Private Network Digital Currency Issuance for Secure Off-Ledger Exchange
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Solution Overview
Problem
Current digital currency systems face challenges in regulation, security, and interoperability due to anonymous exchanges and decentralized control, leading to issues such as unregulated transactions, cyber-attacks, and processing inefficiencies.
Innovation Solution
A private network issuance system is implemented, allowing off-ledger digital currency transactions with centralized control, using a processing circuit to generate and transmit digital currency tokens with metadata fields, and establish secure connections between user devices and central providers, enabling real-time micro-payments and enhanced security.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If decentralized control is used for digital currency exchanges, then user autonomy and privacy are improved, but security and regulatory compliance deteriorate due to anonymous transactions and cyber-attacks
Solution Approach 1:
The patent introduces a private network as an intermediary layer between users and the public blockchain. This private network enables centralized control and security measures while still allowing digital currency exchanges, thus resolving the contradiction between user autonomy and security by mediating through a controlled environment.
Solution Approach 2:
The system segments digital currency transactions into two parts: off-ledger issuance/exchange occurring in the private network environment, and on-ledger recording on the blockchain. This segmentation allows decentralized recording while enabling centralized control over the actual currency issuance and exchange processes, improving security without completely eliminating user autonomy.
2Productivity
If off-ledger exchange is implemented for digital currency issuance, then processing efficiency is improved, but regulatory compliance and transaction traceability deteriorate
Solution Approach 1:
The system implements feedback by recording off-ledger exchange transactions on the blockchain ledger. While the actual currency exchange occurs efficiently off-ledger, the transaction information is fed back to the ledger for recording and traceability, thus resolving the contradiction between processing efficiency and transaction traceability.
Solution Approach 2:
The private network acts as an intermediary that facilitates efficient off-ledger exchanges while maintaining connection to the blockchain ledger. This intermediary structure enables fast processing through private network communication while ensuring regulatory compliance through ledger recording of transaction metadata.
3Reliability
If centralized control is implemented through private network, then security and regulatory compliance are improved, but system complexity and infrastructure requirements worsen
Solution Approach 1:
The patent makes the blockchain ledger serve multiple functions: it acts as both a public decentralized ledger for recording and as a foundation for private network operations. This multi-functionality reduces system complexity by utilizing existing blockchain infrastructure for both decentralized and centralized operations rather than requiring separate systems.
Data Source
AI summary
Systems, methods, and computer-readable storage media of private network issuance of digital currency. One method includes receiving an issuance request associated with a first denomination of digital currency. The method further includes issuing a first digital currency token, wherein issuing is an off-chain exchange transferring the first denomination outside a digital currency ledger.