US10963881B2 — Method and system for fraud control of blockchain-based transactions (Part 1 of 2)
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Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.
USO10963881B2
( 12) United States Patent ( 10) Patent No .: US 10,963,881 B2
Davis (45 ) Date of Patent : Mar. 30 , 2021
( 54 ) METHOD AND SYSTEM FOR FRAUD FOREIGN PATENT DOCUMENTS
CONTROL OF BLOCKCHAIN - BASED
TRANSACTIONS CN 104392354 A 3/2015
EP 2 634 738 A1 9/2013
( 71 ) Applicant: MasterCard International
Incorporated , Purchase , NY ( US ) OTHER PUBLICATIONS
( 72 ) Inventor : Steven Charles Davis , Saint Peters , International Search Report ( Forms PCT / ISA / 220 and PCT/ISAI
MO ( US ) 210 ) and the Written Opinion ( Form PCT / ISA / 237 ) dated Jun . 21 ,
2016 , by the International Searching Authority in corresponding
( 73 ) Assignee : MASTERCARD INTERNATIONAL International Application No. PCT/US2016 /031253 . ( 12 pages ) .
INCORPORATED , Purchase, NY (US ) (Continued)
( * ) Notice : Subject to any disclaimer, the term of this
patent is extended or adjusted under 35 Primary Examiner Steven S Kim
U.S.C. 154 ( b ) by 1559 days. Assistant Examiner Timothy Paul Sax
( 21 ) Appl . No .: 14 /719,030 (74 ) Attorney, Agent, or Firm Buchanan Ingersoll &
Rooney PC
( 22 ) Filed : May 21 , 2015
( 65 ) Prior Publication Data ( 57 ) ABSTRACT
US 2016/0342994 A1 Nov. 24 , 2016 A method for linking blockchain transactions to privately
(51 ) Int. Ci. verified identities includes : storing account profiles, each
G06Q 20/40 ( 2012.01 ) profile including data related to a transaction account includ
G06Q 20/06 ( 2012.01 ) ing an account identifier and account data ; receiving a
(Continued )
transaction message , the message including a first data
( 52 ) U.S. CI . element configured to store a personal account number, a
CPC G06Q 20/4016 (2013.01 ) ; G06Q 20/027 second data element configured to store a merchant identi
( 2013.01 ) ; G06Q 20/0655 ( 2013.01 ); fier, and a third data element configured to store a blockchain
( Continued ) network identifier; identifying a first account profile that
includes the personal account number ; identifying a second
( 58 ) Field of Classification Search account profile that includes the merchant identifier; receiv
None ing a transaction notification , the notification indicating a
See application file for complete search history. transaction processed using a blockchain network associated
( 56) References Cited with the blockchain network identifier and including a
transaction identifier and an address identifier associated
U.S. PATENT DOCUMENTS with the first or second account profile ; and storing a linkage
between the transaction identifier and the address identifier,
6,889,325 B1 * 5/2005 Sipman G06Q 20/04 the personal account number, and /or the merchant identifier.
380/268
9,397,985 B1 * 7/2016 Seger, II HO4L 63/0442
(Continued ) 16 Claims , 14 Drawing Sheets
issuer Payment Network Acquires
108
112 ? 110
102
104
Zistitis
Payer 106 Payee
Blockchain Network 100
US 10,963,881 B2
Page 2
( 51 ) Int . Ci. 2008/0295180 A1 * 11/2008 Yoneda G06F 21/33
G06Q 20/02 ( 2012.01 ) 726/27
G06Q 40/02 ( 2012.01 ) 2013/0185214 A1 * 7/2013 Azen G06Q 20/206
705/76
G06Q 20/38 ( 2012.01 ) 2013/0282580 A1 10/2013 O'Brien et al .
(52) U.S. CI. 2014/0279403 Al 9/2014 Baird et al .
CPC G06Q 20/382 ( 2013.01 ) ; G06Q 20/4014
( 2013.01 ); G06Q 40/02 ( 2013.01 ) ; G06Q OTHER PUBLICATIONS
2220/00 (2013.01 )
Office Action ( First Office Action) dated Apr. 1 , 2020 , by the China
National Intellectual Property Administration in corresponding Chi
( 56 ) References Cited nese Patent Application No. 201680042848.8 and an English Trans
lation of the Office Action . ( 14 pages ) .
U.S. PATENT DOCUMENTS Office Action ( Examination Report) dated Oct. 26 , 2020 , by the
Intellectual Property India in corresponding India Patent Applica
2008/0282357 A1 * 11/2008 Sharpe G06F 21/10 tion No. 201717040865 with an English Translation of the Office
726/27 Action. (7 pages ).
2008/0288790 A1 * 11/2008 Wilson G06F 21/34
713/194 * cited by examiner
U.S. Patent Mar. 30 , 2021 Sheet 1 of 14 US 10,963,881 B2
114 104 100
Acquirer Paye
110 106
NPeatywmoernkt BNleoctkwcoharikn FIG
.
1
108
Is uer Payer
112 102
U.S. Patent Mar. 30 , 2021 Sheet 2 of 14 US 10,963,881 B2
202 206
Receiving Unit Transmiting Unit
204
Processing Unit
.
FIG
2
110
Acount Database Account Profiles Transaction Database Transaction EDntartieas Memory
208 210 212 214 216
U.S. Patent Mar. 30 , 2021 Sheet 3 of 14 US 10,963,881 B2
302 306
Receiving Unit Transmiting Unit
304
Processing Unit
.
FIG
3
112
Central Database Central Acounts Acount Database Acount Profiles Memory
308 310 312 314 316
U.S. Patent Mar. 30 , 2021 Sheet 4 of 14 US 10,963,881 B2
114
2416
Acquirer BVloeckrcihafiyn Transaction
412 RMespsoangse
110 402
2410
PSreocrevseinrg Generate Mesage Evaluate RCesopodnse FIG
4
.
Transaction
404 TMraensactaigone 408 RMespsoangse
112 406 2414
Is uer
400
Cheforck
Authorization Conduct Blockchain Transaction
U.S. Patent Mar. 30 , 2021 Sheet 5 of 14 US 10,963,881 B2
D
514
500 Transmit Transaction IMsestosuaegre END
510 512
NEentcwodrek Identifier Generate Transaction Mes age
FIG
.
5
YES
508 506
NO
Network Identifier Enco?ded GAednereaste Identifier
YES
502 4 504
START Receive Transaction Request Adres Identifier Incl?uded NO
U.S. Patent Mar. 30 , 2021 Sheet 6 of 14 US 10,963,881 B2
TVranslactuioen TVranslactuioen
606
PuabKeyleic HAlagsorhitnhmgs APdaryese TMEDrelansamctaeignoaetn .
FIG
6
604 610 614
616
INdentwiofirekr EAlngcorditihnmgs ENVneactowlduerdk
608 612
602
600
U.S. Patent Mar. 30 , 2021 Sheet 7 of 14 US 10,963,881 B2
716 718
700 IApdpelnitcaibflye Linkages LSDitnaoktargae END
714
Receive Transaction Notification
YES
712 710
END NO
Did
Blockchain Transaction Occur?
Transmit GFenrearuted Score .
7
FIG
NO
708
706 R
? e q u e s t e d YES
FrIsaud Score RFAurplaeulsdy Score GFernetoarautde
702 704
START Receive Transaction Mes age IndveonltviefdyPArcofoiulnets
U.S. Patent Mar. 30 , 2021 Sheet 8 of 14 US 10,963,881 B2
800 END END
826 822
CUepndtartale Blockchain CAucroeuncty CFUepindtartale ACcuroeuncty END END
824 820 812 816
Curine cy APcrofuinlte DFeiduact Curine cy APcrcoofuinlte CUFepnidtartale ACcuroeuncty CUepndtratleBlockchain ACcuroeuncty FIG.8
BDloecdkcuhacitn
YES
818 810 814
START NO
Fiat
Is CurencyInvolved CFuriAddreantcy PArcofotoiulnet BlAockdchain
Curtoency APcrofuinlte
PAYER YES
804 806
PAYEE CurencyInvo?lved
Receive Transaction Mes age Indveonltviefdy Acounts AcIsount Pay e
Payorer Fiat
is
NO
802 808
U.S. Patent Mar. 30 , 2021 Sheet 9 of 14 US 10,963,881 B2
924 922 916
END TMroadnisfmietd Transaction Message Authorize Transaction TMroadnisfmietd Transaction Mes age END
YES
920 918 914
DPeacylmienetTrfansoactiron RiskHigh NO
Is
Risk Value Accep?table DPeacylmienet Trfansaoctiron IFnsuffnicdienst
NO
908 912
Cur?ency
DRetiersminke Valofue Transaction YES
Suficient
ThIsere Fiat FIG
9
.
YES
910
906
ThIsere Suficient Blockchain Cur?ency NO
Calculate EFquivaletn ACumrouencty
902 904
START Receive Transaction Mes age iPdeanytiefry PArcofoiulnet 900
U.S. Patent Mar. 30 , 2021 Sheet 10 of 14 US 10,963,881 B2
10 2 10 4 10 6 10 8
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fsipeblmdotnrauceomnrledsaf,turlnsitnasyg inealvbdeantcdalstheoroni(,)wodfustdkr
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U.S. Patent Mar. 30 , 2021 Sheet 11 of 14 US 10,963,881 B2
1 02 1 04 1 06 1 08 1 10 1 12
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11
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U.S. Patent Mar. 30 , 2021 Sheet 12 of 14 US 10,963,881 B2
1202 1204 1206 1208 1210 1212
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U.S. Patent Mar. 30 , 2021 Sheet 13 of 14 US 10,963,881 B2
1302 1304 1306 1308 1310 1312 1314
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U.S. Patent Mar. 30 , 2021 Sheet 14 of 14 US 10,963,881 B2
1426
Comunications Path
1412 1414
1418
Removable Removable
SUtnoriagte UStnoriagte 142
1424
Comunications Interface 1410
SecondaryMemory HDairsdk Drive RemovableStorageDrive Interface 1420
140 1406
ComunicationsInfrastructure .
