Universal Payment Channels for Cross-Chain Transactions
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Solution Overview
Problem
The increasing number of blockchain-based cryptocurrencies has made it difficult to facilitate transactions between different cryptocurrency systems, as there is no trusted central authority to perform conversions while maintaining security, and traditional blockchain transactions are time-consuming due to the need for verification and mining processes.
Innovation Solution
A method and system that uses a third-party server computer to facilitate transactions between users of different blockchains by posting deposit transactions, updating states, and verifying conditions, allowing for faster transaction processing without relying on central authorities or extensive blockchain interactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If transactions are processed through traditional blockchain verification and mining processes, then security and decentralization are maintained, but transaction time increases significantly (minutes to hours)
Solution Approach 1:
The patent segments the transaction processing into two distinct phases: a fast off-chain execution phase where transactions are processed immediately with minimal delay, and a periodic on-chain settlement phase where batched transaction data is committed to the blockchain for security verification. This segmentation allows the system to achieve both fast processing and security without requiring every transaction to go through the slow blockchain verification process.
Solution Approach 2:
The patent introduces an intermediary off-chain data structure (such as a sidechain or layer-2 solution) that acts as a mediator between users and the main blockchain. This intermediary layer handles the time-consuming verification and mining processes off-chain, while only committing essential settlement data to the main blockchain, thereby reducing transaction processing time while maintaining security through periodic blockchain anchoring.
2Productivity
If a trusted central authority (like a bank) is used for currency conversion, then transaction speed improves, but decentralization and security are compromised
Solution Approach 1:
The patent employs an intermediary off-chain protocol that enables fast cryptocurrency conversions without requiring a trusted central authority. The protocol uses cryptographic commitments and state channel technology to allow parties to transact rapidly off-chain, with security guaranteed by periodic blockchain settlements that verify the integrity of conversions without needing a central trusted party.
Solution Approach 2:
The patent implements self-service mechanisms where the system automatically performs verification and settlement operations without requiring manual intervention from central authorities. Smart contracts and automated protocols handle the conversion and verification processes, allowing the decentralized system to serve itself while maintaining security and speed.
3Reliability
If multiple blockchain interactions are required for transactions between different cryptocurrencies, then security is maintained, but system complexity and processing time increase
Solution Approach 1:
The patent creates a universal off-chain protocol that can handle multiple different cryptocurrency conversions through a single standardized interface. This universal layer abstracts away the complexities of individual blockchain interactions, allowing the system to maintain security across different chains while presenting a simplified, unified mechanism to users and reducing overall system complexity.
Solution Approach 2:
The patent merges multiple separate blockchain verification processes into a single combined settlement operation. Instead of requiring separate interactions with each blockchain for every transaction, the system batches and combines verification operations, reducing the number of individual blockchain interactions needed while maintaining security across all involved cryptocurrencies.
Data Source
AI summary
Systems and methods for transferring value. A method includes posting, by a user device to a blockchain, a deposit transaction comprising a deposit value and conditions and updating, by the user device, a state according to a transaction amount. The method also includes transmitting, by the user device, a state update of the state to a server computer and responsive to transmitting the state update, and receiving, by the user device, a payment complete message comprising a tuple from the server computer. The method also includes verifying, by the user device, the conditions and processing, by the user device, a server deposit transaction on the blockchain in response to verifying.