Distributed Ledger Digital Property Instant Settlement
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Solution Overview
Problem
Clearance and settlement of financial transactions, particularly international transactions, are time-consuming and expensive, and digital currencies face risks such as fluctuating exchange rates and loss of private keys.
Innovation Solution
A distributed transaction consensus network (TBCA Network) using cryptographic techniques to manage digital properties, allowing instantaneous clearing and settlement of transactions between virtual wallets by recording transactions in a distributed ledger, ensuring each wallet can only store properties issued by its associated issuer.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional central clearing house is used for financial transactions, then transaction security and control are improved, but clearance time and cost increase
Solution Approach 1:
The patent extracts the clearing and settlement function from the traditional central clearing house and relocates it to the distributed ledger itself. The ledger inherently provides security through cryptographic verification while enabling instantaneous clearance, eliminating the time-consuming intermediary processes of traditional systems.
Solution Approach 2:
The patent introduces a trusted third party (the licensed issuer) who mints and validates digital properties on the distributed ledger. This intermediary provides security and control similar to traditional clearing houses but operates within the decentralized ledger framework to enable instantaneous clearance and settlement.
2Speed
If digital currency exchange is used for international transactions, then clearance speed is improved, but exchange rate fluctuation risk increases
Solution Approach 1:
The patent changes the fundamental parameter of value representation by using licensed digital properties backed by real-world assets rather than volatile cryptocurrency. This maintains the speed of digital transfer while stabilizing the value through the licensed issuer's obligation to back the digital properties with actual assets, eliminating exchange rate fluctuation risk.
3Ease of operation
If virtual wallet with private key is used for digital currency storage, then transaction control is improved, but security risk from key loss or theft increases
Solution Approach 1:
The patent introduces a licensed issuer as an intermediary between the user and the digital assets. The issuer holds the ultimate security responsibility and can recover or protect assets if private keys are lost or stolen, while users retain operational control through their virtual wallets. This dual-layer approach maintains ease of operation while significantly improving reliability.
Solution Approach 2:
The system provides beforehand cushioning by having the licensed issuer maintain backup mechanisms and insurance reserves. If a user's private key is lost or compromised, the issuer can intervene to protect the assets, providing a safety net that eliminates the catastrophic risk of permanent loss while maintaining normal wallet operations.
Data Source
Figure 5
Figure 6A~6B
Figure 6C
AI summary
Method and system to manage digital properties, in particular to instantly clear and settle transactions of digital properties between two virtual wallets, based on cryptographic technology in a distributed transaction consensus network, eliminating the risks, complication, and time consumption associated with traditional settlement proceedings. Each virtual wallet can only store digital properties issued by the digital property issuer with which the virtual wallet is associated. When a transaction is completed, no extra action is needed for clearing and settlement between a virtual wallet owner (a sender or a recipient) and its associated digital property issuer.