Intermediary System for Private Currency Conversion
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Solution Overview
Problem
Private currencies are limited in value due to the difficulty and cost of negotiating, monitoring, and maintaining agreements for recognition across different vendors, leading to a diminished perceived value as recipients can only use them for specific goods or services, making them ineffective as incentives.
Innovation Solution
A method and apparatus for processing transactions that allow the use of private currency not recognized by a vendor by decrementing the private currency and incrementing a recognized currency, enabling transactions between participants who do not initially recognize each other's currencies through an intermediary system.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Quantity of substance
If a company enters agreements with other companies to recognize private currency, then the value of the private currency increases, but the difficulty and cost of negotiating, monitoring and maintaining these agreements increases
Solution Approach 1:
The patent introduces a third-party intermediary system that facilitates currency exchange between participants who do not directly recognize each other's currencies. The intermediary maintains accounts in both currencies and performs conversions, eliminating the need for direct negotiation and monitoring of mutual recognition agreements between companies.
2Reliability
If a private currency is limited to specific goods or services, then the company maintains control over the currency, but the perceived value is significantly diminished
Solution Approach 1:
The patent enables private currency to function universally by allowing it to be exchanged for various recognized currencies through the intermediary system. This multi-functional capability allows the private currency to be used across different vendors and contexts, significantly increasing its perceived value while the issuing company maintains control over its creation and distribution.
3Productivity
If a company creates private currency to incentivize specific acts, then the company benefits from those acts, but the currency becomes ineffective if recipients cannot use it for desired goods or services
Solution Approach 1:
The intermediary system acts as a bridge that translates private currency into recognized currencies, enabling recipients to use their incentive currency for a wide range of goods and services. This maintains the incentive effectiveness while dramatically improving adaptability and versatility of usage.
Data Source
AI summary
Processing transactions involving participants that do not support the same currency generally involves incrementing and decrementing currencies associated with the participants. This allows the participants to participate in transactions where they would not ordinarily be able to do so. A request is received from a first participant to process a transaction using a first currency that is not recognized by a second participant in the transaction. In response to receiving the request from the first participant, an amount of the first currency associated with the first participant is decremented. Also in response to receiving the request from the first participant, an amount of second currency associated with the first participant is incremented. The second participant recognizes the second currency. The transaction is processed using the amount of second currency associated with the first participant.