Blockchain validation methods
Transaction validation is the process of determining if a transaction conforms to certain protocol requirements to deem it as valid. Transaction validation is the process of determining if a transaction conforms to specific rules to deem it as valid. Validators check if transactions meet protocol requirements before adding the transactions to the distributed ledger as part of the validating process. This validation process is carried out by nodes who store full copies of the blockchain.
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How a Blockchain works: validation protocols
Effective date : FIELD The present disclosure relates to the use of a blockchain in conjunction with a transaction processing network, specifically the posting of transaction message data in a blockchain verified using a transaction processing network and the verification and transmission of blockchain transaction data using a transaction processing network.
Transaction processing networks, also known as payment networks, involve significant hardware and infrastructure that are specifically configured to quickly process payment transactions from anywhere in the world using a vast, interconnected network. Transaction processing networks often operate using detailed rules and standards, to ensure accuracy, security, efficiency, and otherwise maintain order in the processing of potentially trillions of transactions every year.
While such networks are often highly sophisticated, transaction processors are often constantly developing new technologies to further increase the sophistication of these networks, to provide for even more security to protect against fraud and to provide peace of mind to consumers. Thus, there is a need for a technical solution to further increase the security involved in the processing of payment transactions using a transaction processing network.
The use of blockchains as an alternative for transaction processing has become more desirable in recent years, due to privacy and security concerns, where some consumers value the seemingly complete confidentiality and anonymity of blockchain transactions over an established, centralized processing network. The decentralized nature of a blockchain may be detrimental for a number of consumers, for example, such as due to the lack of security of digital wallets, the instability of blockchain currency, lack of processing speed, etc.
However, it may be useful when used in conjunction with a transaction processing network to provide for added verification of traditionally processed transactions, and for increased performance and processing speed of blockchain transactions. Thus, there is a need for a technical solution where a payment transaction network may be used in conjunction with a blockchain network for increased processing of both types of transactions. The present disclosure provides a description of systems and methods for validating blockchain transactions using a transaction processing network.
The scope of the present disclosure is best understood from the following detailed description of exemplary embodiments when read in conjunction with the accompanying drawings. Included in the drawings are the following figures:. Further areas of applicability of the present disclosure will become apparent from the detailed description provided hereinafter. It should be understood that the detailed description of exemplary embodiments are intended for illustration purposes only and are, therefore, not intended to necessarily limit the scope of the disclosure.
Payment Network—A system or network used for the transfer of money via the use of cash-substitutes. Payment networks, also referred to herein as transaction processing networks, may use a variety of different protocols and procedures in order to process the transfer of money for various types of transactions.
Transactions that may be performed via a payment network may include product or service purchases, credit purchases, debit transactions, fund transfers, account withdrawals, etc.
Payment networks may be configured to perform transactions via cash-substitutes, which may include payment cards, letters of credit, checks, transaction accounts, etc. Blockchain—A public ledger of all transactions of a blockchain-based currency.
One or more computing devices may comprise a blockchain network, which may be configured to process and record transactions as part of a block in the blockchain. Once a block is completed, the block is added to the blockchain and the transaction record thereby updated.
In many instances, the blockchain may be a ledger of transactions in chronological order, or may be presented in any other order that may be suitable for use by the blockchain network. In some configurations, transactions recorded in the blockchain may include a destination address and a currency amount, such that the blockchain records how much currency is attributable to a specific address.
In some instances, additional information may be captured, such as a source address, timestamp, etc. In some cases, such data may be included in the blockchain as part of transactions, such as included in additional data appended to transaction data.
In some instances, the inclusion of such data in a blockchain may constitute a transaction. In such instances, a blockchain may not be directly associated with a specific digital, virtual, fiat, or other type of currency.
The system may include a processing server The processing server , discussed in detail below, may be configured to assist in the validation of both electronic payment transactions processed using a payment network and blockchain transactions associated with a blockchain network The processing server may be part of a computing system of the payment network or may be external to the payment network but configured to communicate with the payment network using the payment rails, which herein may refer to infrastructure associated with the payment network used in the processing of payment transactions and the communication of transaction messages and other similar data between the payment network and other entities interconnected with the payment network, such as the processing server The payment rails may be comprised of the hardware used to establish the payment network and the interconnections between the payment network and other associated entities, such as financial institutions, gateway processors, etc.
In some instances, the processing server may be a transaction processing device , which may be a computing device associated with the payment network used in the processing of electronic payment transactions using traditional methods. Additional detail regarding payment networks and transaction processing devices is discussed below with respect to the process illustrated in FIG.
The processing server may be configured to communicate with a financial institution In some instances, the processing server may be a part of a computing system of the financial institution In other instances, the processing server may communicate with the financial institution using a suitable communication network, such as the Internet, a local area network, a wireless area network, a radio frequency network, etc.