14
FIG
1404 1402 1408
Procesor DisplayInterface Meamiorny
1430
Display
US 10,963,881 B2
1 2
METHOD AND SYSTEM FOR FRAUD Furthermore , because of the anonymous nature of the block
CONTROL OF BLOCKCHAIN -BASED chain , the consumer may be unable to prove their identity
TRANSACTIONS and ownership of a wallet, and thereby have little recourse
if their wallet and / or associated currency is stolen .
FIELD 5 Thus, there is a need to improve on the storage and
processing of transactions that utilize blockchain currencies .
The present disclosure relates to the linking of blockchain Existing payment networks and payment processing systems
transactions to privately verified identities, specifically the that utilize fiat currency are specially designed and config
association of a blockchain transaction to a consumer or ured to safely store and protect consumer and merchant
merchant associated with a transaction account based on 10 information and credentials and to transmit sensitive data
transaction data and stored account profiles. between computing systems . In addition, existing payment
systems are often configured to perform complex calcula
BACKGROUND tions , risk assessments , and fraud algorithm applications
extremely fast, as to ensure quick processing of fiat currency
In recent times , blockchain currencies have seen 15 transactions. Accordingly , the use of traditional payment
increased usage over traditional fiat currencies by consumers networks and payment systems technologies in combination
who value anonymity and security. Currencies that use a with blockchain currencies may provide consumers and
blockchain , such as cryptographic currencies (“ cryptocur- merchants the benefits of the decentralized blockchain while
rencies ” ) , offer consumers a currency that is decentralized still maintaining security of account information and provide
and relatively anonymous and secure in its use . For example, 20 a strong defense against fraud and theft .
a transaction that is posted to a blockchain may not require
any information regarding the sender or recipient of the SUMMARY
currency , and thus may enable the payer and payee of a
transaction to retain anonymity. Such an aspect of block- The present disclosure provides a description of systems
chain transactions may be highly desirable for consumers 25 and methods for linking blockchain transactions to privately
that wish to maintain their privacy, and may help reduce the verified identities.
likelihood of fraud due to theft of their information . A method for linking blockchain transactions to privately
However, while blockchain currencies can often provide verified identities includes : storing , in an account database,
such safety and security for the payer's information , such a plurality of account profiles, wherein each account profile
security may be limited for payees , particularly due to the 30 includes data related to a transaction account including at
limitations of the blockchain . For example, it often takes a least an account identifier and account data ; receiving, by a
significant amount of time , around ten minutes, for a block- receiving device, a transaction message , wherein the trans
chain -based transaction to be processed , due to the computer action message is formatted based on one or more standards
processing time and resources required to verify and update and includes a plurality of data elements including at least a
the blockchain. Conversely, traditional fiat payment trans- 35 first data element configured to store a personal account
actions that are processed using payment networks often number, a second data element configured to store a mer
have processing times that are measured in nanoseconds. As chant identifier, and a third data element configured to store
a result, consumers and merchants that are accustomed to at least a blockchain network identifier; identifying, by a
fast transaction times are often either forced to wait a processing device, a first account profile stored in the
significant amount of time for a blockchain transaction to be 40 account database where the included account identifier cor
conducted , or the payee must rely on the payer's good faith responds to the personal account number stored in the first
that their transfer will be valid . In such latter instances, the data element included in the received transaction message ;
anonymity of the blockchain may leave the payee at a identifying, by the processing device , a second account
disadvantage, because the inability for the payee to identify profile stored in the account database where the included
the payer may prohibit the payee from utilizing various risk 45 account identifier corresponds to the merchant identifier
or fraud detection methods. Therefore, many entities, par- stored in the second data element included in the received
ticularly merchants, retailers, service providers, and other transaction message ; receiving, by the receiving device, a
purveyors of goods and services, may be wary of accepting transaction notification, wherein the transaction notification
blockchain currency for products and participating in block- indicates a transaction processed using a blockchain network
chain transactions. 50 associated with the blockchain network identifier stored in
In addition , the consumers themselves may often be the third data element included in the received transaction
reluctant to using blockchain currencies. Because block- message and includes at least a transaction identifier and an
chain currencies are decentralized and rely on the block- address identifier associated with one of the first account
chain to keep track of what accounts have access to what profile and the second account profile ; and storing , by the
amount of currency, it can be difficult for consumers to 55 processing device, a linkage between the transaction iden
adopt, or even understand, blockchain currencies, particu- tifier included in the received transaction notification and at
larly in relation to well - known and understood traditional least one of: the address identifier, the personal account
fiat currencies and accounts. This may be particularly number, and the merchant identifier.
troublesome for consumers that are accustomed to having A system for linking blockchain transactions to privately
financial institutions hold their currency in an account. The 60 verified identities includes an account database , a receiving
nature of blockchain currencies is that the access to any device , and a processing device. The account database is
given address to which currency is associated is controlled configured to store a plurality of account profiles, wherein
based on possession of electronic credentials, often referred each account profile includes data related to a transaction
to as an electronic wallet , e - wallet , or simply " wallet. ” As account including at least an account identifier and account
such , if the wallet is lost , discarded , or stolen , the associated 65 data. The receiving device is configured to receive a trans
currency often cannot be recovered by the rightful owner action message , wherein the transaction message is format
and may be used without their knowledge and permission. ted based on one or more standards and includes a plurality
US 10,963,881 B2
3 4
of data elements including at least a first data element FIG . 9 is a flow diagram illustrating a process for autho
configured to store a personal account number, a second data rization of a blockchain transaction based on an identified
element configured to store a merchant identifier, and a third risk value in accordance with exemplary embodiments.
data element configured to store at least a blockchain FIG . 10 is a flow chart illustrating an exemplary method
network identifier. The processing device is configured to : 5 for authorization of a blockchain - based transaction in accor
identify a first account profile stored in the account database dance with exemplary embodiments.
where the included account identifier corresponds to the FIG . 11 is a flow chart illustrating an exemplary method
personal account number stored in the first data element for linking blockchain transactions to privately verified
included in the received transaction message ; and identify a 10 identifies in accordance with exemplary embodiments.
second account profile stored in the account database where FIG . 12 is a flow chart illustrating an exemplary method
the included account identifier corresponds to the merchant for managing fractional reserves of blockchain currency in
accordance with exemplary embodiments .
identifier stored in the second data element included in the
received transaction message . The receiving device is fur forFIG . 13 is a flow chart illustrating an exemplary method
ther configured to receive a transaction notification ,wherein 15 accordance witha blockchain
authorizing
exemplary
transaction using risk values in
embodiments .
the transaction notification indicates a transaction processed FIG . 14 is a block diagram illustrating a computer system
using a blockchain network associated with the blockchain
network identifier stored in the third data element included architecture in accordance with exemplary embodiments .
Further areas of applicability of the present disclosure will
in the received transaction message and includes at least a become apparent from the detailed description provided
transaction identifier and an address identifier associated 20 hereinafter. It should be understood that the detailed descrip
with one of the first account profile and the second account tion of exemplary embodiments are intended for illustration
profile . The processing device is further configured to store purposes only and are , therefore, not intended to necessarily
a linkage between the transaction identifier included in the limit the scope of the disclosure .
received transaction notification and at least one of: the
address identifier, the personal account number, and the 25 DETAILED DESCRIPTION
merchant identifier.
Glossary of Terms
BRIEF DESCRIPTION OF THE DRAWING
FIGURES Payment Network — A system or network used for the
30 transfer of money via the use of cash - substitutes. Payment
The scope of the present disclosure is best understood networks may use a variety of different protocols and
from the following detailed description of exemplary procedures in order to process the transfer of money for
embodiments when read in conjunction with the accompa various types of transactions. Transactions that may be
performed via a payment network may include product or
nying
figuresdrawings
: . Included in the drawings are the following 35 service purchases,credit purchases,debit transactions, fund
FIG . 1 is a block diagram illustrating a high level system transfers
be
, account withdrawals, etc. Payment networks may
configured to perform transactions via cash - substitutes ,
architecture for managing blockchain currency storage and which may include
linkage thereof to privately verified identifies and use transaction accountspayment cards, letters of credit , checks,
, etc. Examples of networks or systems
thereof in the processing of blockchain transactions using 40 configured to perform as payment networks include those
payment networks in accordance with exemplary embodi operated by MasterCard® , VISA® , Discover® , American
ments . Express® , PayPal® , etc. Use of the term “ payment net
FIG . 2 is a block diagram illustrating the processing work ” herein may refer to both the payment network as an
server of FIG . 1 for authorizing blockchain transactions and entity , and the physical payment network , such as the
linking blockchain transactions to privately verified identi- 45 equipment, hardware, and software comprising the payment
fies in accordance with exemplary embodiments. network .
