Cryptocurrency Payment Backing Account Device for Fraud Prevention
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Solution Overview
Problem
Current payment systems are vulnerable to security breaches, fraud, and identity theft, and are inconvenient, time-consuming, and expensive, while cryptocurrencies face acceptance issues due to volatility and technical challenges for merchants, and existing digital wallets are susceptible to fraud attacks.
Innovation Solution
A cryptocurrency payment system that includes a source computing device, a destination computing device, a network computing device, and a cryptocurrency-based payment backing account device, which facilitates real-time cryptocurrency payments, locks system cryptocurrency for verification, and keeps transaction details private, using a network application to associate devices and manage payments through various interfaces like NFC, Bluetooth, or network connections.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional payment card systems are used, then transaction processing is well-established and widely accepted, but the system is vulnerable to security breaches, fraud, and identity theft
Solution Approach 1:
The patent introduces a payment backing account device as an intermediary between the digital wallet application and the payment processing network. This intermediary verifies transactions and manages cryptocurrency conversions, adding a layer of security that prevents direct exposure of sensitive payment information while maintaining transaction integrity and reducing fraud vulnerability
Solution Approach 2:
The system uses tokenization to create digital representations (copies) of payment information stored in the digital wallet. These tokenized copies are used for transactions instead of actual card numbers, preventing identity theft while maintaining payment functionality. The payment backing account device then verifies and processes these tokenized transactions
2Productivity
If payment card authorization and clearing processes are followed, then transactions are processed through established financial institutions, but the process is inconvenient, time-consuming, and expensive
Solution Approach 1:
The system performs preliminary actions by pre-storing payment information in a digital wallet application on the user's device. When a transaction is initiated, the pre-stored information is immediately available for quick verification and processing through the payment backing account device, eliminating the need for time-consuming real-time authorization requests to multiple financial institutions
Solution Approach 2:
The patent extracts the payment verification function from the traditional multi-institutional clearing process and consolidates it into a single payment backing account device. This extraction simplifies the transaction flow, reducing the number of steps and time required while maintaining security through cryptographic verification
3Ease of manufacture
If merchants accept cryptocurrency payments, then payment processing fees are reduced and transactions are faster, but merchants face volatility risks and technical challenges
Solution Approach 1:
The payment backing account device serves as an intermediary that automatically manages cryptocurrency volatility for merchants. When a customer makes a cryptocurrency payment, the device verifies the transaction and can automatically convert the cryptocurrency to stable fiat currency or hold it in a backed account, shielding the merchant from price fluctuations while maintaining the simplicity of cryptocurrency payment acceptance
Solution Approach 2:
The system enables merchants to accept cryptocurrency payments without requiring them to manage the technical complexities of cryptocurrency storage, security, or conversion. The payment backing account device handles all technical aspects automatically, allowing merchants to simply verify transactions through the streamlined process while the system manages volatility and technical challenges in the background
4Ease of operation
If digital wallet applications are used, then payment convenience is improved, but the system remains susceptible to fraud attacks and security breaches
Solution Approach 1:
The patent introduces a payment backing account device as a trusted intermediary between the digital wallet application and the payment processing network. This intermediary verifies transactions and manages cryptocurrency conversions, adding a layer of security that prevents direct exposure of sensitive payment information while maintaining transaction integrity and reducing fraud vulnerability
Solution Approach 2:
The system uses tokenization to create digital representations (copies) of payment information stored in the digital wallet application. These tokenized copies are used for transactions instead of actual card numbers, preventing identity theft while maintaining payment convenience. The payment backing account device then verifies and processes these tokenized transactions
Data Source
AI summary
A method includes receiving, by a cryptocurrency-based payment backing account device of a cryptocurrency payment system, a lock instruction from a network computing device to lock an amount of system cryptocurrency based on real-time payment information regarding a cryptocurrency-based payment from a source computing device to a destination computing device. The method further includes determining, by the cryptocurrency-based payment backing account device, a cryptocurrency-based payment backing account associated with the real-time payment information and locking the amount of system cryptocurrency. The method further includes when the release instruction from the network computing device is received, releasing the amount of the system cryptocurrency and when the consume instruction from the network computing device is received, transferring the amount of the system cryptocurrency to an account associated with the network computing device to cover the cryptocurrency-based payment.