The financial institution may be an entity involved in the conducting and processing of payment transactions, such as a participant e. In some cases, the financial institution may be an issuer , which may be a financial institution, such as an issuing bank, that issues a transaction account used to fund a payment transaction.
In other cases, the financial institution may be an acquirer , which may be a financial institution, such as an acquiring bank, that issues a transaction account used to receive funds in a payment transaction. In some instances, a financial institution may be both an issuer and acquirer , and, in some cases, may participate in a transaction as both issuer and acquirer As illustrated in FIG.
In some embodiments, the processing server may be a node in the blockchain network As a node in the blockchain network , the processing server may be configured to post blockchain transactions to a blockchain associated with the blockchain network , and may also be configured to validate transactions posted to the blockchain.
Methods for validating transactions posted to a blockchain will be apparent to persons having skill in the relevant art, and may include, for example, proof of work calculations and confirmations. In some instances, transaction processing devices may be configured as nodes for a blockchain network In some embodiments, the processing server and one or more transaction processing devices may comprise a blockchain network In some cases, a processing server may be a priority node in a blockchain network such that transactions posted to the blockchain from the processing server may be verified with a higher priority or may be considered pre-verified by the processing server for faster adding to the associated blockchain as a result of the processes discussed herein.
In some instances, the processing server may be configured to validate electronic payment transactions processed via the payment network via the use of a private blockchain associated with a blockchain network such as may include the processing server and transaction processing devices In a traditional electronic payment transaction, an acquirer associated with a merchant involved in the payment transaction may submit a transaction message to the payment network via a transaction processing device The transaction message may be a specially formatted data message that is formatted based on one or more standards governing the exchange of financial transaction messages, such as the International Organization of Standardization's ISO standard.
Transaction messages may include a plurality of data elements configured to store data as set forth in the associated standard, such as data elements configured to store a primary account number used to fund the payment transaction, a transaction amount, a geographic location, a merchant identifier, an acquirer identifier, an issuer identifier, financial institution data, currency data, point of sale data, and other data associated with the payment transaction that may be useful in the processing thereof.
In some instances, a transaction message may also include a message type indicator, which may be indicative of a type for the transaction message. For example, the message type indicator may indicate the transaction message as an authorization request, authorization response, clearing record, settlement request, settlement record, etc.
The transaction message may be electronically transmitted by the acquirer to the transaction processing device and then to the payment network using the payment rails or a suitable alternative communication network configured for the secure transmission of transaction messages. The payment network or transaction processing device may be configured to forward the transaction message to the processing server for enhanced validation using the private blockchain.
In some instances, the transaction message may be forwarded to the processing server prior to traditional processing of the payment transaction using the payment network In other instances, the payment transaction may be processed e. The processing server may receive the transaction message, which may include a plurality of data elements each configured to store a transaction data value associated with the related payment transaction.
The processing server may be configured to generate a data record, which may correspond to a blockchain transaction to be posted to the private blockchain. The data record may include the message type indicator included in the transaction message as well as one or more of the transaction data values stored in the corresponding data elements in the transaction message. The data record may then be posted to the private blockchain by the processing server The data record may be subsequently verified by one or more nodes included in the associated blockchain network , such as the transaction processing devices comprising the blockchain network The private blockchain may thus be used as a secure and confidential, yet publicly accessible, record of processed payment transactions for third party verification.
In some instances, the generated data record may not include transaction account numbers. In some cases, one or more transaction data values may be hashed, such that the values may be verified via the generated data record, without the underlying transaction data values being obtainable. For example, the primary account number associated with the transaction account used to fund the payment transaction may be hashed such that the payer may be verified using the hashed primary account number, but without the actual primary account number being obtainable via the data record posted to the private blockchain.
Along with being configured to use a private blockchain to validate a payment transaction processed using the payment network , the processing server may also be configured to validate blockchain transactions posted to a blockchain associated with the blockchain network via the payment network and associated payment rails. In such embodiments, the processing server may receive a transaction message via the payment rails from the payment network , a transaction processing device , a financial institution , the blockchain network , or other suitable entity.
The transaction message may be formatted based on one or more standards, such as the ISO standard, and include a plurality of data elements configured to store data including transaction data values and blockchain data.
The blockchain data may be data associated with a blockchain transaction, such as a sender address, destination or recipient address, network identifier, a network address, a currency amount, etc.
In some embodiments, each data value in the blockchain data may be stored in a separate data element in the received transaction message.
In other embodiments, all of the blockchain data may be stored in a single data element. In some instances, data elements configured to store blockchain data may be reserved for private use as indicated in the associated formatting standards. The processing server may store a plurality of transaction rules for the verification and authentication of payment and blockchain transactions.
