Private Distributed Ledger Data Privacy via Segmented Encryption

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Solution Overview

Problem

Existing distributed ledger systems lack data privacy, as transactions are exposed in the clear, making it difficult to protect sensitive information such as account numbers, financial instruments, and personally identifiable information, especially in systems with and without smart contract support.

Innovation Solution

A private distributed ledger system that uses data encryption and a 'private' transaction type, where nodes validate public transactions and execute contract code for private transactions they are party to, while skipping processing for non-party transactions, utilizing a combination of smart contract software architecture and modifications to the block proposal and validation processes to maintain segmented public and private state databases.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If transactions are recorded in the distributed ledger, then transparency and immutability are improved, but data privacy deteriorates as sensitive information is exposed to all nodes

Engineering Contradiction:

ImproveimmutabilityVSAvoiddata privacy

Core Design Contradiction:

ReliabilityVSLoss of information

Solution Approach 1:

The patent segments transactions into public and private categories. Public transactions are recorded on the distributed ledger with full visibility, while private transactions are encrypted and selectively visible only to participating nodes. This segmentation allows the system to maintain immutability for public records while protecting sensitive information for private transactions.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The patent introduces an intermediary encryption layer between the transaction recording mechanism and the data storage. Transactions are encrypted before being stored in the distributed ledger, and only authorized nodes can decrypt and access the sensitive information. This intermediary encryption mechanism preserves the immutability of the ledger while ensuring data privacy for sensitive transactions.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Stability of the object's composition

If all nodes process all transactions, then system consistency is improved, but processing time and computational resources increase

Engineering Contradiction:

Improvesystem consistencyVSAvoidsettlement time

Core Design Contradiction:

Stability of the object's compositionVSLoss of time

Solution Approach 1:

The patent applies local quality by enabling nodes to process only the transactions relevant to them. Each node maintains the ability to process all public transactions for system consistency, but can skip private transactions that do not involve them. This selective processing approach maintains system consistency for public records while reducing unnecessary computational overhead and settlement time for private transactions.

Inventive Principle:

Principle #3Local quality

Solution Approach 2:

The patent implements partial action by having nodes process only the subset of transactions they need to participate in. For private transactions, nodes can skip processing if they are not parties to the transaction, while still maintaining system consistency through public transaction processing and cryptographic verification of private transaction inclusions in blocks.

Inventive Principle:

Principle #16Partial or excessive action

3Loss of information

If encryption is applied to all transactions, then data privacy is improved, but system complexity increases

Engineering Contradiction:

Improvedata privacyVSAvoidsystem complexity

Core Design Contradiction:

Loss of informationVSDevice complexity

Solution Approach 1:

The patent segments the encryption application to only private transactions rather than all transactions. Public transactions remain unencrypted and simple to process, while only private transactions receive encryption treatment. This segmentation approach maintains data privacy for sensitive information while avoiding the unnecessary complexity of encrypting all transactions.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The patent applies local quality by implementing encryption only where necessary - specifically for private transactions involving sensitive information. The system maintains simple, unencrypted processing for public transactions and applies encryption only to the local subset of private transactions, thereby maintaining data privacy without unnecessarily increasing overall system complexity.

Inventive Principle:

Principle #3Local quality

Data Source

PatentUS11601408B2Systems and methods for providing data privacy in a private distributed ledger

Publication Date: 2023.03.07 JPMORGAN CHASE BANK NA

AI summary

Systems and methods for providing data privacy in a private distributed ledger are disclosed. According to another embodiment a distributed ledger network may include a first node comprising a first node computer processor and hosting a central ledger comprising a plurality of entries for public transactions and private transactions, wherein the entries for public transactions comprise transaction payloads for the respective public transaction, and the entries for private transactions comprise a cryptographic hash digest of a transaction payload for the respective private transaction; and a plurality of second nodes each comprising a second node computer processor and hosting a public database comprising the public transactions, and a private database comprising transaction payloads for the private transactions to which the node is a party.