FIG . 3 is a block diagram illustrating the issuer of FIG . 1 Transaction Account - A financial account that may be
for managing fractional reserves of fiat and blockchain used to fund a transaction , such as a checking account,
currency in accordance with exemplary embodiments. savings account, credit account, virtual payment account,
FIG . 4 is a flow diagram illustrating a process for autho- 50 etc. A transaction account may be associated with a con
rizing a blockchain transaction using a transaction message sumer, which may be any suitable type of entity associated
and a payment network in accordance with exemplary with a payment account, which may include a person,
embodiments . family, company, corporation , governmental entity, etc. In
FIG . 5 is a flow diagram illustrating a process for the some instances , a transaction account may be virtual, such as
authorization of a blockchain transaction using the process- 55 those accounts operated by PayPal® , etc.
ing server of FIG . 2 in accordance with exemplary embodi- Blockchain - A public ledger of all transactions of a
ments . blockchain - basedcurrency. One or more computing devices
FIG . 6 is a diagram illustrating the generation of an may comprise a blockchain network, which may be config
invoice for inclusion in a reserve data element of a trans- ured to process and record transactions as part of a block in
action message containing blockchain transaction details in 60 the blockchain . Once a block is completed , the block is
accordance with exemplary embodiments. added to the blockchain and the transaction record thereby
FIG . 7 is a flow diagram illustrating a process for linking updated . In many instances, the blockchain may be a ledger
blockchain transaction data to privately verified identities in of transactions in chronological order, or may be presented
accordance with exemplary embodiments. in any other order that may be suitable for use by the
FIG . 8 is a flow diagram illustrating a process for the 65 blockchain network . In some configurations, transactions
management of fractional reserves of fiat and blockchain recorded in the blockchain may include a destination address
currency in accordance with exemplary embodiments. and a currency amount, such that the blockchain records
US 10,963,881 B2
5 6
how much currency is attributable to a specific address. In more transaction accounts to the payee 104. The acquirer
some instances , additional information may be captured , 114 may be the equivalent of the issuer 112 , but with respect
such as a source address , timestamp, etc. to the payee 104 rather than the payer 102. In some
System for Use of Blockchain Currency in a Payment instances, the issuer 112 and the acquirer 114 may be the
Network 5 same financial institution . For example, the issuer 112 may
FIG . 1 illustrates a system 100 for the managing of provide transaction accounts to both the payer 102 and the
blockchain and fiat currency and use thereof in payment payee 104 .
transactions using a traditional payment network , including The payer 102 may conduct a blockchain transaction with
the linkage of verified identifies to blockchain -based trans- the payee 104. As part of the blockchain transaction, the
actions and assessing of risk in blockchain -based transac- 10 payee 104 may generate a destination address for receipt of
tions . payment of blockchain currency. The destination address
In the system 100 , a blockchain transaction may occur may be generated using an encryption key stored in the
between the computing device of a payer 102 and the computing device of the payee 104. The encryption key may
computing device of a payee 104. As used herein , “ payer ” be part of a key pair, such as a public key corresponding to
may refer to a computing device and / or a consumer that is 15 a private key stored in the computing device . In some
funding a payment transaction , and “ payee” may refer to a instances, the payee 104 may provide the public key to the
computing device and /or a consumer that is receiving pay- payer 102 , and the payer 102 may generate the destination
ment in a payment transaction . The blockchain transaction address . A transaction request may then be submitted by the
may be processed by one or more computing devices that payer 102 for payment of an agreed -upon blockchain cur
comprise a blockchain network 106. The blockchain net- 20 rency amount to the destination address provided by the
work may receive at least a destination address (e.g. , asso- payee 104. In a traditional blockchain transaction , the trans
ciated with the payer 104 ) and an amount of blockchain action request may be submitted by the computing device to
rency and may process the transaction by generating a the blockchain network 106. In the present system 100 , the
block that is added to a blockchain that includes a record for transaction request may be submitted to the processing
the transaction . 25 server 110 of the payment network 108 .
The computing device of the payer 102 may digitally sign The transaction request may be a transaction message and
the transaction request using an encryption key stored in the may be formatted based on one or more standards for the
computing device, such as stored in an electronic wallet. The governance thereof, such as the International Organization
digital signature may be , include , or otherwise be associated for Standardization's ISO 8583 standard. In some instances,
with an address that is generated using the encryption key, 30 the processing server 110 may receive the transaction
which may be associated with blockchain currency in the request and may generate a subsequent transaction message .
blockchain , and may be used to transfer blockchain currency The transaction message may include a plurality of data
to an address associated with the payee 104 and / or their elements, which may be associated with specific usage
computing device. In some embodiments , the address may based on the one or more standards. For example, the data
be encoded using one or more hashing and / or encoding 35 elements may include a data element for the storage of
algorithms, such as the Base58Check encoding algorithm . transaction amount and also include at least one data ele
The generation and use of addresses for the transfer of ment reserved for private use . In the system 100 , the
blockchain currency in blockchain -based transactions using transaction message submitted to the processing server 110
the blockchain network 106 will be apparent to persons may include a data element reserved for private use that
having skill in the relevant art. 40 includes data associated with the desired blockchain trans
The system 100 may also include a payment network 108 . action .
The payment network 108 may be configured to process For instance , the data element reserved for private use
payment transactions using methods and systems that will be may include a network identifier, a transaction amount, and
apparent to persons having skill in the relevant art. In the at least one of: a public key and an address identifier. The
system 100 , the payment network 108 may also include a 45 network identifier may be associated with a blockchain
processing server 110. The processing server 110 , discussed network 106 associated with the blockchain currency being
in more detail below , may be configured to authorize block- transferred in the transaction. The network identifier may be
chain - based transactions using the payment network 108 and used by the processing server 110 to identify the associated
traditional payment rails, may be configured to link block- blockchain network 106 for posting of the eventual block
chain transactions with privately verified identities including 50 chain transaction . In addition , by using different identifiers,
fiat and/ or blockchain transaction accounts, and may be the processing server 110 may be configured to perform the
configured to provide risk and sanction assessments for functions discussed herein for a plurality of different block
blockchain transactions. chain currencies and associated blockchain networks 106 .
The payer 102 may be associated with an issuer 112. The The transaction amount may be an amount of blockchain
issuer 112 , discussed in more detail below, may be a 55 currency being transferred as a result of the transaction . The
computing system of a financial institution , such as an address identifier may be the destination address for the
issuing bank , that issues one or more transaction accounts to blockchain currency, as provided by the payee 104 or
the payer 102. The transaction accounts may include one or generated by the payer 102 using information provided by
more fiat currency transaction accounts , one or more block- the payee 104 (e.g. , their public key ). In instances where the
chain currency transaction accounts, one or more combined 60 data element includes a public key ( e.g. , associated with the
currency transaction accounts , or any combination thereof. payee 104 ) instead of an address identifier, the processing
For example, the payer 102 may have a transaction account server 110 may be configured to generate an address iden
with the issuer 112 for both fiat and blockchain currency, and tifier using the public key. In some instances, the address
an additional fiat currency transaction account. identifier may be encoded using one or more hashing and / or
The payee 104 may be associated with an acquirer 114. 65 encoding algorithms, such as the Base58Check algorithm .
The acquirer 114 may be a computing system of a financial In some embodiments, the transaction message may
institution, such as an acquiring bank , that issues one or include information for multiple payees 104. In such an
US 10,963,881 B2
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embodiment, the data element reserved for private use may third party entity, as discussed in more detail below. In some
include multiple transaction amounts and associated address instances, the payer 102 may decline the use of chargeback
identifiers and / or public keys. In another embodiment, the or payment protection in exchange for a discount offered by
transaction message may include multiple data elements the payee 104 (e.g. , a merchant ), which may be beneficial for
reserved for private use , with each one including a transac- 5 the merchant 104 as a result of reduced fees. In other
tion amount and a different address identifier and / or public instances, the payee 104 may decline the use of risk assess
key associated with a payee 104. In some instances, one of ments and other protections for a transaction .
the payees 104 may be the payer 102. For example, the In some embodiments, the issuer 112 and / or processing
blockchain transaction may include a remainder amount of server 110 may be further configured to store private keys on
blockchain currency to be retained by the payer 102 , and 10 behalf of payers 102 and / or payees 104. In such embodi
may thereby include a transfer from an input address to a ments, the private key may be stored such that the issuer 112
destination address of the payer 102 , as will be apparent to and / or processing server 110 may initiate and digitally sign
persons having skill in the relevant art. blockchain transactions on behalf of a payer 102 such that
In some embodiments , the data element reserved for the payer 102 does not need to retain possession of a
private use , or an alternative data element reserved for 15 computing device for use in blockchain transactions. For
private use in the transaction message , may include input example , the issuer 112 may store the private key on behalf
information associated with the payer 102. The input infor- of the payer 102 and any transaction identifiers associated
mation may include a transaction identifier associated with with the payer 102 ( e.g. , in their blockchain currency
a prior blockchain transaction as well as a public key account) and may be configured to generate the digital
associated with the payer 102 and a digital signature. The 20 signature and include the generated signature and transac
digital signature may be generated using a private key tion identifier in transaction messages for blockchain trans
corresponding to the public key and may be used for actions involving the payer 102 .
verification of ownership of a blockchain currency amount In some embodiments, the processing server 110 may be
associated with the transaction identifier by the payer 102 , further configured to link blockchain transactions with pri
such that the payer 102 is authorized to transfer the block- 25 vately verified identities , such as with the payer 102 , payee
chain currency in the requested transaction . 104 , or transaction accounts associated thereof. For
In some instances, the transaction message may be sub- example , the processing server 110 may store account infor
mitted to the processing server 110 by the payer 102. In other mation for transaction accounts associated with the payer
instances, the payer 102 may provide the transaction infor- 102 ( e.g. , held by the issuer 112 ) and the payee 104 ( e.g. ,
mation to the issuer 112 , which may generate and submit the 30 held by the acquirer 114 ) , which may include address
transaction message to the processing server 110. Once the identifiers. The processing server 110 may then associate
transaction message is received by the processing server blockchain transactions with the stored account information
110 , the processing server 110 may perform additional using the account identifiers included therein and account
functions, such as an assessment of risk or sanctions as identifiers included in data elements in received transaction
discussed in more detail below. A corresponding blockchain 35 messages . The processing server 110 may thereby store
transaction may then be processed using the blockchain historical transaction data for individuals for blockchain
network 106 based on the information included in the data transactions. In instances where an individual may have a
element( s) reserved for private use . In some embodiments, combined fiat and blockchain currency account, the process
the blockchain transaction may be initiated by the process- ing server 110 may, as a result, store transaction history for
ing server 110. In other embodiments, the processing server 40 a consumer's fiat and blockchain transactions.
