Commodity-Backed Payment System for Social Networks
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Solution Overview
Problem
Social networks face challenges in providing a stable international payment system due to currency instability, as users and merchants across borders require a reliable financial system for e-commerce transactions, and commodities like gold offer a stable value solution.
Innovation Solution
A payment system that converts user deposits into a commodity-backed account, allowing users to make purchases and transfers, with all transactions involving the purchase or sale of a backing commodity like gold, and assessing fees for financial transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a payment system uses national currencies for international transactions, then it is easy to operate and deposit funds, but the value of funds becomes unstable due to currency fluctuations
Solution Approach 1:
The patent introduces a commodity-backed account system as an intermediary between users and the payment network. Instead of directly holding national currencies, the system converts deposits into commodity-backed accounts (backed by gold, silver, or other commodities). This intermediary layer isolates users from currency fluctuations while maintaining ease of operation, as users can still deposit and withdraw funds through the payment network interface.
2Reliability
If a payment system is backed by commodities like gold, then value stability is maintained against currency fluctuations, but the system complexity increases due to commodity conversion and management
Solution Approach 1:
The commodity-backed account system operates autonomously to manage the complexity of commodity conversions. When users deposit funds, the system automatically converts them into commodity-backed accounts at prevailing rates. When users withdraw or make purchases, the system automatically converts from commodity-backed accounts back to local currencies. This self-service mechanism shields users from the operational complexity while maintaining value stability.
Solution Approach 2:
The payment network acts as an intermediary that abstracts away the complexity of commodity management from users. Users interact with the system using familiar currency deposits and withdrawals, while the underlying commodity conversions are handled transparently by the system's automated mechanisms.
3Reliability
If all transfers from cash account pass through cafe account to purchase backing commodity, then value stability is ensured, but transaction time and complexity increase
Solution Approach 1:
The system maintains continuous commodity-backed account balances by automatically converting cash account funds through the cafe account. This continuous conversion ensures that sufficient commodity-backed funds are always available to cover transactions, maintaining value stability without requiring users to manually time their conversions. The automated, continuous process minimizes the perceptible time delay for users.
Data Source
AI summary
Embodiments are directed towards providing a computer-implemented method and a network device that provides an electronic payment system for social networks, including maintaining (i) records of registered users, (ii) records of registered merchants, (iii) a credit account for each registered user and registered merchant wherein credits are backed by a commodity and a credit corresponds to a fraction of a standard unit of the commodity, receiving from a user device instructions to deposit a designated amount of currency from a user's account into the user's credit account, using the received instructions, obtaining the designated amount of currency, electronically purchasing from a seller an amount of a specified commodity equivalent to the designated amount of currency minus any transaction fee assessed by the seller, and updating the user's credit account by adding a number of credits equivalent to the amount of the purchased commodity.