Blockchain Trade Settlement System for Simultaneous Obligation Fulfillment
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Solution Overview
Problem
Existing trade settlement systems fail to guarantee simultaneous fulfillment of obligations in trade transactions, particularly for remote parties, leading to risks of default.
Innovation Solution
A trade settlement system utilizing smart contracts on a blockchain for processing settlements and changes of ownership, incorporating electronic and virtual currencies to facilitate simultaneous fulfillment of obligations among shipper, consignee, carrier, and insurer nodes.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional trade settlement systems are used for remote trade transactions, then data management is achieved, but simultaneous fulfillment of obligations cannot be guaranteed
Solution Approach 1:
The patent introduces a blockchain network as an intermediary between trade parties. The blockchain acts as a neutral mediator that records and verifies all settlement transactions, ensuring that obligations are fulfilled simultaneously through its distributed consensus mechanism. This resolves the contradiction by providing reliability without requiring complex bilateral verification systems between remote parties.
Solution Approach 2:
The patent creates digital copies of trade documents and obligations on the blockchain. By replicating settlement data across multiple nodes in the distributed ledger, the system ensures that all parties have access to the same verified information, guaranteeing simultaneous fulfillment of obligations without complex coordination.
2Reliability
If smart contracts on blockchain are used for settlement, then simultaneous fulfillment of obligations is guaranteed, but system complexity increases
Solution Approach 1:
The patent implements self-executing smart contracts that automatically verify and settle obligations without human intervention. The contracts contain pre-programmed logic that automatically triggers settlement when conditions are met, eliminating the need for complex manual verification processes and reducing operational complexity despite the underlying blockchain infrastructure.
Solution Approach 2:
The patent uses smart contracts to pre-define settlement rules and conditions before trade transactions occur. By establishing the settlement logic in advance within the contract code, the system automatically ensures simultaneous fulfillment of obligations without requiring complex real-time coordination or verification mechanisms during execution.
3Productivity
If electronic money and virtual currency are used for settlement, then settlement efficiency is improved, but security risks may increase
Solution Approach 1:
The patent uses the blockchain network as a secure intermediary that verifies and records all electronic and virtual currency transactions. The distributed ledger technology provides cryptographic security and consensus validation, ensuring that the efficiency benefits of digital currencies do not compromise settlement security or reliability.
Data Source
AI summary
In a trade settlement system that uses one or more computers, for a bilateral contract including both obligations of a change of name of a vesting destination from one party to another party of contract parties, the change of name accompanying a transfer of ownership of an article to be sold or purchased in a trade, and settlement using predetermined electronic money for a consideration relating to the sale and purchase, each of the one or more computers includes: a settlement processing unit that performs the settlement by using a smart contract on a blockchain; and a processing unit that processes the change of name by using the smart contract on the blockchain, in a case where the settlement has been successful.