Cryptocurrency Payment Network with Trusted Intermediary Nodes
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Solution Overview
Problem
Cryptocurrencies face challenges such as long transaction times, lack of widespread acceptance, and security concerns due to anonymous identities, which hinder their adoption in retail and online transactions.
Innovation Solution
A payment service system that enables real-time transactions in various currencies, including cryptocurrencies, by facilitating conversions and maintaining anonymity while ensuring security through a trusted payment service, allowing customers to pay in any currency and merchants to receive payments in their preferred currency.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If cryptocurrencies are used for transactions, then direct transactions between parties are enabled with decentralized trust, but transaction times become impractically long
Solution Approach 1:
The patent segments the transaction verification process by introducing multiple validating nodes that independently verify transactions. Instead of relying on a single centralized authority or sequential blockchain confirmation, multiple nodes simultaneously validate transactions, thereby reducing overall transaction time while maintaining decentralized trust through segmented verification responsibilities.
Solution Approach 2:
The patent implements preliminary action by pre-establishing a network of validated nodes and pre-configuring the verification framework before transactions occur. Nodes are预先 authenticated and their cryptographic identities are established in advance, allowing them to immediately begin verifying transactions without delay, thus reducing transaction confirmation time while maintaining security.
2Ease of operation
If cryptocurrencies with anonymous identities are used, then user privacy is protected, but security concerns increase due to susceptibility to money laundering and criminal transactions
Solution Approach 1:
The patent introduces an intermediary layer of validating nodes that act as trusted mediators between anonymous users and the broader system. These nodes verify transaction legitimacy without exposing user identities, using cryptographic proof mechanisms to ensure transactions comply with legal requirements while preserving anonymity. The intermediary nodes serve as a security buffer that maintains both privacy and security.
Solution Approach 2:
The patent implements feedback mechanisms where validating nodes continuously monitor and evaluate transactions, providing real-time verification and rejection of suspicious activities. The system uses feedback loops to assess transaction patterns, node performance, and potential security threats, allowing dynamic adjustment of verification strictness while maintaining anonymous operation. This feedback-driven approach ensures security without compromising user privacy.
3Adaptability or versatility
If cryptocurrencies are widely accepted, then more merchants can accept payments, but exchange rate fluctuations create financial risk for business owners
Solution Approach 1:
The patent introduces validating nodes as intermediaries that can facilitate currency conversion and risk management. These nodes act as trusted intermediaries between cryptocurrency payers and fiat currency merchants, enabling merchants to accept cryptocurrency payments while automatically managing exchange rate risks through the intermediary's verification and conversion mechanisms.
Solution Approach 2:
The patent implements preliminary action by enabling merchants to pre-set their preferred receipt currency and exchange rate parameters before transactions occur. The system allows merchants to configure advance instructions for currency conversion, locking in exchange rates or setting acceptable ranges beforehand, thereby eliminating exposure to fluctuation risks while maintaining versatility in accepting multiple cryptocurrencies.
Data Source
AI summary
In one embodiment, a method includes receiving a request for payment associated with a transaction between a first user and a second user, where the request specifies a payment amount in a fiat currency and identifying an indication that the first user intends to satisfy the request for payment using a non-fiat instrument. The method also includes initiating a first transfer of a value corresponding to the payment amount in the non-fiat instrument from a first balance of the first user to one or more service balances of a payment service and initiating a second transfer of a value corresponding to the payment amount in the fiat currency from the one or more service balances of the payment service to a second balance of the second user.