Cryptographically Verified Off-Chain Data for Smart Contracts

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Solution Overview

Problem

Blockchain-based smart contracts need a mechanism to verify the authenticity of inputs and data accessed from third-party systems to take action on real-world inputs or perform resource actions, ensuring the integrity of the distributed ledger system.

Innovation Solution

A system and method that uses an off-chain host system to verify the authenticity of smart contract inputs and data, employing cryptographic verification and a deterministic chain of transactions recorded on a blockchain, allowing smart contracts to interact with off-chain resources and execute real-world side-effects while maintaining ledger integrity.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If smart contracts access data from third-party systems, then the functionality and versatility of smart contracts is improved, but the security and reliability of the distributed ledger is compromised

Engineering Contradiction:

Improvefunctionality of smart contractsVSAvoidintegrity of distributed ledger

Core Design Contradiction:

Adaptability or versatilityVSReliability

Solution Approach 1:

The patent introduces an intermediary verification mechanism between smart contracts and third-party systems. This intermediary layer validates data from off-chain sources before it is used in smart contract execution, ensuring that the integrity of the distributed ledger is maintained while still enabling access to external data sources.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If cryptographic verification is implemented for off-chain data, then the reliability and security are improved, but the device complexity and implementation difficulty increase

Engineering Contradiction:

Improvesecurity of smart contract inputsVSAvoidcomplexity of verification system

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent extracts the cryptographic verification functionality into a separate, dedicated module within the smart contract system. By isolating the verification mechanism, the system achieves enhanced security through cryptography while managing complexity through modular architecture, where the verification logic is contained and can be independently managed.

Inventive Principle:

Principle #2Taking out (Extraction)

3Adaptability or versatility

If data from third-party systems is accessed by smart contracts, then the adaptability is improved, but the loss of information and data authenticity increases

Engineering Contradiction:

Improveaccess to real-world dataVSAvoidauthenticity of data

Core Design Contradiction:

Adaptability or versatilityVSLoss of information

Solution Approach 1:

The patent implements a feedback mechanism where the smart contract system verifies data authenticity from third-party sources and provides feedback about the verification status. This ensures that only authenticated data is used in contract execution, preventing information loss and maintaining data integrity while still enabling access to external data.

Inventive Principle:

Principle #23Feedback

Data Source

PatentUS10108954B2System and method for cryptographically verified data driven contracts

Publication Date: 2018.10.23 CHANGE HEALTHCARE HOLDINGS LLC

AI summary

A system and method are disclosed that methodologies concerning cryptographically verified blockchain-based contract data inputs and off-chain side-effects. The system and method provide a deterministic and cryptographically verifiable chain of transactions, recorded on a blockchain (distributed ledger) system. This system provides an irrefutable public accounting of the transactions involved in incorporating on-chain contract execution with off-chain data and side-effects (resource actions).