The transaction rules may include authentication rules configured to authenticate transaction data values stored in corresponding data elements in a transaction message, as well as verification rules configured to verify blockchain data associated with a blockchain transaction. Upon receipt of the transaction message including the blockchain data, the processing server may be configured to apply the authentication rules to the transaction data values stored therein and the verification rules to the blockchain data stored therein to generate authentication and verification scores, respectively.
The authentication score may indicate a likelihood of fraud, such as based on a comparison of a merchant identifier to a geographic location, a transaction amount to a blockchain currency amount, etc.
The verification score may indicate a likelihood of fraud for the blockchain transaction, such as based on the currency amount and the sender address e. The processing server may generate a data message that includes the blockchain data from the transaction message as well as the identified authentication and verification scores, and may electronically transmit the data message to the blockchain network The blockchain network may evaluate the blockchain data for posting to the associated blockchain depending on the authentication and verification score.
In some instances, the blockchain network may have a separate threshold for the authentication score and the verification score. In some cases, one blockchain network may have different thresholds from a different blockchain network , such as in instances where the processing server may be configured to provide enhanced validation of blockchain transactions using the payment network for more than one blockchain.
Methods and systems discussed herein enable the processing server to provide additional validation of electronic payment transactions via the use of a private, trusted blockchain, as well as additional validation of blockchain transactions via the use of transaction messages electronically transmitted in a trusted payment network.
The processing server may therefore provide for enhanced validation of both electronic payment transactions and blockchain transactions, resulting in higher security for both types of transactions and decreased fraud, while protecting and maintaining a high level of consumer privacy. It will be apparent to persons having skill in the relevant art that the embodiment of the processing server illustrated in FIG. For example, the computer system illustrated in FIG.
The processing server may include a receiving device The receiving device may be configured to receive data over one or more networks via one or more network protocols.
In some embodiments, the receiving device may be configured to receive data over the payment rails, such as using specially configured infrastructure associated with payment networks for the transmission of transaction messages that include sensitive financial data and information.
In some instances, the receiving device may also be configured to receive data from financial institutions , payment networks , transaction processing devices , issuers , acquirers , blockchain networks , and other entities via alternative networks, such as the Internet. In some embodiments, the receiving device may be comprised of multiple devices, such as different receiving devices for receiving data over different networks, such as a first receiving device for receiving data over payment rails and a second receiving device for receiving data over the Internet.
The receiving device may receive electronically data signals that are transmitted, where data may be superimposed on the data signal and decoded, parsed, read, or otherwise obtained via receipt of the data signal by the receiving device In some instances, the receiving device may include a parsing module for parsing the received data signal to obtain the data superimposed thereon.
For example, the receiving device may include a parser program configured to receive and transform the received data signal into usable input for the functions performed by the processing device to carry out the methods and systems described herein.
The receiving device may be configured to receive data signals from the transaction processing devices , payment networks , and financial institutions , which may be superimposed with transaction messages, and may also be electronically transmitted via the payment rails.
The transaction messages may be formatted based on one or more standards, such as the ISO standard, and may include a plurality of data elements. Each data element may be configured to store transaction data values as set forth in the associated standard.
In some instances, one or more data elements may also be configured to store blockchain data associated with a blockchain transaction.
How does a transaction get into the blockchain?
You might be using an unsupported or outdated browser. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website. You may be familiar with the most popular versions, Bitcoin and Ethereum, but there are more than 5, different cryptocurrencies in circulation. A cryptocurrency is a medium of exchange that is digital, encrypted and decentralized.
What Is Blockchain?
Blockchain Types. Proof-of-Work Blockchains. Proof-of-Stake Blockchains. Private and Consortium Blockchains. Not all blockchains are created equal; their diverse consensus mechanisms have unique implications for accessibility, security, and sustainability. By Cryptopedia Staff. Blockchain systems vary considerably in their design, particularly with regard to the consensus mechanisms used to perform the essential task of verifying network data. While blockchain might appear to many as a monolithic technology, there is a great deal of variation between how different blockchain networks function. One foundational differentiator is the type of consensus mechanism that each blockchain uses. A consensus mechanism is the process through which a distributed network reaches an agreement about information on the network — for example, whether transactions are valid and in what order they occur.
Blockchain on AWS
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Establishes a moratorium on consolidated operations that use proof-of-work authentication methods to validate blockchain transactions. D, WF 21st Senate District. D, WF 53rd Senate District. D, WF 25th Senate District. D, WF 28th Senate District. D 60th Senate District.
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The major innovation of blockchain technology is that information is stored on a distributed ledger and validated by the entire network. This article will shed light on how this data validation process works. Every time a transaction is conducted on a blockchain , the transaction data will be stored in a new block. This new block will then be added to the blockchain.
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