Internal Ledger Architecture for Lower-Cost Blockchain Transactions
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Solution Overview
Problem
Blockchain transactions are computationally expensive and time-consuming for both computing nodes and requesting devices, leading to substantial resource and financial costs.
Innovation Solution
Implementing a transaction service that facilitates internal transactions using an internal ledger, reducing the number of transactions recorded on the blockchain by utilizing holding accounts and individual cryptographic keys, while ensuring secure transactions with external users.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If all transactions are recorded on the blockchain, then transaction security and auditability are ensured, but computational cost and processing time increase substantially
Solution Approach 1:
The system segments transactions into two categories: internal transactions (between accounts within the same exchange) and external transactions (with accounts outside the exchange). Internal transactions are recorded only in the internal ledger, while external transactions are recorded on the blockchain. This segmentation reduces the number of blockchain transactions while maintaining security through cryptographic verification of internal transfers.
Solution Approach 2:
The patent introduces an internal ledger as an intermediary layer between internal transactions and the blockchain. This internal ledger acts as a mediator that tracks internal transfers without requiring blockchain recording, thereby reducing computational overhead while maintaining transaction integrity through periodic reconciliation with the blockchain.
2Loss of information
If all transactions are recorded on the blockchain, then complete audit trail is maintained, but transaction processing time increases
Solution Approach 1:
The system segments the audit trail into two parts: internal transaction history stored in the internal ledger and external transaction history stored on the blockchain. This segmentation allows rapid retrieval of internal transaction records without blockchain processing delays, while maintaining complete auditability for external transactions that require blockchain verification.
Solution Approach 2:
The system performs preliminary recording of internal transactions in the internal ledger before any potential blockchain interaction. This preliminary action enables immediate transaction confirmation and audit trail creation for internal transfers, avoiding the time-consuming blockchain consensus process for transactions that don't require external verification.
3Reliability
If individual cryptographic keys are used for each user account, then transaction security is enhanced, but system complexity increases
Solution Approach 1:
The patent extracts the cryptographic key management function from the blockchain system and implements it within the exchange's internal infrastructure. By taking out key management from the decentralized blockchain environment and consolidating it in the centralized exchange system, individual account security is maintained while reducing the overall system complexity of key distribution and verification across the network.
Data Source
AI summary
Systems, methods, and computer-readable media disclosed herein relate to reducing computation and computing resources for certain blockchain related transactions. Specifically, software algorithms and architecture allow some transactions to avoid the need for recordation on a blockchain, which can be computationally expensive both for a requesting device and for various nodes on the blockchain. Thus, a computer system may receive indications of incoming transactions transferring digital assets to particular user accounts, and in response to requests from user accounts, the computer system facilitates one or more internal transactions between those accounts. In response to a request from a particular internal user account, the computer system may perform an outgoing transaction transferring one or more digital assets to an external user account from one or more internal user accounts. The incoming transactions and outgoing transaction are recorded on the blockchain, but the internal transactions are recorded on an internal ledger rather than the blockchain, saving computational power and improving computer operations.