Digital Wallet Custodial to Non-Custodial Transition
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Solution Overview
Problem
Users face challenges in transitioning from custodial digital wallets, where they rely on a third-party for security, to non-custodial wallets, which require them to manage their private keys independently, leading to loss of brand recognition and asset unrecoverability if keys are lost.
Innovation Solution
A system and method that allows users to transition from custodial to non-custodial digital wallets by generating and maintaining unique private and public keys, enabling secure storage and transfer of custody without changing existing keys, thus preserving brand recognition and user control.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If users transition from custodial to non-custodial wallets to gain autonomy and control over private keys, then user security and independence are improved, but ease of operation deteriorates as users must manage their own keys without third-party support
Solution Approach 1:
The patent introduces a custodial wallet service as an intermediary that manages private keys on behalf of users during the transition period. This mediator allows users to gradually develop key management skills while maintaining security through the platform's infrastructure, bridging the gap between full custodial and fully non-custodial models.
Solution Approach 2:
The system performs preliminary actions by generating and securing private keys on the platform before users need to manage them independently. The platform pre-configures wallet infrastructure, security protocols, and key management systems, allowing users to transition to non-custodial mode when ready rather than starting from scratch.
2Ease of operation
If users maintain custodial wallets with third-party management for ease of use, then ease of operation is improved, but adaptability deteriorates as users cannot fully control or transfer their digital assets
Solution Approach 1:
The patent implements a dynamic wallet system that allows users to transition between custodial and non-custodial modes. The wallet structure evolves from platform-managed private keys to user-controlled keys, adapting to the user's growing confidence and understanding of cryptographic key management while maintaining continuous access to assets.
Solution Approach 2:
The digital wallet system serves multiple functions: it acts as a custodial wallet for beginners needing support, as a transitional hybrid model for learning, and as a fully non-custodial wallet for advanced users seeking complete control. This multi-functional design accommodates diverse user needs and skill levels within a single ecosystem.
3Adaptability or versatility
If users are provided with new private and public keys when transitioning to non-custodial wallets, then autonomy is improved, but loss of information occurs as brand recognition and existing key associations are lost
Solution Approach 1:
The system performs preliminary actions by maintaining and preserving the original public key and brand associations throughout the transition process. Users receive new private keys for enhanced security and autonomy, but the public key identity remains intact, preserving brand recognition and existing wallet associations while improving security posture.
Data Source
AI summary
A computer-implemented method for managing one or more digital wallets is provided. The method includes obtaining, by a computing system of a platform, an end user request to create an end user digital wallet on behalf of the end user; generating, by the computing system of the platform, the end user digital wallet for the end user, wherein generating, by the computing system of the platform, the end user digital wallet comprises obtaining a user private key and a user public key, and generating user authentication information; maintaining, by the platform, the end user digital wallet for the end user; obtaining, by the computing system of the platform, a request from the end user to transfer custody of the end user digital wallet to a recipient; and providing, by the computing system of the platform, the user private key to the recipient.