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Blockchain Transactional Risk Factor

IP.com Disclosure Number: IPCOM000248078D
Publication Date: 2016-Oct-24
Document File: 2 page(s) / 87K

Publishing Venue

The IP.com Prior Art Database

Abstract

Disclosed is a method to dynamically and intelligently determine a blockchain transaction risk factor. This risk factor can be used to assess the potential risk associated with a particular blockchain transaction.

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Blockchain Transactional Risk Factor

Forks are temporary inconsistencies between different versions of a blockchain. These forks are resolved due to the eventual convergence of more blocks being solved and added to one of the forks in a chain. The longest chain wins, because of the extra difficulty in solving the extra block(s).

When there is a fork in the blockchain, there is a possibility for double-spend attacks*. The decentralized nature of a blockchain, the lack of any guarantee or recourse to double-spend attacks, or a transaction not processing in the order a purchaser expects, etc. are the primary challenges to the potential wide acceptance of blockchain technology. Blockchain technology has a lack of centralized oversight.

The solution is a method to dynamically and intelligently determine a blockchain transaction risk factor. This risk factor can be used to assess the potential risk associated with a particular blockchain transaction.

For example, Seller Rafal is selling a used car and has offers from Buyer Roger and Buyer Chad. Seller Rafal can use this risk factor to help select the buyer with the best opportunity for a successful blockchain transaction.

A party in a transaction can have a dynamic risk threshold computed per the associated

transaction in the blockchain. The threshold may be based in part on the risk the party is willing to take on that side of the transaction, as well as the confidence level of the transaction. If the transaction risk threshold is met, then the system completes the transaction.

The variables in blockchain transaction risk determination include:

• The impact to the profit/loss if fork or double spend attack causes loss • Transaction size (two bitcoins vs. 1,000 bitcoins)

• Any existing relationship between the parties in the transaction (e.g., have been successfully doing business for five years)


• Number of transactions that the second party performed in this block and potential future...