Offline Distributed-Ledger Approval for Fast Data Exchanges

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Solution Overview

Problem

Existing EMV-based transaction authorization and settlement processes are computationally inefficient, leading to significant delays and increased costs for low-value transactions, especially when applied to high transaction volumes, and are prone to fraudulent activities.

Innovation Solution

Implementing a cryptographically secure, offline data exchange mechanism using a distributed ledger to authorize and settle transactions in real-time, leveraging a block-chain ledger to ensure immutability and reliability, reducing the need for costly and time-consuming online authentication protocols.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If EMV-based online authentication protocols are used for transaction authorization, then transaction security is improved, but transaction processing time increases and processing speed decreases

Engineering Contradiction:

Improvetransaction securityVSAvoidtransaction processing time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The system performs preliminary actions by pre-generating cryptographic proofs and transaction authorizations offline before actual transaction occurs. The client device creates a distributed ledger with cryptographic proofs in advance, allowing the terminal device to verify transactions locally without real-time online authentication, thus eliminating processing delays while maintaining security.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The patent introduces a distributed ledger with cryptographic proofs as an intermediary between the client device and terminal device. This intermediary contains pre-verified transaction authorization data that enables offline verification, replacing the need for direct online communication with authentication servers and eliminating the time-consuming online authentication step.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If EMV-based online authentication protocols are used for transaction authorization, then transaction security is improved, but processing cost increases

Engineering Contradiction:

Improvetransaction securityVSAvoidprocessing cost

Core Design Contradiction:

ReliabilityVSLoss of energy

Solution Approach 1:

The terminal device performs self-service by verifying transactions locally using the distributed ledger and cryptographic proofs stored offline. This eliminates the need for costly real-time communication with external authentication servers, reducing processing costs while maintaining security through cryptographic verification of pre-authorized transactions.

Inventive Principle:

Principle #25Self-service

3Productivity

If distributed ledger with cryptographic proofs is used for offline transaction authorization, then transaction processing speed is improved, but system complexity increases

Engineering Contradiction:

Improvetransaction processing speedVSAvoidsystem complexity

Core Design Contradiction:

ProductivityVSDevice complexity

Solution Approach 1:

The system creates a copy of the authentication mechanism in the form of a distributed ledger containing cryptographic proofs. This copy enables offline verification by replicating the security validation logic locally at the terminal device, allowing fast processing without requiring connection to central authentication systems.

Inventive Principle:

Principle #26Copying

4Object-affected harmful factors

If distributed ledger with cryptographic proofs is used for offline transaction authorization, then fraud resistance is improved, but computational requirements increase

Engineering Contradiction:

Improvefraud resistanceVSAvoidcomputational requirements

Core Design Contradiction:

Object-affected harmful factorsVSUse of energy by moving object

Solution Approach 1:

The patent replaces complex mechanical/computational security verification systems with cryptographic proofs based on mathematical principles. Cryptographic verification requires minimal computational resources compared to traditional authentication protocols, enabling fraud-resistant offline verification with low energy consumption.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS12373805B2Secure offline approval of initiated data exchanges

Publication Date: 2025.07.29 THE TORONTO DOMINION BANK

AI summary

The disclosed embodiments include processes that securely approve and execute exchanges of data between systems, apparatuses, and devices in a computing environment. For example, a terminal device may establish communications with a client device across a direct channel of communication, and may initiate an exchange of data with that additional device across the direct communications channel. The initiated data exchange may be characterized by a value of a data-exchange parameter, and the terminal device may determine to authorize the current data exchange in real-time based on cryptographically secure distributed ledger data maintained by the client device and provided to the terminal device across the direct communications channel. Further, and based on transmitted confirmation data, the client device may generate additional, cryptographically secure of the distributed ledger data to reflect the authorized data exchange.