Tokenized Blockchain Entity Transfer Without Protocol Changes
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Solution Overview
Problem
Existing blockchain technologies are limited in their versatility and require trusted third parties for secure transactions, lacking efficient mechanisms for automated tasks and processes beyond cryptocurrency applications.
Innovation Solution
A method for secure control and transfer of assets using tokenization techniques on a blockchain, incorporating cryptographic keys and metadata embedding in scripts, enabling secure transactions without altering the underlying blockchain protocol, and utilizing peer-to-peer networks for efficient exchange and ownership transfer.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If blockchain technology is used for secure transactions, then security and data integrity are improved, but device complexity and difficulty of operation increase due to cryptographic keys and protocol requirements
Solution Approach 1:
The patent introduces a trusted third party that acts as an intermediary to manage cryptographic keys and facilitate transactions. This mediator handles the complexity of key generation, distribution, and management, allowing users to benefit from blockchain security without directly dealing with the cryptographic complexity.
Solution Approach 2:
The system enables automated transaction validation and execution through smart contracts and predefined rules. Once the trusted third party sets up the initial cryptographic framework, the system automatically performs security validations, transaction matching, and execution without requiring users to manually manage cryptographic keys or understand complex protocols.
2Ease of operation
If traditional trusted third parties are used for secure transactions, then ease of operation is improved, but reliability and security are worsened due to potential trust issues and centralization
Solution Approach 1:
The patent introduces a trusted third party that acts as an intermediary to manage cryptographic keys and facilitate transactions. This mediator handles the complexity of key generation, distribution, and management, allowing users to benefit from blockchain security without directly dealing with the cryptographic complexity.
Solution Approach 2:
The system separates the trust requirement into two distinct layers: (1) trust in the trusted third party for key management and initial setup, and (2) cryptographic verification by the decentralized blockchain network for transaction validation. This segmentation allows the system to leverage both centralized trust (for operational simplicity) and decentralized verification (for reliability).
3Productivity
If blockchain protocol is altered to enable efficient entity transfer, then productivity is improved, but adaptability is worsened due to protocol modification requirements
Solution Approach 1:
The patent segments the entity transfer process into distinct components: (1) representation of entities as tokens or data structures, (2) transaction creation with embedded entity information, (3) validation by blockchain nodes, and (4) execution of transfer. This modular approach allows efficient processing of entity transfers using existing blockchain protocols without requiring protocol modifications.
Solution Approach 2:
The system designs a universal transaction structure that can represent multiple types of entities (digital assets, physical goods, services, rights) using the same blockchain protocol. This multi-functional approach allows the system to handle diverse entity transfers efficiently without requiring separate protocol implementations for different entity types.
Data Source
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AI summary
The invention relates to blockchain technologies such as the Bitcoin ledger, and for the control and performance of secure, efficient exchanges conducted via the blockchain. It comprises tokenisation techniques and methods for embedding metadata in a blockchain transaction. It provides a computer implemented method for performing a transfer, the method comprising scanning entries in a distributed hash table (DHT) distributed across a first network, the DHT comprising a plurality of entries, each entry comprising an invitation to perform an exchange and a link to a transaction on a peer-to-peer (P2P) distributed ledger distributed across a second network, each invitation including metadata comprising an indication of entities to be exchanged and one or more conditions for the exchange; determining a match between a first set of metadata in a first invitation of a first entry from a first user and a second set of metadata in a second invitation of a second entry from a second user, the determining comprising: identifying a match between indications of entities to be exchanged in the first and second invitations; and identifying a match between one or more of the conditions of the first invitation and one or more of the conditions of the second invitation; generating a first exchange transaction; and broadcasting, over the second network, the first exchange transaction for inclusion on a P2P distributed ledger, wherein the first exchange transaction comprises: an indication of a first quantity of a cryptocurrency to be transferred; a first input provided from an output of a transaction on the P2P distributed ledger linked to the first entry; a first script, a first user private key associated with the first user, a first third-party private key associated with a first third-party, wherein the first script comprises: the first set of metadata, a first user public key associated with the first user, the first user public key being a cryptographic pair with the first user private key, and a first third-party public key pair associated with the first third-party, the first third-party public key being a cryptographic pair with the first third-party private key and a first output indicating a transfer of a first quantity of the first entity from the first user to the second user