Selective Cryptocurrency Anonymity via Server Intermediary
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Solution Overview
Problem
Current cryptocurrency payment methods lack anonymity, as blockchain transactions publicly reveal transfer amounts and addresses, compromising user privacy and making it difficult to maintain anonymity while adhering to anti-money laundering regulations.
Innovation Solution
An electronic payment method utilizing a server to facilitate selectively anonymizing cryptocurrency transfers by employing intermediate addresses and asymmetric key pairs, ensuring that transactions meet anonymity criteria before being recorded on the blockchain, and allowing for temporary removal of anonymity for compliance purposes.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If cryptocurrency transactions are recorded on the blockchain, then payment processing efficiency and transparency are improved, but user anonymity is compromised as all transaction details become publicly visible
Solution Approach 1:
The patent introduces a mixing service as an intermediary between the sender and receiver. This service receives cryptocurrency from the sender, mixes it with other transactions, and distributes it to multiple addresses before delivering to the intended recipient. The mixing service acts as a mediator that breaks the direct link between sender and receiver addresses, making transaction tracing difficult while maintaining efficient processing.
Solution Approach 2:
The patent segments the transaction process into multiple steps: initial transfer to mixing service, mixing operation, and distribution to recipient. By dividing the transaction into separate phases with intermediate steps, the system maintains efficiency while obscuring the direct connection between sender and receiver, thus preserving anonymity.
2Loss of information
If anonymity criteria are enforced for all transactions, then user privacy is protected, but compliance with anti-money laundering regulations becomes difficult
Solution Approach 1:
The patent implements dynamic anonymity control where the level of anonymity applied to a transaction can be adjusted based on the transaction type and regulatory requirements. The system can selectively apply anonymity to certain transactions while maintaining transparency for others that require compliance monitoring, allowing flexible adaptation to different regulatory environments.
Solution Approach 2:
The patent applies different anonymity characteristics to different transactions based on their specific requirements. Not all transactions receive the same level of anonymity protection; instead, the system tailors the anonymity application locally to each transaction based on compliance needs, allowing AML regulations to be met while maintaining privacy where appropriate.
3Loss of information
If intermediate addresses are used to enhance anonymity, then transaction privacy is improved, but system complexity increases due to additional server requirements
Solution Approach 1:
The mixing service serves as a centralized intermediary that handles the complexity of anonymity preservation. By consolidating the mixing operation in a dedicated service, the patent simplifies the overall system architecture compared to implementing anonymity through distributed peer-to-peer mixing. The intermediary handles all the complex mixing logic and coordinate communication between senders and receivers.
Data Source
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AI summary
The present invention relates to an electronic payment method for a selectively anonymized transfer of a cryptocurrency amount from a source address to a destination address using a blockchain (178). A server (100) checks whether the transaction request meets an anonymity criterion. If the transaction request violates the anonymity criterion, the server (100) checks whether a registration (116) for a wallet program (144) with the source address exists on the first server (100). If a registration (116) exists, the transfer is assigned to an identity covered by the registration (116) which is stored on the server (100).Provided that an intermediate address of the server is permitted to execute transactions that violate the anonymity criterion, an entry of a signed transaction instruction of the amount to be transferred to the intermediate address into the blockchain (178) is initiated, as well as a transaction of the corresponding amount from the intermediate address to the destination address.