110 may provide the transaction message or data included The methods and systems discussed herein accordingly
therein to the issuer 112 , which may initiate the blockchain provide for the processing of blockchain transactions using
transaction , such as after evaluating risk for the transaction , transaction messaging and traditional payment networks ,
assessing if the payer 102 has sufficient blockchain currency which may be provide significant benefits to consumers and
for the transaction, and etc., as discussed below. 45 financial institutions that are currently unavailable in block
For instance, as discussed in more detail below, the issuer chain transactions. By using traditional payment rails and
112 may manage fractional reserves of fiat and blockchain transaction messages , which are highly regulated and secure ,
currency, which may include the storage of currencies transaction information may be transmitted at a higher level
associated with the payer 102. The issuer 112 may store a of security than methods currently used in blockchain trans
transaction account of blockchain currency associated with 50 actions . In addition, the storage of private keys in financial
the payer 102 such that, when a transaction is attempted by institutions and / or payment networks may enable consumers
the payer 102 , the issuer 112 may verify the available funds to engage in blockchain transactions without being in con
of the payer 102 prior to initiating the blockchain transac- stant possession of a computing device that stores their
tion, which may be before submitting the transaction mes- private keys. This may reduce the risk of theft of the
sage to the processing server 110 and / or before submitting a 55 consumer's blockchain currency by trusting the data to
transaction request to the blockchain network 106 . financial institutions and payment networks that already
In another example , the issuer 112 may assess a risk for specialize in the storage of sensitive financial information ,
the transaction based on an evaluation provided by the and that are well equipped to transmit and analyze transac
processing server 110 or performed by the issuer 112 , such tion messages .
as based on the payer's available funds, credit history, or 60 In addition , by processing blockchain transactions using
other fraud , sanction, and /or risk considerations that will be payment networks, payment networks may be able to evalu
apparent to persons having skill in the relevant art. In some ate the likelihood of fraud and assess risk for blockchain
embodiments, the acquirer 114 may assess a risk for the transactions using existing fraud and risk algorithms and
transaction prior to processing by the blockchain network information that is available to payment networks, such as
106. For instance , the acquirer 114 may evaluate the reli- 65 historical fiat and blockchain transaction data , credit bureau
ability of the payer 102 , an expectation of fraud, etc. based data , demographic information , etc., that is unavailable for
on data provided by the issuer 112 , processing server 110 , or use in blockchain networks 106. As a result, payers 102 and
US 10,963,881 B2
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payees 104 may engage in blockchain transactions with The processing server 110 may also include a processing
added safeguards against fraud and risk . In addition, the unit 204. The processing unit 204 may be configured to
evaluation of risk may be used by a financial institution to perform the functions of the processing server 110 discussed
provide the consumer with funds or an indication of thereof herein as will be apparent to persons having skill in the
to a payee ( e.g. , a merchant supplying a product to the payer) 5 relevant art. When a transaction request for a blockchain
without waiting for the significantly long processing time of transaction is received by the receiving unit 202 , the pro
traditional blockchain transactions. cessing unit 204 may be configured to identify data included
For example, a consumer may want to use a blockchain in the transaction request and generate a transaction message
currency to pay for a product at a merchant. In a traditional based thereon . The transaction message may be generated
blockchain transaction, the merchant must wait at least ten 10 for compliance with one or more standards, such as the ISO
minutes for the transaction to be verified ( e.g. , and the 8583 standard , and may include a plurality of data elements .
merchant assured of the consumer's ability to pay ) or risk The data elements may include a data element configured to
providing the product and not receiving payment. By using store a transaction amount and a data element reserved for
the methods and systems discussed herein , the merchant's 15 private use . The processing unit 204 may be configured to
acquirer may be able to evaluate the risk of the transaction store a zero value in the data element configured to store a
to determine if the product should be provided prior to transaction amount, and may be configured to store at least
waiting for verification of the blockchain transaction . In a network identifier or encoded value based thereon , an
addition , if a financial institution stores the blockchain address identifier, and a transaction amount in the data
currency for the consumer, the financial institution , a trusted 20 element reserved for private use .
and verified entity, can ensure to the acquirer that the In some embodiments, the processing unit 204 may be
consumer has sufficient funds, so that the merchant can further configured to generate the address identifier. In such
provide the product to the consumer immediately. Further- an embodiment, the processing unit 204 may use a public
more , if the financial institution manages fractional reserves key included in the received transaction request to generate
for the blockchain currency , the financial institution can 25 a destination address. The destination address may be the
immediately update the consumer's available currency address identifier, or, in some instances, the destination
accordingly, such that the consumer can engage in a series address may be encoded using one or more hashing and / or
of transactions without waiting for blockchain network encoding algorithms, such as Base58Check encoding, to
verification . generate the address identifier.
Therefore, the methods and systems discussed herein can 30 The processing server 110 may also include a transmitting
provide for significant improvement over the traditional unit 206. The transmitting unit 206 may be configured to
processing of blockchain transactions via the use of frac- transmit data over one or more networks via one or more
tional reserves , transaction messages , risk evaluation , and network protocols. The transmitting unit 206 may transmit
payment network processing, by increasing consumer secu- data requests to the issuer 112 , acquirer 114 , payer 102 , or
rity, significantly decreasing processing time, and providing 35 other entities. The transmitting unit 206 may also be con
significantly increased defense against fraud. figured to transmit generated transaction messages to finan
Processing Server cial institutions, such as the issuer 112 and the acquirer 114 ,
FIG . 2 illustrates an embodiment of the processing server using the payment network 106. In some embodiments, the
110 of the system 100. It will be apparent to persons having transmitting unit 206 may also transmit blockchain transac
skill in the relevant art that the embodiment of the process- 40 tion requests to blockchain networks 106 based on informa
ing server 110 illustrated in FIG . 2 is provided as illustration tion received by the receiving unit 202 and generated by the
only and may not be exhaustive to all possible configura- processing unit 204 for use in blockchain transactions. For
tions of the processing server 110 suitable for performing the example, the transmitting unit 206 may transmit a transac
functions as discussed herein . For example, the computer tion message to the issuer 112 , which may approve the
system 1400 illustrated in FIG . 14 and discussed in more 45 corresponding blockchain transaction as indicated in an
detail below may be a suitable configuration of the process- approval received by the receiving unit 202. The transmit
ing server 110 . ting unit 206 may then transmit the blockchain transaction to
The processing server 110 may include a receiving unit the blockchain network 106 using methods and systems that
202. The receiving unit 202 may be configured to receive will be apparent to persons having skill in the relevant art.
data over one or more networks via one or more network 50 In some embodiments, the processing server 110 may also
protocols. The receiving unit 202 may be configured to include an account database 208. The account database 208
receive transaction messages from issuers 112 , acquirers may be configured to store a plurality of account profiles
114 , payers 102 , and other entities that are formatted pur- 210. Each account profile 210 may include data related to a
suant to one or more standards for the interchange of consumer (e.g. , the payer 102 , payee 104 , etc. ) or a trans
transaction messages , such as the ISO 8583 standard , and 55 action account associated thereof, including at least an
using communication protocols associated thereby. The account identifier, a fiat currency amount, and one or more
receiving unit 202 may also receive transaction requests blockchain currency amounts. Each blockchain currency
from issuers 112 , acquirers 114 , and / or payers 102. The amount may be associated with a blockchain network 106 .
receiving unit 202 may also be configured to receive account The account identifier may be a unique value associated with
information for transaction accounts, which may include fiat 60 the account profile 210 used for identification thereof, such
currency and blockchain currency accounts, from financial as a transaction account number, wallet identifier, device
institutions, such as the issuer 112 and the acquirer 114. The identifier, username, e - mail address, phone number, etc. In
receiving unit 202 may be further configured to receive any some embodiments , the account identifier may be a private
additional data suitable for performing the functions dis- key. The account profile 210 may also include a plurality of
closed herein , such as data that may be used in the risk 65 associated address identifiers used in blockchain transac
assessment of a blockchain transaction , such as credit bureau tions associated with the related consumer and / or transaction
information, demographic characteristics, etc. account .
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In such an embodiment, the receiving unit 202 may be then store a linkage between the transaction identifier and
further configured to receive a transaction message for a the account identifier included in the account profile 210
blockchain transaction . The transaction message may associated with the address identifier. In some instances, the
include a data element configured to store a personal account linkage may be stored via storage of the transaction identi
number that includes a specific account identifier and a data 5 fier in the corresponding account profile 210 , which may
element reserved for private use that includes at least a thereby be used in future blockchain transactions involving
network identifier and a transaction amount. The processing the associated transaction account. In some instances, the
unit 204 may be configured to identify a specific account transmitting unit 206 may transmit the transaction identifier
profile 210 stored in the account database 208 that includes to a financial institution associated with the linked account,
the specific account identifier. The processing unit 204 may 10 such that the financial institution may store the transaction
be further configured to identify a risk value for the block- identifier for use in future blockchain transactions . In some
chain transaction. The risk value may be based on the cases , the processing unit 204 may store transaction data
transaction amount included in the data element reserved for included in the transaction message in the first and / or second
private use and data included in the identified specific account profiles 210 .
account profile 210 . 15 In some embodiments, the processing server 110 may
For example, the risk value may be based on a correspon- further include a transaction database 212. The transaction
dence between the transaction amount and a blockchain database 212 may be configured to store a plurality of
currency amount of the specific account profile 210 that is transaction data entries 214. Each transaction data entry 214
associated with a blockchain network 106 corresponding to may include data related to a payment transaction, which
the network identifier included in the data element reserved 20 may be a fiat currency transaction or a blockchain currency
for private use . In some instances, the risk value may also be transaction. Each transaction data entry 214 may include a
based on a corresponding amount of fiat currency, such as transaction message , transaction notification , and / or data
based on one or more conversion rates associated with included therein , such as transaction times and / or dates,
conversion of the fiat currency to / from the respective block- transaction identifiers, source addresses, destination
chain currency. 25 addresses, transaction amounts , merchant data , consumer
The processing unit 204 may be further configured to data, product data, loyalty data , reward data , etc. In some
determine authorization of the blockchain transaction based instances, transaction data entries 214 may be stored in an
on the identified risk value . For example, if the processing account profile 210 related to a transaction account involved
unit 204 identifies that the blockchain transaction has a high in the associated payment transaction .
