Blockchain Token Validation Through On-Chain History and Title Registries
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Solution Overview
Problem
Existing blockchain technologies lack efficient methods for validating tokens that have not been electronically countersigned by an authorized signatory, limiting their versatility and security in applications beyond cryptocurrency.
Innovation Solution
A computer-implemented method and system for validating tokens by inspecting blockchain transactions, following a logical path to establish token validity, and maintaining a title registry database to record token transfers, ensuring authentication by an authorized signatory.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If blockchain technology is used for token validation without authorized signatory countersigning, then versatility and efficiency are improved, but security and reliability deteriorate
Solution Approach 1:
The patent introduces an intermediary validation mechanism that bridges the gap between decentralized efficiency and centralized security. The system uses a validation service that acts as a mediator between token holders and the blockchain, verifying token authenticity through a combination of on-chain data inspection and off-chain validation logic, thereby maintaining both versatility and security
Solution Approach 2:
The patent implements preliminary validation actions by pre-establishing validation rules, authorized signatory lists, and token metadata before transactions occur. The system performs preliminary checks on token validity, ownership history, and authorization status before allowing transfers, ensuring security is built-in rather than added later
2Reliability
If traditional token validation methods are used, then security is maintained, but processing speed and efficiency deteriorate
Solution Approach 1:
The patent segments the validation process into distinct modular components: on-chain transaction inspection, off-chain validation logic execution, authorized signatory verification, and token metadata validation. This segmentation allows each component to be optimized independently, improving overall processing speed while maintaining security through comprehensive multi-layer validation
Solution Approach 2:
The patent applies partial validation actions by selectively validating only the necessary aspects of a transaction based on token type and risk level. High-value or high-risk transactions undergo more extensive validation, while low-risk transactions receive streamlined validation, optimizing processing speed without compromising security where needed
3Reliability
If comprehensive token validation is performed, then reliability is improved, but device complexity and system complexity deteriorate
Solution Approach 1:
The patent creates a universal validation service that handles multiple token types and validation scenarios through a single unified system. The validation service can process various token categories (cryptocurrency, fiat, commodities, securities) using the same core validation architecture, reducing system complexity while maintaining comprehensive authentication reliability across different application domains
Data Source
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AI summary
A computer-implemented method of determining the validity of a token (T) associated with a quantity of cryptocurrency is provided. In some embodiments, the method comprises: a second user (B) receiving, over a communications network, a first transaction comprising a transfer of the token (T) from a first user (A) to the second user (B), querying a peer-to-peer distributed ledger to determine whether an authenticated transaction associated with the token (T) can be identified, wherein the authenticated transaction comprises a previous transaction associated with the token (T) and wherein the token (T) has been authorised and responsive to identifying an authenticated transaction, determining that the token (T) is valid. In some embodiments, the method comprises: a second user: receiving, over a communications network, a first transaction comprising a transfer of the token from a first user to the second user; querying a title registry database to determine if a second transaction comprising a transfer of the token is recorded in the title registry database; and responsive to determining that the second transaction is recorded in the title registry database, determining that the token is valid.