the customer is provided as input data to the smart contract for evaluation of the conditions. After the token is authenticated by the key vault, the real-time information is gathered and passed to the corresponding smart contract on the BC for evaluation. The FI receives transaction authorization or transaction denial based on the smart contract's evaluation of the conditions.