Smart Contract Point Settlement via Blockchain
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Solution Overview
Problem
Existing reward programs in centralized computer systems are vulnerable to attacks, require complex computing systems, and lack a robust methodology for managing and processing points, leading to inefficiencies and increased liabilities for organizations, as consumers and merchants struggle with expired points and negotiation of compensation rates.
Innovation Solution
A distributed network using blockchain technology and smart contracts to securely manage transactions, store points, and automate point redemption and settlement, with personalized smart contracts for consumers and merchants that maintain point balances, expiration dates, and settlement rules, reducing the need for centralized control and improving transaction efficiency.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If centralized computer systems are used to manage reward programs, then transaction processing can be performed, but the systems become vulnerable to attacks and require complex computing infrastructure
Solution Approach 1:
The patent replaces the centralized mechanical computing system with a blockchain-based distributed ledger system. The smart contract automatically executes reward distribution logic based on predefined conditions, eliminating the need for complex centralized computing infrastructure while improving security through cryptographic verification and decentralized consensus mechanisms.
2Productivity
If centralized systems manage points for consumers and merchants, then transactions can be processed, but significant resources are devoted and liabilities increase
Solution Approach 1:
The smart contract enables self-service automation where the contract automatically monitors transaction conditions, calculates reward points, and executes distributions without requiring organizational intervention. This eliminates the need for manual processing resources while maintaining full transaction processing capability, directly reducing organizational energy consumption and liabilities.
3Adaptability or versatility
If points are associated with expiration dates in centralized systems, then consumers may lose unused points, but consumers lack awareness and alternative options
Solution Approach 1:
The smart contract incorporates automatic feedback mechanisms that monitor point expiration dates and notify consumers through the digital wallet interface. The system provides real-time information about expiring points and automatically executes transactions when consumers choose to redeem, ensuring consumers maintain full awareness and control over their points while preserving expiration date functionality.
4Ease of operation
If merchants negotiate compensation rates with the organization, then settlement can occur, but the process requires significant time and resources
Solution Approach 1:
The smart contract contains pre-programmed compensation rate logic that automatically determines settlement amounts based on predefined criteria and current market data. This preliminary configuration eliminates the need for time-consuming negotiations, as the contract autonomously executes settlements according to established rules, dramatically reducing both time and resource requirements while maintaining operational simplicity.
Data Source
AI summary
Systems, as described herein, may use smart contracts and distributed ledgers in distributed networks to determine points earned by consumer and settle points for merchants. Distributed ledgers in the distributed network may be used to store transactions executed by merchant digital wallets and consumer digital wallet. Smart contracts in distributed networks may be used to maintain point balances associated with the consumer digital wallets and the merchant digital wallets of the consumer, determine points earned by consumer digital wallets, settle points for merchant digital wallets, and send messages to consumer digital wallets regarding expiring points. Systems, as described herein, may also send individualized recommendations of goods and services to the consumer digital wallets.