Overlay Ledger for Math-Based Currency Banking Integration
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Current math-based currency (MBC) systems lack integration with traditional banking services, limiting users' ability to utilize deposit services, interest accrual, credit services, and insurance within a mobile wallet platform, and financial institutions cannot take possession of MBC to offer insured deposits and lending services.
Innovation Solution
A banking system that allows MBC users to perform transactions through a mobile wallet platform, where financial institutions can secure and manage MBC deposits, apply interest, provide credit, and offer insurance by using a pooled MBC account and overlay ledger system, enabling them to take possession of MBC for insured deposits and lending.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If MBC systems operate independently without traditional banking integration, then cryptographic security and anonymity are maintained, but banking services like deposit, interest accrual, credit, and insurance cannot be provided
Solution Approach 1:
The patent introduces a financial institution computing system as an intermediary between MBC users and the blockchain network. This intermediary maintains overlay ledgers that track MBC balances and facilitates banking services without requiring direct integration into the blockchain protocol, thus adding versatility while managing complexity through abstraction
Solution Approach 2:
The system segments functionality into distinct layers: the blockchain layer handles cryptographic security and transaction verification, while the overlay ledger layer handles banking services like deposits, interest accrual, and credit. This segmentation allows each layer to specialize without compromising the other
2Adaptability or versatility
If financial institutions cannot take possession of MBC, then user anonymity and decentralization are preserved, but insured deposits and lending services cannot be offered
Solution Approach 1:
The financial institution maintains a copy of the MBC ledger (overlay ledger) that mirrors the blockchain records. This allows the institution to track and insure deposits without actually holding the cryptographic private keys, thus providing insured deposits while maintaining the anonymity guarantees of the original MBC system
Solution Approach 2:
The system uses an intermediary overlay ledger mechanism that allows financial institutions to verify and insure MBC deposits without taking direct possession of the cryptographic assets. The institution guarantees the deposit value without compromising the underlying cryptographic ownership and anonymity
3Adaptability or versatility
If wallet applications only store private key information without actual MBC possession, then user control and security are maintained, but traditional banking functions like credit and insurance cannot be implemented
Solution Approach 1:
The wallet application is enhanced to serve multiple functions: it continues to store private keys for cryptographic control while also integrating with the financial institution's overlay ledger system to enable banking functions. This multi-functionality allows users to maintain control while accessing credit, insurance, and other banking services through the same interface
Data Source
AI summary
Systems, methods, and computer-readable storage media utilized for processing open loop math based currency (“MBC”) credit card transactions at a financial institution. One method includes receiving, via an open loop processing network, a request for an MBC transaction and generating a first code uniquely identifying the MBC transaction. The method further includes transmitting, via the open loop processing network, the first code to the customer computer device and receiving, from an acquirer/processor computer system via the open loop processing network, a second code including the first code and a public and private key pair. The method further includes determining that the public key is registered and updating a first entry of an overlay ledger and a second entry of the overlay ledger. The method further includes transmitting, via the open loop processing network, a credit guarantee and transmitting, via the open loop processing network, a receipt of the MBC transaction.