Smart Contract Policy Validation via Compliance Tokens
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Solution Overview
Problem
There is no method to ensure compliance with transaction policies in transactions conducted on centralized or distributed digital ledgers, as existing protocols lack a way to verify that all parties involved abide by the defined policies, making them unsuitable for transactions requiring strict compliance.
Innovation Solution
A system and method for validating policies of a smart contract on a centralized or distributed digital ledger, where a user's credentials are verified by a trusted organization, and a token is issued if the user complies with the transaction policies, allowing the user to execute transactions only if the token is valid and controlled by them.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If a protocol smart contract is used for transactions on a centralized or distributed digital ledger, then transaction execution is enabled, but compliance with transaction policies cannot be ensured
Solution Approach 1:
The system performs preliminary credential verification and policy compliance checks before allowing transaction execution. A trusted organization verifies user credentials against transaction policies in advance, and only users with valid compliance tokens can execute transactions on the protocol smart contract, thus ensuring policy compliance is established before the transaction occurs.
Solution Approach 2:
The patent introduces an intermediary trusted organization that mediates between users and the protocol smart contract. This intermediary verifies user credentials, determines policy compliance, and issues tokens that enable transaction execution. The intermediary acts as a gatekeeper that ensures policy compliance while allowing seamless transaction execution through the token mechanism.
2Reliability
If credential verification and policy compliance checking are implemented, then transaction policy compliance is ensured, but system complexity increases
Solution Approach 1:
The system implements self-service through automated credential verification and compliance checking mechanisms. The trusted organization's system automatically verifies user credentials against transaction policies using cryptographic proofs and automated validation logic, reducing the need for manual intervention and minimizing system complexity despite the enhanced compliance requirements.
Solution Approach 2:
The patent transforms the complex compliance verification process into a simplified token parameter system. Instead of complex ongoing verification, the system changes the approach by issuing discrete compliance tokens with specific parameters (validity period, policy scope) that users present for transaction execution. This parameter-based approach simplifies the interaction while maintaining comprehensive compliance checking.
Data Source
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AI summary
Systems and methods are described for policy-validated transactions using a centralized or distributed ledger. A request to execute a transaction and a transaction signature is received from a user's computing device. The transaction signature is generated with a private key of the user's computing device. The transaction corresponds to a token associated with the user's computing device and the transaction is subject to a first policy of a set of one or more policies. The transaction signature corresponds to the request to execute the transaction is determined using a public key of the user's computing device. In response to the determination, the token associated with the user's computing device is retrieved from the centralized or distributed ledger. The transaction is executed if the token is associated with the first policy and the token is valid.