Virtual Currency System for Direct Irreversible Transactions
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Solution Overview
Problem
Existing ecommerce systems lack the attributes of direct transmission, irreversibility, price stability, and functionally unlimited liquidity present in traditional face-to-face cash transactions, leading to increased transaction costs and risks for merchants due to the involvement of financial intermediaries.
Innovation Solution
A system and method implementing a virtual currency with a decentralized network of computing devices that enables direct, irreversible transactions without intermediaries, using a virtual currency mint to create and manage units of currency, and a distributed hash table for validation and storage, allowing transactions to be validated and stored without central authority involvement.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Weight of moving object
If traditional face-to-face cash transactions are used, then direct transmission and irreversibility are achieved, but price stability and functionally unlimited liquidity are not available
Solution Approach 1:
The system segments the transaction function into separate modules: a virtual currency component for direct transmission and a real-world currency component for price stability. The virtual currency enables peer-to-peer transactions without intermediaries, while the peg to real-world currency maintains price stability, thus resolving the contradiction between direct transmission and price stability.
2Stability of the object's composition
If financial intermediaries are used in ecommerce transactions, then price stability is maintained, but direct transmission and irreversibility are lost
Solution Approach 1:
The patent introduces a virtual currency as an intermediary instrument that bridges the sender and recipient directly, eliminating traditional financial intermediaries (banks, payment processors) while maintaining price stability through pegging to real-world currency. This resolves the contradiction by providing direct transmission without sacrificing price stability.
3Adaptability or versatility
If financial intermediaries process ecommerce transactions, then transactions can be conducted remotely, but transaction costs and risks for merchants increase
Solution Approach 1:
The system extracts the intermediary function from traditional financial institutions and relocates it to a decentralized virtual currency system. By removing banks and payment processors from the transaction flow, the system eliminates associated fees and risks while maintaining remote transaction capability, thus resolving the contradiction between remote transaction capability and transaction costs.
4Weight of moving object
If a decentralized network without intermediaries is used, then direct transmission and irreversibility are achieved, but system complexity increases
Solution Approach 1:
The virtual currency system performs multiple functions within a single decentralized framework: it enables direct transmission, ensures irreversibility, maintains price stability through pegging, and provides remote transaction capability. By consolidating these functions into one universal system rather than separate components, the patent reduces overall system complexity while achieving direct transmission without intermediaries.
Data Source
AI summary
Methods performed by a validation one or a sender one of a plurality of nodes implemented by computing devices in a network. The sender node sends, to the validation node, a request to transfer an amount of virtual currency from a sender account (associated with transaction receipts) to a recipient account. The request includes first copies of the receipts or references thereto. The validation node requests second copies of the receipts from at least two of the nodes, and receives the second copies from fewer than all of the nodes. The validation node determines whether the first copies have been tampered with by comparing the first and second copies to one another. When tampering has not occurred, at least one new receipt is generated indicating the amount has been transferred. Then, the at least one new receipt is forwarded to fewer than all of the nodes for storage.