risk value (e.g. , indicating a high likelihood of fraud , sanc- 30 The processing server 110 may also include a memory
tions , inability to pay, etc. ) , the processing unit 204 may 216. The memory 216 may be configured to store data
determine that the transaction should be denied . The pro- suitable for use by the processing server 110 in performing
cessing unit 204 may modify the transaction message to the functions disclosed herein . For example, the memory
include the determination, and the transmitting unit 206 may 216 may store one or more hashing algorithms for encoding
be configured to transmit the transaction message to the 35 address identifiers, one or more rules for the generation of
issuer 112 and / or acquirer 114. The financial institution may address identifiers , blockchain network data, rules and / or
then proceed in the processing of the transaction accordingly algorithms for calculating risk values , fiat and blockchain
based on the determination . As part of the processing , the currency conversion algorithms or data , etc. Additional data
receiving unit 202 may receive an authorization response that may be stored in the memory 216 will be apparent to
from the financial institution, and the transmitting unit 206 40 persons having skill in the relevant art.
may forward the response as a reply to the received trans- Financial Institution
action message , and may also ( e.g. , if the transaction is FIG . 3 illustrates an embodiment of a financial institution
approved ) initiate the blockchain transaction with the block- of the system 100 , such as the issuer 112. It will be apparent
chain network 106 . to persons having skill in the relevant art that the embodi
In some embodiments, the processing unit 204 may be 45 ment of the issuer 112 illustrated in FIG . 3 is provided as
further configured to link blockchain transactions with illustration only and may not be exhaustive to all possible
account profiles 210 stored in the account database 208. In configurations of the issuer 112 suitable for performing the
such an embodiment, transaction messages received by the functions as discussed herein . For example , the computer
receiving unit 202 for blockchain transactions may include system 1400 illustrated in FIG . 14 and discussed in more
at least a first data element configured to store a personal 50 detail below may be a suitable configuration of the issuer
account number, a second data element configured to store 112 .
a merchant identifier, and a third data element, which may be The issuer 112 may include a central database 308. The
reserved for private use , configured to store at least block- central database 308 may be configured to store a plurality
chain network identifier. The processing unit 204 may of central accounts 310. Each central account 310 may be
identify a first account profile 210 where the included 55 associated with a type of currency and may include a
account identifier corresponds to the personal account num- corresponding currency amount. For instance, the issuer 112
ber and a second account profile 210 where the included may include at least a first central account 310 associated
account identifier corresponds to the merchant identifier. with a fiat currency and including a fiat currency amount and
The receiving unit 202 may also receive a transaction a second central account 310 associated with a blockchain
notification indicative of a blockchain transaction processed 60 currency and including a blockchain currency amount.
using a blockchain network 106 associated with the block- The issuer 112 may also include an account database 312 .
chain network identifier included in the third data element of The account database 312 may be configured to store a
the received transaction message . The transaction notifica- plurality of account profiles 314. Each account profile 314
tion may include at least a transaction identifier and an may be configured to store data related to a consumer ( e.g. ,
address identifier. The address identifier may be associated 65 the payer 102 ) or a transaction account including at least a
with the identified first account profile 210 or the identified fiat currency amount, a blockchain currency amount, an
second account profile 210. The processing unit 204 may account identifier, and one or more addresses. Each address
US 10,963,881 B2
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may be associated with the account profile 314 and used as chain currency to support the transaction prior to proceed
a destination address in the transfer of blockchain currency ing . The processing unit 304 may identify a transaction
to the related consumer and /or transaction account. identifier, address, or other identifier for use in providing
The issuer 112 may further include a receiving unit 302 . funding in the blockchain transaction, based on the data
The receiving unit 302 may be configured to receive data 5 stored in the identified account profile 314. The processing
over one or more networks via one or more network proto- unit 304 may also generate a digital signature using the
cols . The receiving unit 302 may receive addresses from private key stored therein . In some instances, the digital
payers 102 , payees 104 , acquirers 114 , processing servers signature may be included in the received transaction
110 , etc. , which may be stored in respective account profiles request.
314. The receiving unit 302 may also be configured to 10 The processing unit 304 may then generate a transaction
receive transaction messages related to payment transac- message . The transaction message may include a data ele
tions . The transaction messages may be formatted pursuant ment reserved for private use that may include the destina
to one or more standards, such as the ISO 8583 standard , and tion address, the network identifier, and the blockchain
may be communicated to the issuer 112 using associated currency amount. The data element, or an alternate data
communication protocols and communication channels, 15 element reserved for private use , may include the digital
such as the payment network 108 and / or associated payment signature and transaction identifier or other identifier. In
rails . The transaction messages may include a plurality of some instances , the transaction message may include a data
data elements , including at least a data element reserved for element configured to store a transaction amount, which
private use that includes a specific address and a transaction may include a zero amount, indicating that the transaction is
amount. 20 not for fiat currency , and is instead a blockchain transaction .
The issuer 112 may also include a processing unit 304 . In some cases , a separate data element may indicate the
The processing unit 304 may be configured to perform the transaction as a blockchain or non - fiat currency transaction .
functions of the issuer 112 discussed herein as will be The issuer 112 may include a transmitting unit 306
apparent to persons having skill in the relevant art. The configured to transmit data over one or more networks via
processing unit 304 may identify a specific account profile 25 one or more network protocols . The transmitting unit 206
314 stored in the account database that includes the address may submit the generated transaction message to the pro
included in the received transaction message . The process- cessing server 110 for processing the blockchain transaction
ing unit 304 may then update the blockchain currency using the methods and systems discussed herein . In some
amount included in the identified account profile 314 based instances, the receiving unit 302 may receive a modified
on the transaction amount included in the data element 30 transaction message from the processing server 110. For
reserved for private use in the received transaction message . example, the processing server 110 may perform risk
The processing unit 304 may also update the blockchain assessment and may modify the transaction message to
currency amount in the central account 310 in the central include an identified risk value and / or an authorization
database 308 associated with the blockchain currency . determination based thereon . The processing unit 304 may
In instances where a transaction account related to an 35 then approve or deny the transaction based on the data
account profile 314 that is stored in the account database 312 included in the modified transaction message using methods
may be used to fund a blockchain transaction , the processing or systems that will be apparent to persons having skill in the
unit 304 may be configured to deduct the transaction amount relevant art. The processing unit 304 may generate an
from the blockchain currency amount in the identified authorization response, which may be submitted, by the
account profile 314. The processing unit 304 may also 40 transmitting unit 306 , to the processing server 110 and
update the blockchain currency amount included in the processed accordingly. For instance, if the authorization
corresponding central account 310 stored in the central response indicates approval , the processing server 110 may
database 308. The processing unit 304 may be further initiate the blockchain transaction at the blockchain network
configured to perform the same functions using fiat curren- 106 and inform the payee 104 of the transaction approval .
cies or additional numbers and/ or types of blockchain cur- 45 The issuer 112 may also include a memory 316. The
rencies. memory 316 may be configured to store data suitable for use
In some embodiments, each account profile 314 may be by the issuer 112 in performing the functions disclosed
further configured to store one or more encryption keys , herein . For example , the memory 316 may be configured to
such as a private and public key pair. In such an embodi- store rules or algorithms for authorizing transactions, for
ment, the processing unit 304 may be configured to generate 50 converting fiat currency to / from blockchain currency , for
addresses using the public key stored in an account profile generating blockchain addresses, for generating digital sig
314 , for use as a destination address in a blockchain trans- natures, etc. Additional data that may be stored in the issuer
action . The processing unit 304 may also be configured to 112 will be apparent to persons having skill in the relevant
provide digital signatures for the transfer of blockchain art.
currency from a specific account profile 314 using the 55 Process for Authorizing a Blockchain Transaction in a
private key included therein . Payment Network
In some embodiments, the issuer 112 may be further FIG . 4 illustrates a process 400 for the authorization of a
configured to initiate blockchain transactions using the pay- blockchain transaction in a traditional payment network
ment network 108. In such an embodiment, the receiving using the system 100 .
unit 302 may receive a transaction request from a payer 102. 60 In step 402 , the processing server 110 of the payment
The transaction request may include at least a destination network 108 may generate a transaction message for a
address (e.g. , associated with the payee 104 ) , a network blockchain transaction . As discussed above , the transaction
identifier, a blockchain currency amount, and an account message may be formatted based on one or more standards
identifier. The processing unit 304 may identify an account and include a plurality of data elements, including at least a
profile 314 that includes the account identifier. In some 65 first data element configured to store a transaction amount
instances, the processing unit 304 may verify that the and a second data element reserved for private use . The first
account profile 314 includes a sufficient amount of block- data element may store a zero amount and the second data
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element may store a blockchain network identifier, a trans- cessing server 110 may store a private key associated with
action amount of blockchain currency, and an address iden- the payer 102 , such as in an account profile 210 in the
tifier associated with a payee 104 . account database 208 .
