Cryptocurrency Settlement Layer Using Collateral-Backed Consensus

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Solution Overview

Problem

Current payment systems using cryptocurrencies are vulnerable to security breaches, fraud, and identity theft, and are inconvenient, time-consuming, and expensive, with merchants reluctant to adopt cryptocurrency payments due to volatility and the need for expensive upgrades, and existing digital wallets are susceptible to fraud attacks.

Innovation Solution

A secure and trusted cryptocurrency acceptance system that includes a payor computing device, payee computing device, cryptocurrency acceptance network computing device, cryptocurrency exchange device, and consensus devices, utilizing a stake pool unit with collateral cryptocurrency to secure transactions, ensuring privacy and fraud prevention through a decentralized consensus network.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If traditional payment processing networks are used for cryptocurrency transactions, then transaction security and fraud prevention improve, but transaction speed and convenience deteriorate due to multiple intermediaries and validation steps

Engineering Contradiction:

Improvetransaction securityVSAvoidtransaction processing time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The patent extracts the core security function from traditional multi-intermediary payment networks and implements it through a decentralized consensus mechanism. The consensus network validates transactions directly without requiring traditional payment processing intermediaries, thereby maintaining security while eliminating time-consuming validation steps.

Inventive Principle:

Principle #2Taking out (Extraction)

Solution Approach 2:

The patent introduces a stake pool unit as an intermediary that holds collateral cryptocurrency to secure transactions. This stake pool acts as a mediator that provides security guarantees without requiring the full traditional payment processing infrastructure, thus improving both security and transaction speed.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Ease of operation

If digital wallets store actual account or card numbers for transactions, then transaction convenience improves, but security and fraud vulnerability worsen

Engineering Contradiction:

Improvetransaction convenienceVSAvoidsecurity

Core Design Contradiction:

Ease of operationVSReliability

Solution Approach 1:

The patent uses tokenization to create digital representations (tokens) of account information instead of storing actual account or card numbers. These tokens can be used for transactions while the real account data remains secure in the wallet, providing both convenience and security.

Inventive Principle:

Principle #26Copying

3Loss of energy

If merchants accept cryptocurrency payments directly, then transaction fees and processing costs decrease, but volatility risk and infrastructure investment requirements increase

Engineering Contradiction:

Improveprocessing feesVSAvoidinfrastructure requirements

Core Design Contradiction:

Loss of energyVSDevice complexity

Solution Approach 1:

The patent introduces a settlement layer with stake pool units as intermediaries between merchants and cryptocurrency networks. These stake pools hold collateral and manage volatility risk, allowing merchants to accept cryptocurrency payments with reduced infrastructure requirements and protected against price fluctuations.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent implements collateral requirements in advance through stake pool units. Merchants post collateral before accepting cryptocurrency payments, which cushions them against volatility risk and potential fraud, enabling them to accept crypto payments without extensive infrastructure investments.

Inventive Principle:

Principle #11Beforehand cushioning (Prior cushioning)

4Reliability

If collateral requirements are increased for stake pool units, then fraud prevention and transaction security improve, but transaction speed and network throughput worsen due to additional validation steps

Engineering Contradiction:

Improvefraud preventionVSAvoidtransaction throughput

Core Design Contradiction:

ReliabilityVSProductivity

Solution Approach 1:

The patent requires stake pool units to post collateral in advance before they can facilitate transactions. This preliminary action establishes security guarantees upfront, allowing the consensus network to validate transactions more quickly without needing to verify financial security during each transaction processing step.

Inventive Principle:

Principle #10Preliminary action

Data Source

PatentUS12481983B2Universally accepted cryptocurrency settlement layer

Publication Date: 2025.11.25 FLEXA INC

AI summary

A method includes initiating, by a payor computing device associated with a first jurisdiction, a payment of a desired amount to a payee computing device associated with a second jurisdiction. The method further includes receiving, by a cryptocurrency acceptance network computing device, a request to process the payment and placing a hold on collateral cryptocurrency. The method further includes sending, by the payor computing device, first cryptocurrency to the cryptocurrency acceptance network computing device, where the cryptocurrency acceptance network computing device sends the first cryptocurrency to a first cryptocurrency exchange device associated with the first jurisdiction to be converted to an amount of universally accepted cryptocurrency and sent to a second cryptocurrency exchange device associated with the second jurisdiction where the second cryptocurrency exchange device converts the amount of the universally accepted cryptocurrency to a desired currency and sends the amount of the desired currency to the payee computing device.