Commodity Segment Mapping for Secure Partial Ownership Transfer
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Solution Overview
Problem
Existing systems for trading and storing physical commodities like precious metals face issues such as theft, impracticality for everyday commerce, high risk of forgery and debasement, and regulatory complexities, while alternatives like ETFs and metal accounts come with their own disadvantages.
Innovation Solution
A system and method for subdividing physical commodities into distinct and identifiable segments, which are stored in a secure vault and tracked using a map, allowing ownership transfer without physical separation, thus maintaining the benefits of physical commodities while reducing risks and regulatory barriers.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If physical commodities are traded in whole units, then ownership transfer is straightforward, but the commodity cannot be divided for partial ownership or smaller denomination transactions
Solution Approach 1:
The patent divides a physical commodity into multiple virtual segments represented in a data structure (map), allowing the commodity to be traded in partial units without physical division. Each segment is tracked separately with unique identifiers, enabling flexible ownership transfer of specific portions while the physical commodity remains intact in secure storage.
2Reliability
If physical commodities are transported for trading, then direct ownership transfer occurs, but security risks and transaction costs increase
Solution Approach 1:
The patent creates virtual representations (copies) of the physical commodity in a digital map, allowing ownership transfers to occur through data updates rather than physical movement. The actual commodity remains securely stored while multiple ownership states are tracked and transferred electronically, eliminating transport time and associated security risks.
3Reliability
If physical commodities are stored securely, then safety is improved, but accessibility for trading and retrieval becomes more difficult
Solution Approach 1:
The patent introduces a digital map and control system as an intermediary between the secure storage facility and traders. The map tracks ownership and segments of commodities in storage, allowing buyers and sellers to complete transactions electronically without needing physical access to the stored commodities. Retrieval can be initiated through the system without compromising security protocols.
4Adaptability or versatility
If traditional commodity trading systems are used, then direct ownership is maintained, but regulatory compliance and counterparty risks increase
Solution Approach 1:
The patent implements a centralized digital map that continuously tracks ownership, segments, and transaction states of physical commodities. This feedback mechanism provides real-time visibility into commodity locations and ownership status, enabling regulatory compliance through transparent recording of all transactions and reducing counterparty risks by verifying ownership before transfers.
Data Source
AI summary
A method can include obtaining a physical commodity that is divided into one or more physical units. The method can further include storing the physical commodity in a secure vault. Additionally, a map can be utilized to subdivide each of the one or more physical units into a plurality of segments. Each of the plurality of segments can be tangible portions of the physical unit that are distinct and identifiable. Subdividing each of the one or more physical units can render the physical units unaltered. Further, the map can be utilized to assign ownership of the plurality of segments to one or more owner users. The method can additionally include receiving an instruction to transfer ownership of a particular segment of the plurality of segments from a particular owner user to a buying user, and assigning in the map ownership of the particular segment to the buying user.