In step 404 , the transmitting unit 206 of the processing In step 504 , the processing unit 204 of the processing
server 110 may transmit the transaction message to the 5 server 110 may determine if the received transaction request
issuer 112 via the payment network 108. The receiving unit includes an address identifier. If the transaction request does
302 of the issuer 112 may receive the transaction message not include an address identifier, and , for instance, includes
using associated protocols , and, in step 406 , the processing a public key associated with the payee 104 , then , in step 506 ,
unit 304 of the issuer 112 may check for authorization of the the processing unit 204 may generate an address identifier
blockchain transaction . Authorization may be based on , for 10 for the payee 104. In some instances , step 506 may include
example , sufficient funding of the payer 102 , such as based transmitting, by the transmitting unit 206 of the processing
on a stored currency amount, based on a blockchain cur- server, the generated address identifier to the payee 104 .
rency amount associated with a transaction identifier asso- Once the address identifier has been generated and /or
ciated with the payer 102 , etc., or other criteria that will be identified, then , in step 508 , the processing unit 204 may
apparent to persons having skill in the relevant art. The 15 determine if the network identifier included in the received
processing unit 304 may generate an authorization response transaction request is encoded . If the network identifier is
based on the determination , such as an authorization not encoded , then , in step 510 , the processing unit 204 may
response that indicates approval or denial of the transaction . encode the network identifier. The network identifier may be
In step 408 , the transmitting unit 306 of the issuer may encoded by applying the network identifier included in the
transmit the authorization response message to the process- 20 received transaction request to one or more algorithms
ing server 110 via the payment network 108. The receiving configured to generate an encoded value , such as a hexa
unit 202 of the processing server 110 may receive the decimal value .
authorization response , which may be a transaction message Once the network identifier is encoded , in step 512 , the
formatted based on the one or more standards and transmit- processing unit 204 may generate a transaction message .
ted using associated protocols, and, in step 410 , the pro- 25 The transaction message may be formatted based on one or
cessing unit 204 of the processing server 110 may evaluate more standards associated with transaction messages , such
the response code . Evaluation of the response code may as the ISO 8583 standard . The transaction message may
include , for example, checking for approval or denial, include a plurality of data elements . For instance, data
checking for a reference identifier (e.g. , referring to a elements may include a data element configured to store a
corresponding blockchain transaction, such as a transaction 30 transaction amount, which may include a zero amount or
identifier), verifying transaction details, etc. other value indicative of a blockchain transaction, a data
In step 412 , the transmitting unit 206 of the processing element configured to store a personal account number,
server 110 may forward the response message on to the which may include an account identifier associated with the
acquirer 114 via the payment network 108 and protocols payer 102 , a data element configured to store a merchant
associated with the transmission of transaction messages . In 35 identifier, which may include an account identifier associ
step 414 , the issuer 112 may conduct the blockchain trans- ated with the payee 104 (e.g. , which may be the address
action , such as by submitting, using the transmitting unit identifier), and a data element reserved for private use . The
306 , a transaction request to the appropriate blockchain data element reserved for private use may include at least the
network 106 using the details included in the data element encoded network identifier, the address identifier, and the
reserved for private use in the received transaction message . 40 transaction amount of blockchain currency. In some embodi
In some instances , the issuer 112 may receive a transaction ments, the data element reserved for private use , or an
identifier from the blockchain network 106 , and the pro- additional data element reserved for private use , may also
cessing unit 304 may include the transaction identifier in the include payer information, such as a transaction identifier
authorization response message provided to the processing and digital signature associated with the payer 102 to verify
server 110 , such as in a data element configured to store a 45 a source of the blockchain currency used to fund the
reference identifier. In such instances, step 414 may be transaction. In some instances , the transaction message may
performed prior to steps 408 through 412. In step 416 , the also include a message type indicator, which may be indica
acquirer 114 may verify that the blockchain transaction has tive of an authorization message .
occurred , such as by verifying the receipt of blockchain In step 514 , the transmitting unit 206 of the processing
currency, validating the transaction using the transaction 50 server 110 may transmit the transaction message to the
identifier, etc. issuer 112 associated with the payer 102 via the payment
Processing of a Blockchain - Based Transaction Message network 108. The issuer 112 may then authorize and conduct
FIG . 5 illustrates the processing of a transaction message the blockchain transaction using the data included in the
associated with a blockchain transaction in the processing transaction message . In some embodiments, theprocess 500
server 110 of the payment network 108 . 55 may further include receiving, by the receiving unit 202 , an
In step 502 , the receiving unit 202 of the processing server authorization response from the issuer 112 and processing ,
110 may receive a transaction request, such as from the by the processing unit 204 , the transaction accordingly. For
payer 102 or an issuer 112. The transaction request may example , if the authorization response indicates approval of
include at least a network identifier associated with a block- the transaction , the processing unit 204 of the processing
chain network 106 , a transaction amount for a blockchain 60 server 110 may initiate a blockchain transaction with the
currency associated with the blockchain network 106 , and a blockchain network 106 using the associated transaction
public key and / or an address identifier associated with a information.
payee 104. In some embodiments, the transaction request Blockchain Transaction Invoice
may also include a transaction identifier and digital signature FIG . 6 illustrates a process 600 for the generation of an
associated with a private key associated with the payer 102. 65 invoice for a blockchain transaction . An invoice may be a
In other embodiments, the transaction request may include data value , container, element, or other data storage type that
an account identifier, such as in instances where the pro- may include data suitable for use in the initiation and
US 10,963,881 B2
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processing of a blockchain transaction . The invoice , as available sources of blockchain transaction information
discussed herein , may be stored in a data element of a (e.g. , by analysis of the blockchain itself ), such as the issuer
transaction message , such as a data element reserved for 112. For example , the steps of the process 700 as performed
private use based on one or more standards, such as the ISO by the components of the processing server 110 , as discussed
8583 standard . 5 below , may be performed by corresponding components of
As illustrated in FIG . 6 , an invoice may be comprised of the issuer 112 in performing the process 700 by the issuer
a network identifier 602 , a payee public key 604 , and a 112 .
transaction value 606. The network identifier 602 may be In step 702 , the receiving unit 202 of the processing server
associated with a blockchain network 106 used to process 110 may receive a transaction message . The transaction
blockchain transactions of the respective blockchain cur- 10 message may be formatted based on one or more standards,
rency . The network identifier 602 may be , for example, a such as the ISO 8583 standard , and may include a plurality
unique value associated with the blockchain network 106 , of data elements . The data elements may include at least a
such as an alphanumeric name , a numerical value , an first data element configured to store a personal account
internet protocol address , a media access control address , number, a second data element configured to store a mer
etc. The payee public key 604 may be a public key of a key 15 chant identifier, and a third data element configured to store
pair associated with a payee 104 to whom blockchain at least a blockchain network identifier associated with a
currency is to be transferred as a result of the blockchain blockchain network 106. In some embodiments, the data
transaction . The transaction value 606 may be a transaction included in each of the data elements may be included in a
amount of blockchain currency that is to be transferred as a single data element, such as a data element reserved for
result of the blockchain transaction . 20 private use .
The network identifier 602 may be encoded via the use of In step 704 , the processing unit 204 of the processing
one or more encoding algorithms 608 to obtain an encoded server 110 may identify account profiles 210 stored in the
network value 612. The encoded network value 612 may be account database 208 that correspond to entities involved in
a hexadecimal value associated with the blockchain network the associated payment transaction . For example, the pro
106. The encoded network value 612 may be used, for 25 cessing server 110 may identify a first account profile
instance , in the identification of the blockchain network 106 associated with a payer 102 that includes an account iden
to be used to conduct the blockchain transaction . In some tifier included in the first data element configured to store a
instances, the encoded network value 612 may be comprised personal account number, and may identify a second account
of data used in the communication of a transaction request profile associated with a payee 104 that includes an account
to the blockchain network 106 , such as a destination address 30 identifier included in the second data element configured to
( e.g. , an internet protocol address ), or information usable by store a merchant identifier. In some instances, the account
a processing device ( e.g. , of the processing server 110 or identifiers may be address identifiers , such as generated
issuer 112 ) in the identification of a destination address for using public keys of a key pair associated with the respective
the blockchain network 106 , such as by using a lookup table . entity.
The payee public key 604 may be used to generate a payee 35 In step 706 , the processing unit 204 may determine if a
address 614 via the use of one or more hashing algorithms fraud score for the corresponding payment transaction is
610. The payee address 614 may be a unique value associ- requested. For instance , a fraud score may be requested by
ated with the payee 104 and may be used as a destination an issuer 112 associated with the payer 102 or an acquirer
address for currency being transferred in a subsequent 114 associated with the payee 104 , such as in instances
blockchain transaction . The hashing algorithms 610 may, in 40 where the transaction message is received by the processing
some embodiments, additionally and / or alternatively use server 110 prior to processing of the corresponding block
encoding, such as Base58Check encoding, to generate a chain transaction . If a fraud score is not requested , the
payee address 614 that is a string of alphanumeric characters process 700 may proceed to step 712. If a fraud score is
that consists of only characters that are easily distinguished . requested , then , in step 708 , the processing unit 204 may
The encoded network value 612 , payee address 614 , and 45 apply fraud rules (e.g. , as stored in the memory 216 ) to data
transaction value 606 may be combined (e.g. , in a string of included in the received transaction message , and, in some
characters , in an array of values , or other suitable type of instances, the identified account profiles, to generate a fraud
data storage ) in a transaction message data element 616. The score . In step 710 , the transmitting unit 206 of the processing
data element 616 may be , for example, a data element server 110 may transmit the fraud score to the appropriate
reserved for private use in the one or more standards on 50 entity, such as the issuer 112 and /or the acquirer 114 .
which transaction messages are based , such as the ISO 8583 In step 712 , the processing unit 204 may determine if a
standard . The invoice may be included in the data element blockchain transaction associated with the received transac
616 , which may be included in a transaction message and tion message occurred . The determination may either be : ( 1 )
used to initiate a blockchain transaction to be carried out by based on the receipt of a transaction notification from the
the blockchain network 106 associated with the network 55 blockchain network 106 or from an entity configured to
identifier 602 , to pay the transaction value 606 to a payee initiate the blockchain transaction ( e.g. , the issuer 112 ) ; (2 )
104 associated with the generated payee address 614 . inherent to the processing server 110 in instances where the
Process for Linking Blockchain Transactions to Verified processing server 110 initiates the blockchain transaction ; or
Identities (3 ) based on verification of the blockchain transaction by
FIG . 7 illustrates a process 700 for the linking of block- 60 analysis of the blockchain itself (e.g. , using the payee
chain transactions to privately verified identities using the address, transaction amount, and other information included
processing server 110 of the payment network 108. It will be in the transaction message ) . If the blockchain transaction did
apparent to persons having skill in the relevant art that the not occur, then the process 700 may be completed , as no
process 700 illustrated in FIG . 7 and discussed herein may linkage may be necessary.
