Cryptographic Transaction Signing with Trusted Third Party Verification

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Solution Overview

Problem

Current electronic transaction systems lack bi-directional authentication, privacy, and flexibility, as they rely on implicit trust in sellers and require pre-defined payment details, leading to potential fraud and invasion of buyer privacy.

Innovation Solution

A method involving cryptographically signed transaction messages between parties, verified by a trusted third party, ensuring both parties' agreement and preventing alteration, with optional witnessing and flexible execution routes, maintaining anonymity and enabling secure, flexible transaction execution.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If traditional electronic transaction systems are used, then transactions can be processed efficiently, but buyer privacy is compromised and bi-directional authentication is not achieved

Engineering Contradiction:

Improvetransaction securityVSAvoidbuyer privacy

Core Design Contradiction:

ReliabilityVSLoss of information

Solution Approach 1:

The patent uses cryptographic hashing to create a digital fingerprint of the transaction message. Instead of transmitting the actual message content through the network, only the hash value is transmitted and stored on the card. This copying approach allows verification of message integrity without exposing the actual transaction details to intermediaries, thereby protecting buyer privacy while maintaining transaction security.

Inventive Principle:

Principle #26Copying

Solution Approach 2:

The patent introduces a trusted third party (clearing house) as an intermediary that facilitates the transaction without having direct access to the buyer's identification information. The clearing house receives the hashed message from the seller, verifies it against the card's stored hash, and only then authorizes the transaction. This intermediary approach enables secure verification while preventing privacy breaches.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If seller authentication is implemented, then transaction validity is ensured, but buyer authentication of seller is not provided

Engineering Contradiction:

Improveseller authenticationVSAvoidbi-directional authentication

Core Design Contradiction:

ReliabilityVSAdaptability or versatility

Solution Approach 1:

Instead of only the seller providing authentication information to the buyer, the patent inverts the approach by having the buyer's card provide authentication through cryptographic hashing. The card actively verifies the seller's identity by comparing hashes, creating a bidirectional authentication mechanism where both parties must prove their legitimacy for the transaction to proceed.

Inventive Principle:

Principle #13The other way round (Inversion)

3Ease of operation

If pre-defined payment details are required, then transaction processing is simplified, but flexibility in payment arrangement is reduced

Engineering Contradiction:

Improvetransaction processingVSAvoidpayment flexibility

Core Design Contradiction:

Ease of operationVSAdaptability or versatility

Solution Approach 1:

The patent makes the payment arrangement dynamic by allowing the buyer to specify payment details at the time of purchase rather than requiring pre-defined arrangements. The system accepts various payment methods (cash, cheque, bank transfer, credit card) and processes them flexibly based on the transaction requirements, while still maintaining secure authentication through cryptographic hashing.

Inventive Principle:

Principle #15Dynamics

4Device complexity

If implicit trust in seller is relied upon, then system complexity is reduced, but fraud vulnerability increases

Engineering Contradiction:

Improvesystem complexityVSAvoidfraud risk

Core Design Contradiction:

Device complexityVSObject-affected harmful factors

Solution Approach 1:

The patent replaces the mechanical approach of implicit trust with a cryptographic verification system. Instead of relying on trust relationships, the system uses mathematical hashing algorithms to verify the seller's identity and the authenticity of the transaction message. This substitution of trust-based mechanisms with cryptographic verification maintains relative system simplicity while dramatically reducing fraud vulnerability.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS10657523B2Reconciling electronic transactions

Publication Date: 2020.05.19 ARM IP

AI summary

An apparatus, system and method for establishing a transaction between first and second parties including a first signing step in which a transaction message including a request and a transaction identifier is cryptographically signed by the first party to form a first cryptographically signed message. The first signed message is transmitted from the first party to the second party. The second party then cryptographically signs the first message to form a second cryptographically signed message. The second message is also transmitted from one or more of a plurality of parties having the second message to a trusted third party. The trusted third party is able to verify that the second message was cryptographically signed by the second party and can also verify that the first message in the second message was cryptographically signed by the first party.