Cryptocurrency Transaction Risk Screening via External Databases
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Solution Overview
Problem
Conventional crypto currency transactions lack a mechanism for risk determination, forcing parties to transact blindly with unknown or unverified entities, posing a risk to participants.
Innovation Solution
A risk determination enabled crypto currency transaction system that allows payers to designate risk criteria, enabling computing devices to verify transactions against external databases, ensuring only transactions meeting specified criteria are added to the public ledger.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If distributed crypto currencies are used for transactions, then decentralization and autonomy are improved, but risk determination capability deteriorates
Solution Approach 1:
The patent introduces an intermediary risk determination system that operates within the decentralized crypto currency network. This intermediary component verifies participant risk information and transaction validity without centralizing control, thereby maintaining decentralization while enabling risk determination. The intermediary acts as a mediator between the distributed network nodes, providing risk assessment services that enhance reliability without sacrificing autonomy.
2Reliability
If risk determination mechanisms are added to crypto currency transactions, then transaction security is improved, but system complexity increases
Solution Approach 1:
The patent segments the risk determination functionality into separate, modular components that can be independently implemented and verified. By dividing the complex risk assessment process into discrete steps and independent verification modules, the system achieves enhanced security without proportionally increasing overall complexity. Each segment handles a specific aspect of risk determination, making the system more manageable and maintainable.
Solution Approach 2:
The risk determination system is designed to be self-service, where participants automatically provide and verify their own risk information without requiring complex centralized verification infrastructure. The system uses self-contained verification mechanisms that reduce the need for external complexity while maintaining security. Participants independently validate transaction risks through built-in verification protocols.
Data Source
AI summary
Systems and methods for providing risk determination in a crypto currency transaction include receiving, through a network via a broadcast by a first payer device, a first crypto currency transaction that includes a first payee public address. A first request for a determination of risk associated with the first crypto currency transaction is then identified in the first crypto currency transaction, with the first request including risk criteria. A first payee involved in the first crypto currency transaction is then identified using the first payee public address, and first payee risk information is accessed via at least one external risk information database based on the identification of the first payee. If it is determined that the first payee risk information satisfies the at least one risk criteria in the first request, the first crypto currency transaction is provided for addition to a block in a crypto currency public ledger.