be performed by any entity configured to receive and 65 If the blockchain transaction did occur, then , in step 714 ,
analyze transaction messages and receiving and verify the receiving unit 202 of the processing server 110 may
blockchain transactions using privately and/or publicly receive a transaction notification associated with the block
US 10,963,881 B2
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chain transaction . The transaction notification may be pro data elements included in the received transaction message .
vided by, for example, the blockchain network 106 , the In instances where multiple involved account profiles 314
issuer 112 , the acquirer 114 , the payer 102 , the payee 104 , may be identified , the remaining steps of the process 800
or an entity configured to verify blockchain transactions may be performed for each of the identified account profiles
using the blockchain , such as the payment network 108 ( e.g. , 5 314 .
using the processing unit 204 ) or a third party . The trans In step 806 , the processing unit 304 may identify if the
action notification may include at least a transaction iden identified account profile 314 corresponds to a payer 102 or
tifier and an address identifier. The transaction identifier may payee 104 for the transaction . The determination may be
be a unique value associated with the blockchain transac based on the data element in which the associated address is
tion . The address identifier may include an address associ- 10 stored , a location within the data element ( e.g. , in the invoice
ated with the payee 104. In some instances, the transaction stored therein ), a source of the transaction message , or other
notificationmay also include a payer address associated with
the payer 102 , and any additional information , such as a suitable If the
value .
account profile 314 is associated with a payee 104
transaction amount. In some cases , the processing unit 204
may identify such information from the received transaction 15 mayfor thedetermine
transaction , then , in step 808 , the processing unit 304
if fiat currency is involved in the transaction.
message .
In step 716 , the processing unit 204 may identify any The determination may be based on data elements included
applicable linkages based on the information included in the in the received transaction message . For example, if fiat
received transaction notification . For instance, the process- currency is involved , each data element included in the
ing unit 204 may identify a linkage between the blockchain 20 transaction message may include data as specified based on
transaction and the second account profile identified in step the one or more standards, including a transaction amount
704 associated with the payee 104 of the transaction based having a non - zero value . In another example, if fiat currency
on a correspondence with the included account and / or is not involved , a data element configured to store a trans
address identifier and the address identifier included in the action amount may have a zero amount, a data element
received transaction notification . In instances where the 25 reserved for private use may include a blockchain transac
transaction notification may include a payer address, the tion invoice, and / or an additional data element may include
processing unit 204 may identify a linkage between the first data indicating that the transaction is a blockchain or oth
account profile identified in step 704 and the blockchain erwise non - fiat transaction .
transaction using the payer address . If the transaction involves the use of fiat currency , then, in
In step 718 , the processing unit 204 may storage linkage 30 step 810 , the processing unit 304 may add fiat currency to a
data in the processing server 110. For example, the linkage fiat currency amount in the corresponding account profile
data may be stored as a linkage between each applicable 314. The currency amount added may be based on an
account profile and the transaction identifier in the memory amount included in a data element configured to store a
216 , may be stored in a transaction data entry 214 in the transaction amount in the received transaction message . In
transaction database 212 associated with the blockchain 35 step 812 , a fiat currency amount in a central account 310
transaction (e.g. , as account identifiers for linked account associated with the fiat currency stored in the central data
profiles 210 ) , or may be stored in account profiles 210 that base 308 may be updated ( e.g. , increased ) by the same or a
are identified as linked to the transaction , such as by storage related ( e.g. , due to a fee ) currency amount.
of the transaction identifier for the linked transaction in the If the transaction does not involve the use of a fiat
account profile 210. In some instances , storage of linkage 40 currency , then , in step 814 , the processing unit 304 may add
data may include transmitting, by the transmitting unit 206 , blockchain currency to a blockchain currency amount in the
linkage data to an external entity for storage , such as to the corresponding account profile 314. The currency amount
issuer 112 for storage in an account profile 314 for use in added may be based on an amount included in a data element
future blockchain transactions. reserved for private use in the received transaction message ,
Process for Management of Fractional Reserves 45 or as included in a transaction notification associated with
FIG . 8 illustrates a process 800 for the management of the corresponding blockchain transaction , such as via analy
fractional reserves of fiat and blockchain currency in an sis of the blockchain . In step 816 , a blockchain currency
issuer 112 or other financial institution configured to issue amount in a central account 310 associated with the block
transaction accounts using a combination of fiat and one or chain currency may be updated (e.g. , increased ) by the same
more blockchain currencies . 50 or a related (e.g. , due to a fee ) currency amount.
In step 802 , the receiving unit 302 of the issuer 112 may If, in step 806 , the processing unit 304 determines that the
receive a transaction message . The transaction message may involved account profile 314 corresponds to a payer 102 for
be associated with a payment transaction and may be the transaction, then , in step 818 , the processing unit 304
formatted based on one or more standards, such as the ISO may determine if fiat currency is involved in the transaction.
8583 , and received using associated communication proto- 55 Similar to the determination made in step 808 for a payee
cols . The transaction message may include a plurality of data 104 , the determination may be based on data elements
elements, including at least a data element reserved for included in the received transaction message . If the trans
private use that includes at least a specific address associated action involves fiat currency, then , in step 820 , fiat currency
with an entity involved in the related transaction and a may be deducted from the account profile 314 based on a
transaction amount. In some instances, the data element 60 currency amount. In step 822 , fiat currency may be deducted
reserved for private use , or another data element in addition from the fiat currency central account 310 of the central
thereto , may include additional addresses. database 308 , based on a currency amount ( e.g. , with an
In step 804 , the processing unit 304 of the issuer 112 may additional fee removed ). If the transaction involves block
identify account profiles 314 stored in the account database chain currency , then the account profile 314 and a block
312 involved in the related payment transaction . The 65 chain currency central account 310 may both be updated via
account profiles 314 may be identified based on addresses deductions of blockchain currency based on a currency
included therein that correspond to addresses included in amount.
US 10,963,881 B2
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Process for Authorization of Blockchain - Based Transactions amount, then the process 900 may proceed to step 908 where
Based on Risk a risk value is determined . In some instances, the risk value
FIG . 9 illustrates a process 900 for the authorization of may be affected by the availability of each specific type of
blockchain transactions based on risk using the processing currency. For instance, if the payer 102 has insufficient
server 110 of the payment network 108. It will be apparent 5 blockchain currency , but a sufficient equivalent amount of
to persons having skill in the relevant art that the process 900 fiat currency , the risk value may indicate a higher risk than
illustrated in FIG.9 and discussed herein may be performed a sufficient amount of blockchain currency in the same
by any entity configured to receive and analyze transaction proportion . Risk values based on availability of blockchain
messages and determine risk , such as the issuer 112. For and fiat currency may be similar to risk values based on
example, the steps of the process 900 as performed by the 10 availability of multiple types of currency in traditional
components of the processing server 110 , as discussed transactions where multiple fiat currencies may be involved .
below , may be performed by corresponding components of In step 918 , the processing unit 204 may determine if the
the issuer 112 in performing the process 900 by the issuer risk value that is determined is an acceptable level. The
112 . acceptance of a risk value may be based on criteria set forth
In step 902 , the receiving unit 202 of the processing server 15 by the issuer 112 associated with the payer 102 , by the payer
110 may receive a transaction message . The transaction 102 , by the payment network 108 , by a payee 104 involved
message may be formatted based on one or more standards, in the transaction, by an acquirer 114 associated with the
such as the ISO 8583 standard , and may include a plurality payee 104 , or by a combination thereof. If the risk value is
of data elements . The data elements may include a first data not acceptable, then , in step 920 , the processing unit 204
element configured to store a personal account number that 20 may decline the payment transaction due to the high risk .
includes a specific account identifier and a second data The declining of the transaction may include modifying the
element reserved for private use that includes at least a transaction message to indicate that the transaction is
blockchain network identifier and a transaction amount. In declined, such as by modification of a message type indi
step 904 , the processing unit 204 of the processing server cator and /or one or more data elements . In some instances,
110 may identify an account profile 210 associated with a 25 the modification may include an indication of the reason for
payer 102 involved in the payment transaction . The account denial, such as , in this case , the high risk . In step 924 , the
profile 210 may be identified based on a correspondence transmitting unit 206 may transmit the modified transaction
between the included account identifier and the specific message as an authorization response to the received trans
account identifier included in the data element configured to action message via the payment network 108 .
store a personal account number. 30 If, in step 918 , the processing unit 204 determines that the
In step 906 , the processing unit 204 may determine if the risk value is acceptable , then, in step 922 , the transaction
identified account profile 210 includes sufficient blockchain may be authorized . Authorization of the transaction may
currency fund the blockchain transaction . If the account include modifying the transaction message to indicate
includes sufficient currency , then , in step 908 , a risk value approval of the transaction, such as by modification of a
for the transaction may be determined based on the suffi- 35 message type indicator and / or one or more data elements . In
ciency of currency. In some instances, the risk value may be step 924 , the modified transaction message may be trans
based on a difference in the available currency ( e.g. , as mitted via the payment network 108. In some instances, a
indicated in the account profile 210 ) and the transaction transaction message for a denied transaction may be trans
amount. For example, there may be a higher risk indicated mitted to the payer 102 and / or payee 104 , while a transaction
if the transaction is barely covered such that a concurrent 40 message for an approved transaction may be transmitted to
transaction could result in the payer 102 being unable to the issuer 112 or other entity for further authorization .
afford the amount. Exemplary Method for Authorizing a Blockchain- Based
If, in step 906 , the processing unit 204 determines that Transaction
there is not sufficient blockchain currency in the account FIG . 10 illustrates a method 1000 for authorizing a
profile 210 , then , in step 910 , the processing unit 204 may 45 blockchain -based transaction using a transaction message
calculate an equivalent amount of fiat currency. The calcu- generated by and transmitted via a payment network 108 .
