Digital Coin Issuance via Ledger Interoperability for Real-Time Transfers
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Solution Overview
Problem
Existing cryptocurrency transaction systems lack efficient and secure methods for managing and transferring digital assets on distributed ledgers without relying on trusted third parties, particularly in real-time and cross-border transactions.
Innovation Solution
A system utilizing a blockchain-based distributed ledger with digital coins representing currency balances, managed by financial institutions, allowing secure transfer and redemption through a combination of smart contracts, gateway communication services, and PKI cryptography to ensure secure and real-time transactions across different banking systems.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If distributed ledger technology is used to eliminate trusted third parties, then system reliability and security are improved, but transaction speed and real-time processing capability deteriorate
Solution Approach 1:
The system segments the distributed ledger network into multiple nodes that can process transactions in parallel. Each node independently validates and processes transactions, allowing simultaneous processing of multiple transactions across the network, thereby increasing overall throughput while maintaining security through distributed validation.
Solution Approach 2:
The system performs preliminary validation and authentication of transactions before they are added to the blockchain. Smart contracts and digital signature verification are executed in advance to confirm transaction validity, reducing the time required for post-transaction verification and enabling faster finalization of legitimate transactions.
2Reliability
If cryptographic verification is performed for each transaction, then transaction authenticity and non-repudiation are improved, but computational complexity and processing time worsen
Solution Approach 1:
Digital signatures and cryptographic verification are performed as preliminary steps during transaction creation and submission. The sender's private key signs the transaction data before it enters the network, and nodes verify these signatures upfront, ensuring authenticity without requiring complex real-time cryptographic operations during transaction processing.
Solution Approach 2:
The system uses public key cryptography where the public key serves as a verifiable copy of the sender's identity. This public key can be freely distributed and used for verification without compromising security, simplifying the authentication process compared to managing and verifying private keys directly.
3Productivity
If centralized platforms store digital wallets for validation, then transaction validation efficiency is improved, but security risks and single points of failure worsen
Solution Approach 1:
The system segments wallet storage and validation functions across multiple distributed nodes rather than centralizing them. Each node maintains copies of the distributed ledger and can independently validate transactions, eliminating single points of failure while maintaining validation efficiency through parallel processing capabilities.
Solution Approach 2:
The distributed ledger itself serves as an intermediary that enables validation without requiring centralized wallet storage. Nodes validate transactions by checking the distributed ledger state and cryptographic proofs rather than accessing centralized wallet databases, maintaining security while achieving validation efficiency.
Data Source
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AI summary
A method for digital coin issuance may include: receiving, at a ledger interoperability service and from a gateway communication service, a request to deposit a digital coin balance for an amount of funds for a client to a client digital coin wallet on a distributed ledger; receiving, at an omnibus account, a transfer of the funds from a client demand deposit account for the client; identifying, by the ledger interoperability service, an address for the client digital coin wallet on the distributed ledger using an address book; submitting, by the ledger interoperability service, a request to the gateway communication service to issue the digital coin balance to the client digital coin wallet and to generate postings for the digital coin balance for the distributed ledger; and receiving, by the ledger interoperability service, confirmation from gateway communication service of writing the digital coin balance to the client digital coin wallet.