Dynamic Authentication Protocol for Blockchain Transaction Reconciliation

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Solution Overview

Problem

The telecommunications industry faces challenges with transaction reconciliations, financial settlements, service hijacks, identity fraud, and shrinking profitability margins due to the exponential growth of intermediaries and transmission hops in the supply chain, leading to excessive service hijacks and identity fraud.

Innovation Solution

A hybrid blockchain technology system is implemented to provide real-time validation and authentication of service providers and requestors, utilizing smart contracts and decentralized validation to ensure secure, transparent, and irreversible transactions across the supply chain.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If traditional telecommunications supply chain structure with multiple intermediaries is used, then service coverage and connectivity are improved, but transaction reconciliation efficiency deteriorates and financial settlement time increases

Engineering Contradiction:

Improveservice coverageVSAvoidtransaction reconciliation efficiency

Core Design Contradiction:

Adaptability or versatilityVSProductivity

Solution Approach 1:

The patent introduces a blockchain-based intermediary layer that mediates transactions between all supply chain participants. This decentralized mediator enables direct peer-to-peer validation and settlement, eliminating the need for sequential processing through multiple traditional intermediaries, thus improving reconciliation efficiency while maintaining service coverage.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent segments the centralized transaction reconciliation process into distributed micro-transactions validated by individual blockchain nodes. Each participant independently validates and records transactions, breaking the monolithic reconciliation process into parallel, independent units that can be processed simultaneously, dramatically improving efficiency.

Inventive Principle:

Principle #1Segmentation

2Adaptability or versatility

If multiple intermediaries and transmission hops are added to the supply chain, then service accessibility is improved, but security against service hijacks and identity fraud deteriorates

Engineering Contradiction:

Improveservice accessibilityVSAvoidsecurity

Core Design Contradiction:

Adaptability or versatilityVSReliability

Solution Approach 1:

The blockchain acts as a trusted intermediary that verifies identities and validates transactions across all transmission hops. Instead of trusting each intermediary, the system uses cryptographic proof and consensus mechanisms to ensure security at every step, maintaining reliability even as accessibility expands.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent applies uniform cryptographic authentication and validation rules across all participants in the supply chain. Every node uses the same security protocols and validation criteria, ensuring consistent security levels regardless of the number or type of intermediaries involved, thus maintaining reliability while improving accessibility.

Inventive Principle:

Principle #33Homogeneity

3Device complexity

If manual transaction reconciliation processes are used across multiple intermediaries, then system complexity is reduced, but financial settlement time and errors increase

Engineering Contradiction:

Improvesystem complexityVSAvoidfinancial settlement time

Core Design Contradiction:

Device complexityVSLoss of time

Solution Approach 1:

The blockchain system enables participants to automatically validate, record, and settle transactions themselves through smart contracts and consensus mechanisms. Each node independently performs reconciliation functions without requiring manual intervention from central authorities or other intermediaries, dramatically reducing settlement time while the standardized protocol keeps complexity manageable.

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

The patent implements preliminary validation and authentication of participants and transactions before they enter the main settlement process. Identity verification, credential validation, and transaction authorization are performed in advance through cryptographic proofs, preventing errors and disputes that would require time-consuming manual resolution later.

Inventive Principle:

Principle #10Preliminary action

4Ease of operation

If traditional authentication methods are used in telecommunications supply chain, then ease of operation is maintained, but vulnerability to identity fraud and service hijacks increases

Engineering Contradiction:

Improveease of operationVSAvoididentity fraud vulnerability

Core Design Contradiction:

Ease of operationVSObject-affected harmful factors

Solution Approach 1:

The patent replaces traditional mechanical authentication systems (physical credentials, manual verification) with cryptographic-based digital authentication. Participants use digital identities, cryptographic keys, and blockchain-verified credentials instead of physical tokens or manual processes, maintaining ease of digital operation while providing superior security against identity fraud and service hijacks.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentEP4632652A1Dynamic authentication system and protocol

Publication Date: 2025.10.15 CRONOS GROUP

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AI summary

Systems and methods are provided for performing dynamic authentication of network transactions.