Crypto Payment Authorization Without Ledger Confirmation Delays
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Solution Overview
Problem
Cryptographic asset transactions on distributed ledgers often require significant time for confirmation, which can be inconvenient or unacceptable for day-to-day transactions, especially when using merchant systems or point-of-sale devices.
Innovation Solution
A system and method that includes a crypto-transaction layer to process transactions involving multiple crypto-assets, utilizing a transaction optimization engine to determine optimal crypto-asset exchanges based on current price data and confidence conditions, allowing immediate authorization of transactions without waiting for ledger confirmation.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If cryptographic asset transactions are processed through distributed ledgers, then transaction security and immutability are improved, but transaction confirmation time increases significantly
Solution Approach 1:
The system performs preliminary actions by pre-calculating optimal crypto-asset exchange combinations and preparing transaction bundles before actual payment is needed. The transaction optimization engine determines the best mix of crypto-assets to exchange based on current prices and confidence conditions, so that when a payment request arrives, the authorization can be immediate without waiting for ledger confirmation.
Solution Approach 2:
The patent introduces an intermediary layer (the transaction optimization engine and authorization system) between the payment request and the distributed ledger transaction. This intermediary evaluates confidence conditions, determines optimal asset exchanges, and provides authorization signals without requiring synchronous waiting for ledger confirmation, thus decoupling the payment authorization from the blockchain confirmation time.
2Measurement precision
If the system waits for ledger confirmation before authorizing transactions, then transaction accuracy is improved, but customer satisfaction and transaction speed deteriorate
Solution Approach 1:
The system implements feedback mechanisms by continuously monitoring crypto-asset prices, confidence conditions, and transaction states. The transaction optimization engine uses this feedback to dynamically adjust exchange ratios and determine when confidence conditions are met, allowing the system to provide accurate authorizations based on real-time data without requiring synchronous ledger confirmation.
Solution Approach 2:
The patent changes the parameter of transaction authorization from synchronous (waiting for ledger confirmation) to asynchronous (providing immediate authorization based on confidence conditions). The system monitors multiple parameters including crypto-asset prices, exchange ratios, and confidence thresholds, and authorizes transactions when these parameters indicate sufficient confidence, thereby improving speed while maintaining accuracy through continuous parameter monitoring.
3Speed
If the system optimizes for immediate transaction authorization, then transaction speed is improved, but the complexity of managing multiple crypto-assets and price data increases
Solution Approach 1:
The patent segments the complex transaction processing into distinct functional modules: a transaction optimization engine that handles crypto-asset exchange calculations, an authorization system that evaluates confidence conditions, and a ledger interaction layer. This segmentation allows each component to specialize in specific tasks, managing complexity through modular design while enabling immediate authorization through coordinated operation of these segments.
Solution Approach 2:
The transaction optimization engine serves multiple functions: it determines optimal crypto-asset exchange combinations, calculates exchange ratios based on current prices, evaluates confidence conditions, and generates authorization signals. This multi-functionality reduces overall system complexity by consolidating multiple responsibilities into a single versatile component rather than requiring separate systems for each function.
Data Source
AI summary
A system and method for handling crypto-asset transactions includes: receiving from a payment processing system an electronic transaction request including: a payment token corresponding to a payment identifier associated with the customer account, and a transaction amount in a fiat currency; determining current price data corresponding to a first crypto-asset and a second crypto-asset associated with the customer account; associating the electronic transaction request with at least one data processing task for executing at least one crypto-asset transaction; and when at least one crypto-asset confidence condition is satisfied based on the current price data of at least one of the first crypto-asset or the second crypto-asset, generating signals for providing, via the payment processing system, an indication that the electronic transaction request is authorized without waiting for confirmation of execution of the at least one crypto-asset transaction.