Distributed Ledger Virtual Receipt Management
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Solution Overview
Problem
Current systems lack efficient methods for managing asset or obligation-backed virtual receipts on distributed systems, particularly in tracking ownership and facilitating transactions across multiple platforms.
Innovation Solution
The implementation of a method using a depositary entity with a computer processor to manage asset or obligation-backed virtual receipts by receiving confirmation of asset deposits, issuing virtual receipts on a Blockchain-based distributed ledger, and enabling redemption and transfer processes, allowing for secure and transparent ownership tracking and transaction settlement.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional centralized systems are used for managing depositary receipts, then system complexity is reduced, but security, transparency, and efficiency in tracking ownership and facilitating transactions across multiple platforms deteriorate
Solution Approach 1:
The patent introduces a distributed ledger (blockchain) as an intermediary layer between the depositary entity and the underlying assets. This mediator provides immutable recording of ownership and transaction data, enhancing security and transparency without requiring complete restructuring of the existing depositary receipt framework. The distributed ledger acts as a trusted third party that all participants can verify independently.
Solution Approach 2:
The system segments the management of depositary receipts into distinct functional layers: the underlying asset holding layer, the virtual receipt issuance layer, and the transaction settlement layer. Each layer operates semi-independently on the distributed ledger, allowing improvements in security and transparency without necessarily increasing overall system complexity. The segmentation enables targeted implementation of blockchain technology in specific workflow areas.
2Productivity
If manual processes are used for issuing and managing virtual receipts, then system simplicity is maintained, but productivity and efficiency in transaction clearing and settlement deteriorate
Solution Approach 1:
The distributed ledger system enables self-service functionality where participants can independently verify ownership, track transactions, and settle trades without requiring manual intervention from central administrators. The automated consensus mechanism and smart contracts perform validation and recording functions automatically, significantly improving transaction clearing efficiency while the modular architecture prevents exponential growth in system complexity.
Solution Approach 2:
The system performs preliminary actions by pre-establishing the distributed ledger framework and encoding transaction rules in advance. Ownership records and transaction protocols are set up beforehand, allowing rapid processing of subsequent transactions without requiring complex real-time coordination. This preliminary setup reduces the computational and organizational complexity needed during actual transaction processing.
3Measurement precision
If centralized ledgers are used for tracking ownership, then system simplicity is maintained, but measurement precision and transparency in ownership tracking deteriorate
Solution Approach 1:
The distributed ledger serves as an intermediary recording system that provides immutable and transparent ownership tracking. Multiple independent nodes maintain identical copies of the ownership ledger, eliminating single points of failure and manipulation. This intermediary layer enhances measurement precision of ownership without requiring complete overhaul of the existing depositary receipt infrastructure.
Solution Approach 2:
The system applies different quality standards to different aspects of ledger functionality: cryptographic security and immutability are applied to ownership recording, while flexible smart contract logic handles transaction rules. This local differentiation of quality attributes allows high precision in ownership tracking without uniformly increasing complexity across all system functions.
Data Source
AI summary
Systems and methods for management of asset or obligation-backed virtual receipts on a distributed system are disclosed Systems and methods for management of asset or obligation-backed virtual receipts on a distributed system are disclosed. According to one embodiment, in an information processing apparatus for a depositary entity comprising at least one computer processor, a method for managing asset or obligation-backed virtual receipts on a distributed system may include (1) receiving confirmation of a deposit of an underlying asset, wherein the deposit encumbers the underlying asset; (2) receiving authorization to issue a virtual receipt for the deposited underlying asset; and (3) executing issuance of the virtual receipt by writing the transaction to a distributed ledger.