Smart Contract Distributed Ledger Approval Settlement

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Solution Overview

Problem

Complex approval processes involving multiple parties and systems often result in processing delays due to the sheer number of entities involved, varying processing times, and authentication requirements, which hinder efficient payment processing.

Innovation Solution

The implementation of distributed ledgers and smart contracts to manage complex process flows, where a first service provider initiates a process, records messages on a ledger, monitors approvals, generates settlement events, and communicates these to another ledger, creating a virtual payment instrument for settlement, thereby streamlining the approval and payment process.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If complex approval processes are processed through multiple disparate entities and systems, then comprehensive approval and authentication are achieved, but processing time and delays increase

Engineering Contradiction:

Improveapproval authenticationVSAvoidprocessing time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The patent combines multiple disparate ledgers into a unified distributed ledger system where process ledgers and settlement ledgers operate together. This merging eliminates the need for separate authentication systems while maintaining comprehensive approval tracking, thus reducing processing time without sacrificing reliability.

Inventive Principle:

Principle #5Merging (Combining)

Solution Approach 2:

Smart contracts serve as intermediaries between different service providers and ledgers. These self-executing contracts automatically enforce approval rules and coordinate settlements across multiple entities, eliminating manual authentication delays while ensuring comprehensive verification.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If multiple service providers and systems are coordinated for approval processes, then complete authentication and fraud prevention are achieved, but the number of parties causes processing delays

Engineering Contradiction:

Improvefraud preventionVSAvoidpayment processing resolution

Core Design Contradiction:

ReliabilityVSProductivity

Solution Approach 1:

The system implements self-service through smart contracts that automatically execute approval workflows and settlement processes. The smart contracts autonomously verify conditions, coordinate between service providers, and enforce fraud prevention rules without requiring manual intervention from each party, thus maintaining security while improving productivity.

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

The patent establishes pre-defined approval rules and smart contract logic before processes begin. Authentication requirements and fraud prevention criteria are programmed in advance, allowing the system to automatically evaluate and process approvals without ad-hoc coordination delays among multiple parties.

Inventive Principle:

Principle #10Preliminary action

3Reliability

If traditional payment processing systems are used with multiple entities, then comprehensive authentication is achieved, but the timeframe for payment processing resolution increases

Engineering Contradiction:

Improveauthentication requirementsVSAvoidpayment processing resolution timeframe

Core Design Contradiction:

ReliabilityVSDuration of action of moving object

Solution Approach 1:

The patent replaces traditional mechanical payment processing systems with a digital distributed ledger system. This substitution enables real-time recording of approvals and settlements on immutable ledgers, eliminating the sequential processing delays inherent in traditional systems while maintaining comprehensive authentication through smart contract-enforced rules.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS20230052860A1Systems and methods for smart contracts using multiple distributed ledgers

Publication Date: 2023.02.16 JPMORGAN CHASE BANK NA

AI summary

Systems and methods for complex process flow approval using distributed ledgers are disclosed. The method may include generating a process initiation message based on input from a second service provider or a user. The method may include recording the process initiation message on a first distributed ledger. The method may include monitoring the first distributed ledger for an indication of an approval event. The method may include generating a settlement event based on the indication of the approval event. The method may include recording the settlement event on the first distributed ledger. The method may include communicating a settlement event message to a second distributed ledger. The method may include generating a virtual payment instrument associated with the settlement event message, the indication of the approval event, and the process initiation message.