Blockchain Transaction Authorization via Intermediary Payment Network
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Solution Overview
Problem
Blockchain transactions face challenges due to slow processing times and lack of risk assessment tools, making them less appealing to merchants and consumers who prefer faster and more secure transaction methods, and the anonymous nature of blockchain currencies complicates fraud detection and identity verification.
Innovation Solution
A system and method for authorizing blockchain transactions by storing account profiles with fiat and blockchain currency data, identifying risk values based on transaction amounts and currency availability, and determining authorization, which includes modifying transaction messages and transmitting them through a network of devices for secure processing.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If blockchain transactions are processed using traditional blockchain verification methods, then security and anonymity are maintained, but processing time increases significantly (around ten minutes)
Solution Approach 1:
The patent introduces a payment network as an intermediary layer between the blockchain and traditional fiat payment systems. This intermediary processes transactions using both blockchain verification and traditional payment network protocols, enabling faster processing while maintaining security. The payment network acts as a mediator that translates between blockchain transactions and traditional payment formats, resolving the speed conflict.
Solution Approach 2:
The patent segments the transaction processing into multiple components: blockchain verification for security, payment network processing for speed, and traditional fiat system integration for compatibility. By dividing the monolithic blockchain verification process into separable stages, the system can apply different processing speeds to different aspects of transaction handling.
2Reliability
If blockchain transactions use anonymous addressing, then consumer privacy is protected, but fraud detection and risk assessment become difficult
Solution Approach 1:
The payment network serves as an intermediary that bridges anonymous blockchain addresses with traditional identity verification systems. It maintains the anonymity of blockchain addresses while enabling risk assessment and fraud detection through its integration with traditional payment networks that have established identity verification and risk management capabilities.
Solution Approach 2:
The system creates a universal transaction processing framework that handles both anonymous blockchain transactions and traditional identified transactions through the same payment network infrastructure. This multi-functional system can process transactions with varying levels of anonymity while applying appropriate risk assessment methods for each case.
3Reliability
If consumers use decentralized blockchain wallets, then security and anonymity are improved, but ease of operation and understanding deteriorate compared to traditional fiat accounts
Solution Approach 1:
The payment network acts as an intermediary that abstracts the complexity of blockchain wallet management from consumers. It provides a familiar interface similar to traditional banking while handling the underlying blockchain operations, making the technology accessible to users without requiring them to understand cryptographic wallets and private key management.
Solution Approach 2:
The system creates a copy of the traditional banking interface and user experience within the blockchain framework. By replicating familiar account structures, transaction formats, and user interactions from traditional fiat systems, the patent makes blockchain technology intuitive for users accustomed to conventional banking operations.
Data Source
AI summary
A method for authorization of a blockchain transaction includes: storing account profiles, each profile including an account identifier, fiat amount, and blockchain amount; receiving a transaction message, the transaction message being formatted based on transaction message standards and including a first data element that includes a specific account identifier and a second data element reserved for private use that includes a network identifier and transaction amount; identifying a specific account profile that includes the specific account identifier; identifying a risk value based on the transaction amount and at least one of: the fiat amount and blockchain amount; determining authorization of a transaction based on the identified risk value; modifying the transaction message based on the authorization determination; and transmitting the modified transaction message.