Cryptocurrency Transaction Batch Settlement via Smart Contracts
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Solution Overview
Problem
Current payment processing systems involving cryptocurrencies are inefficient, requiring constant conversion to fiat currency for transactions across multiple merchants, leading to high transactional costs.
Innovation Solution
A method for settling cryptocurrency transactions through smart contracts between users, merchants, and service providers, allowing for multiple transactions to be settled in a single instance, minimizing the need for frequent token transfers and associated fees.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of energy
If multiple cryptocurrency transactions are settled individually, then transaction processing is simple, but transactional fees are high
Solution Approach 1:
The patent combines multiple individual cryptocurrency transactions into a single batch settlement operation. The system aggregates transactions from multiple merchants and users, then executes them as one consolidated transaction on the blockchain, thereby reducing the number of separate fee-paying operations while managing the complexity through automated matching algorithms.
Solution Approach 2:
The settlement system performs multiple functions simultaneously: it matches buyers and sellers, calculates net positions, executes transactions, and updates balances all within a single batch operation. This multi-functional approach consolidates what would otherwise require multiple separate operations, reducing fees while handling the complexity internally.
2Loss of energy
If cryptocurrency is converted to fiat currency for each transaction, then merchants can receive payments, but conversion costs increase
Solution Approach 1:
The system merges multiple cryptocurrency transactions into a single settlement batch, allowing merchants to receive cryptocurrency payments without individual conversion to fiat for each transaction. The batch settlement handles multiple merchants' receipts simultaneously, reducing conversion costs while maintaining payment flexibility through automated processing.
Solution Approach 2:
The patent introduces a settlement system as an intermediary that manages cryptocurrency transactions between users and merchants. This intermediary handles the complexity of batch processing, matching, and settlement, allowing direct cryptocurrency payments without requiring merchants to individually convert to fiat, thereby reducing conversion costs while maintaining system adaptability.
3Productivity
If token transfers are executed frequently, then transactions are settled quickly, but associated fees increase
Solution Approach 1:
The system implements periodic batch settlement instead of continuous individual transactions. Multiple transactions are accumulated and settled together in periodic batches, maintaining productivity by processing all transactions efficiently while reducing fees by minimizing the frequency of separate token transfer operations on the blockchain.
Solution Approach 2:
The patent merges multiple individual token transfers into a single consolidated transfer operation. By combining the settlement of multiple transactions into one batch operation, the system maintains the productivity of settling all transactions while reducing fees by executing fewer separate token transfers on the blockchain network.
Data Source
AI summary
A method for settling cryptocurrency transactions, comprising entering a smart contract, on a crypto currency network, between a user, a merchant, and a service provider account (SPA), the SPA associated with a service provider. Method may include determining whether to approve the amount for the transaction based on spending power associated with the user, the spending power calculated as a wallet balance associated with a user minus a card balance associated with the user, approving the request from the merchant based on the determined approval, updating, the card balance associated with the user and a merchant account balance, based on approving the amount for the transaction, and forwarding a new transaction request to the crypto-currency network to execute the smart contract, and initiating a token transfer on the cryptocurrency network by executing the smart contract.