Smart Contract Bargaining via Homomorphic Encryption
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Solution Overview
Problem
Existing bargaining methods in supply chains lack adequate protection for the data privacy of both parties, leading to potential leaks of price information during negotiations.
Innovation Solution
An automatic bargaining method based on smart contract and secure multi-party computation using homomorphic encryption, where public and private keys are generated to encrypt and decrypt purchase and sale prices, ensuring secure transmission and determination of pricing within preset transaction conditions, thereby maintaining data privacy.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If price information is transmitted during negotiation, then bargaining can be conducted, but data privacy is compromised
Solution Approach 1:
A blockchain-based intermediary system is introduced to mediate the price negotiation between demander and supplier. The intermediary enables both parties to submit and compare price information without directly exposing their raw data to each other. The blockchain network acts as a trusted mediator that verifies and validates price submissions while maintaining confidentiality, thus facilitating bargaining convenience without compromising data privacy.
Solution Approach 2:
Instead of transmitting actual price information, the system uses cryptographic copies or representations of price data. Price information is encrypted and transformed into a form that can be verified for validity (e.g., proving a price is within acceptable ranges) without revealing the actual numerical values. This copying approach allows bargaining to proceed on the basis of verified information while preventing direct exposure of sensitive price data.
2Productivity
If traditional online bargaining platforms are used, then negotiation efficiency is improved, but data security is weakened
Solution Approach 1:
The patent replaces traditional centralized online bargaining platforms with a decentralized blockchain-based system. Instead of relying on centralized servers and databases that are vulnerable to attacks and breaches, the system uses distributed ledger technology with cryptographic security. Smart contracts automatically execute negotiation rules and validate price submissions without human intervention, maintaining high efficiency while providing enhanced security through the immutable and transparent nature of blockchain.
Solution Approach 2:
The blockchain network serves as a new type of intermediary that fundamentally changes the trust model. Rather than requiring participants to trust the platform operator or each other, the blockchain provides cryptographic proof and consensus mechanisms that ensure data integrity and security. This intermediary layer enables efficient automated negotiation while protecting data security through distributed validation and cryptographic encryption.
3Loss of time
If parties disclose price information directly, then negotiation speed increases, but competitive advantage is lost
Solution Approach 1:
The system creates cryptographic copies of price information that can be validated without revealing the actual values. Parties can submit encrypted price data that proves certain properties (e.g., being within acceptable ranges, meeting minimum/maximum constraints) without exposing the precise numbers. This allows rapid validation and comparison while maintaining the competitive advantage of keeping exact price strategies confidential.
Solution Approach 2:
The blockchain system applies different levels of information disclosure to different aspects of the negotiation. While the actual price values remain confidential, the system validates and compares local properties of the prices (such as whether they meet contractual constraints, are within acceptable ranges, or satisfy negotiation rules). This local quality approach enables negotiation progress without requiring full transparency of sensitive information.
Data Source
AI summary
Disclosed is a smart contract and an automatic bargaining method for secure multi-party computation and a device embodies same. A first public key and a first private key are generated based on a homomorphic encryption algorithm in the smart contract, the first public key is sent to a demander and a supplier so that the demander and the supplier encrypt the purchase price and the sale price through the first public key, respectively; after receiving a second public key and an encrypted purchase price sent by the demander and a third public key and an encrypted sale price sent by the supplier, the encrypted sale price and the encrypted purchase price that meet the preset transaction conditions are decrypted.