Universal Payment Channel for Off-Chain Cross-Cryptocurrency Transfers
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Solution Overview
Problem
Existing blockchain technologies face challenges in enabling seamless transactions between users using different cryptocurrencies and require cumbersome online transfers, especially for micro-transactions, due to the need for connections to the blockchain network for each transfer.
Innovation Solution
A hub computer facilitates transactions by communicating with multiple blockchain networks and service provider computers, allowing for the transfer of digital currencies through interaction channels without direct blockchain broadcasting, using smart contracts to manage and secure these transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Speed
If users transfer cryptocurrencies directly through blockchain network, then transaction security and transparency are ensured, but transaction speed and convenience deteriorate due to required online connectivity and network confirmation
Solution Approach 1:
The patent introduces an off-chain intermediary system that mediates cryptocurrency transfers between users. Instead of requiring direct blockchain network interaction for each transfer, users can conduct transactions through an intermediary layer that settles on-chain periodically. This intermediary mechanism enables faster, more convenient transfers while maintaining security through eventual blockchain settlement.
2Productivity
If all transactions are broadcast to the blockchain network, then transaction immutability and transparency are maintained, but network congestion and transaction costs increase
Solution Approach 1:
The patent segments transactions into off-chain and on-chain components. Individual user transactions are processed off-chain in batches, reducing the load on the blockchain network. Only aggregated settlement transactions are broadcast to the blockchain, significantly improving transaction throughput while reducing network congestion and energy consumption.
3Reliability
If users maintain direct connection to blockchain network for each transfer, then transaction security is ensured, but device complexity and energy consumption increase
Solution Approach 1:
The intermediary system handles the computationally intensive blockchain interactions, allowing user devices to operate with simpler, lower-energy protocols. Users interact with the intermediary through lightweight interfaces while the intermediary manages secure blockchain communications, reducing energy consumption on user devices while maintaining security through the intermediary's secure implementation.
Data Source
AI summary
A method for facilitating cryptocurrency transactions is disclosed. The method includes receiving, by a hub computer, a first user account identifier from a first service provider computer in communication with a first user device and a first blockchain network. The first service provider computer transfers an amount of digital currency to a first smart contract on the first blockchain network. The hub computer also receives a second user account identifier from a second service provider computer in communication with a second user device and a second blockchain network containing a second smart contract. The hub computer receives a first amount of a first digital currency from the first service provider computer, and then transfers a second amount of a second digital currency to the second service provider computer.