Physical Commodity Segmentation for Secure Ownership Trading
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Solution Overview
Problem
Existing systems for trading and storing physical commodities, such as precious metals, face issues like theft, impracticality for transport, risk of forgery and debasement, and regulatory complexities, while alternatives like ETFs and metal accounts have significant disadvantages including high minimum investments, transferability limitations, and counterparty risks.
Innovation Solution
A system and method that subdivides physical commodities into distinct and identifiable segments, allowing secure storage and transfer of ownership without physical separation, using a map to allocate ownership to users, and utilizing computing devices for managing these transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If physical commodities are stored and traded in their entirety, then ownership transfer is straightforward, but security risks including theft and forgery increase
Solution Approach 1:
The patent divides physical commodities into multiple distinct segments, where each segment represents a separable portion of the whole commodity. This segmentation allows ownership of specific portions to be transferred without moving the entire commodity, reducing security risks while maintaining system manageability through digital tracking of segment ownership.
2Adaptability or versatility
If physical commodities are divided into smaller units, then tradability and accessibility improve, but physical separation and verification become more difficult
Solution Approach 1:
The patent creates digital representations (copies) of physical commodity segments that contain all necessary verification information. These digital copies enable easy transfer and verification of ownership without requiring physical separation or handling of the actual commodity segments, thus improving tradability while maintaining verification capability.
3Ease of operation
If traditional deposit currencies are used, then transport and storage become easier, but counterparty risks and lack of tangible asset backing increase
Solution Approach 1:
The patent introduces a digital tracking system that acts as an intermediary between the physical commodity and the owner. This system records and verifies ownership of specific commodity segments without requiring physical possession, combining the ease of digital operation with the reliability of tangible asset backing by maintaining direct links to physical commodities in secure storage.
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.