lation may use one or more conversion rates , such as may be In step 1002 , a transaction request may be received by a
stored in the memory 216 , or retrieved via use of the receiving device ( e.g. , the receiving unit 202 ) , wherein the
transmitting unit 206 and receiving unit 202 , such as by transaction request includes at least a network identifier
requesting a conversion rate from the blockchain network 50 associated with a blockchain network ( e.g. , the blockchain
106 , a financial institution , or other third party . In step 912 , network 106 ) , a transaction amount, and one of: a public key
the processing unit 204 may determine if the identified and an address identifier. In step 1004 , an address identifier
account profile 210 includes a sufficient amount of fiat may be generated by a processing device (e.g. , the process
currency to cover the equivalent amount for the transaction . ing unit 204 ) using at least the public key included in the
If the processing unit 204 determines that the account 55 received transaction request and one or more hashing and / or
does not include a sufficient amount of blockchain or fiat encoding algorithms if the received transaction request does
currency, then , in step 914 , the processing unit 204 may not include an address identifier. In one embodiment, the one
decline the payment transaction due to insufficient funds . or more hashing and / or encoding algorithms includes the use
The decline of the payment transaction may include modi- of Base58Check encoding.
fying the transaction message to indicate that the transaction 60 In step 1006 , a transaction message may be generated by
is declined , such as by modification of a message type the processing device , wherein the transaction message is
indicator and / or one or more data elements. In step 916 , the formatted based on one or more standards and includes a
transmitting unit 206 may transmit the modified transaction plurality of data elements, including at least a first data
message as an authorization response to the received trans- element configured to store a transaction amount and a
action message. 65 second data element reserved for private use , and the first
If the processing unit 204 determines, in step 912 , that data element includes a zero value and the second data
there is sufficient fiat currency to cover the transaction element includes at least ( i ) the network identifier or an
US 10,963,881 B2
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encoded value based on the network identifier, (ii ) the the processing device 204 where the included account
address identifier, and (iii ) the transaction amount. In one identifier corresponds to the merchant identifier stored in the
embodiment, the one or more standards may include at least second data element included in the received transaction
the ISO 8583 standard . In some embodiments, the transac- message .
tion message may include a message type indicator indica- 5 In step 1110 , a transaction notification may be received by
tive of an authorization message . In one embodiment, the the receiving device 202 , wherein the transaction notifica
encoded value based on the network identifier is a hexa- tion indicates a transaction processed using a blockchain
decimal value generated using at least the network identifier network (e.g. , the blockchain network 106 ) associated with
and one or more algorithms. In some embodiments, the the blockchain network identifier stored in the third data
transaction message may include a third data element con- 10 element included in the received transaction message and
figured to store a processing code indicative of a non- includes at least a transaction identifier and an address
currency transaction. identifier associated with one of the first account profile 210
In step 1008 , the transaction message may be transmitted and the second account profile 210. In one embodiment, the
by a transmitting device ( e.g. , the transmitting unit 206 ) to address identifier may be a hash generated using a public key
a financial institution ( e.g. , the issuer 112 ) using a payment 15 associated with one of the first account profile 210 and the
network (e.g. , the payment network 108 ) . In one embodi- second account profile 210 .
ment, the method 1000 may further include receiving , by the In step 1112 , a linkage between the transaction identifier
receiving device 202 , a return transaction message from the included in the received transaction notification and at least
financial institution 112 using the payment network 108 , one of: the address identifier, the personal account number,
wherein the return transaction message includes a third data 20 and the merchant identifier may be stored by the processing
element configured to store a response code . In a further device 204. In one embodiment, the linkage may be stored
embodiment, the method 1000 may even further include in a transaction database ( e.g. , the transaction database 212 ) ,
transmitting, by the transmitting device 206 , the return as a linkage profile, the linkage profile including at least the
transaction message in response to the received transaction transaction identifier and the at least one of: the address
request. In another further embodiment, the response code 25 identifier, the personal account number, and the merchant
may be indicative of approval of the transaction associated identifier. In some embodiments, the linkage may be stored
with the generated transaction message , and the second data in the first account profile 210. In one embodiment, the
element may further include a reference identifier. In an even linkage may be stored in the second account profile 210 .
further embodiment, the reference identifier may be at least Exemplary Method for Managing Fractional Reserves of
one of: a value associated with a transaction conducted using 30 Blockchain Currency
the associated blockchain network 106 and a digital signa- FIG . 12 illustrates a method 1200 for the management of
ture generated based on at least a portion of the data included fractional reserves of blockchain and fiat currency for use by
in the second data element included in the generated trans- a financial institution in a payment network .
action message. In step 1202 , at least a fiat amount associated with a fiat
Exemplary Method for Linking Blockchain Transactions to 35 currency may be stored in a first central account (e.g. , central
Private Verified Identities account 310 ) . In step 1204 , at least a blockchain amount
FIG . 11 illustrates a method 1100 for the linking of associated with a blockchain currency may be stored in a
blockchain transactions to privately verified identities based second central account 310. In step 1206 , a plurality of
on the use of standardized transaction messages and data account profiles (e.g. , account profiles 314 ) may be stored in
elements included therein . 40 an account database (e.g. , the account database 312 ) ,
In step 1102 , a plurality of account profiles (e.g. , account wherein each account profile 314 may include data associ
profiles 210 ) may be stored in an account database ( e.g. , the ated with a consumer (e.g. , the payer 102 , payee 104 , a
account database 208 ) , wherein each account profile 210 transaction account, etc.) including at least a fiat currency
includes data related to a transaction account including at amount, a blockchain currency amount, an account identi
least an account identifier and account data . In one embodi- 45 fier, and an address. In one embodiment, the blockchain
ment, the account data may include at least one of: trans- amount stored in the second central account 310 is based on
action data , location data , characteristic data , and fraud data . a sum of the blockchain currency amounts included in each
In step 1104 , a transaction message may be received by a account profile 314 stored in the account database 312 .
receiving device (e.g. , the receiving unit 202 ) , wherein the In step 1208 , a transaction message associated with a
transaction message is formatted based on one or more 50 payment transaction may be received by a receiving device
standards and includes a plurality of data elements including (e.g. , the receiving unit 302 ) , wherein the transaction mes
at least a first data element configured to store a personal sage is formatted based on one or more standards and
account number, a second data element configured to store includes a plurality of data elements, including at least a data
a merchant identifier, and a third data element configured to element reserved for private use including a specific address
store a blockchain network identifier. In one embodiment, 55 and a transaction amount. In one embodiment, the one or
the transaction message may include a fourth data element more standards may include at least the ISO 8583 standard .
configured to store a processing code indicative of a non- In step 1210 , a specific account profile 314 stored in the
currency transaction . In some embodiments, the transaction account database 312 may be identified by a processing
message may include a message type indicator indicative of device ( e.g. , the processing unit 304 ) where the included
an authorization message. 60 address corresponds to the specific address included in the
In step 1106 , a first account profile 210 stored in the data element in the received transaction message .
account database 208 may be identified by a processing In step 1212 , the blockchain currency amount included in
device (e.g. , the processing unit 204 ) where the included the identified specific account profile 314 may be updated by
account identifier corresponds to the personal account num- the processing device 304 based on the transaction amount
ber stored in the first data element included in the received 65 included in the data element in the received transaction
transaction message . In step 1108 , a second account profile message . In one embodiment, the method 1200 may further
210 stored in the account database 208 may be identified by include updating, by the processing device 304 , the block
US 10,963,881 B2
25 26
chain amount stored in the second central account 310 based transaction , wherein the risk value is based on at least the
on the transaction amount included in the data element in the transaction amount included in the second data element of
received transaction amount. In some embodiments , the the received transaction message and at least one of: the fiat
method 1200 may also include initiating, by the processing currency amount and a blockchain currency amount asso
device 304 , a blockchain transaction using a blockchain 5 ciated with a blockchain network 106 corresponding to the
network (e.g. , the blockchain network 106 ) associated with network identifier included in the second data element of the
the blockchain currency amount, wherein the blockchain received transaction message included in the identified spe
transaction is for the transaction amount to or from the cific account profile 210 .
specific address In one embodiment, the transaction amount may be an
In one embodiment, the second central account 310 is 10 amount of blockchain currency and identifying a risk value
further configured to store a plurality of keys , each key for
associated with an account profile 314 stored in the account amount includedtransaction
the payment
in the
may be based on the transaction
second data element of the received
database 312. In a further embodiment, the method 1200
may further include generating, by the processing device transaction message and the blockchain currency amount
304, the address stored in each account profile 314 of the 15 associated with a blockchain network 106 corresponding to
the network identifier included in the second data element of
account database 312 based on application of the associated the received transaction message included in the identified
key to one or more hashing and / or encoding algorithms. In
an even further embodiment, the one or more hashing and /or specific account profile. In some embodiments, the transac
encoding algorithms may include the use of Base58Check tion amount may be an amount of blockchain currency and
encoding 20 identifying a risk value for the payment transaction may be
In one embodiment, the transaction message may further based on the transaction amount included in the second data
include a data element configured to store a personal account element of the received transaction message , the fiat cur
number that includes a funding address. In a further embodi- rency amount included in the identified specific account
ment, the method 1200 may also include : identifying, by the profile, and an exchange rate for exchange of blockchain
processing device 304 , a funding account profile 314 stored 25 currency to and /or from fiat currency.
in the account database 312 where the included address In step 1310 , authorization of the payment transaction
corresponds to the funding address; and deducting, by the may be determined by the processing device 204 based on
processing device 304 , the blockchain currency amount at least the identified risk value . In step 1312 , the received
included in the identified funding account profile 314 based transaction message may be modified by the processing
on the transaction amount included in the data element in the 30 device 204 based on the authorization determination . In one
received transaction message , wherein updating the block- embodiment, modifying the received transaction message
chain currency amount included in the identified specific may include storing, in a third data element of the transac
account profile 314 includes adding to the blockchain cur- tion message , a response code indicative of the authorization
rency amount based on the transaction amount included in determination . In step 1314 , a transmitting device ( e.g. , the
the data element in the received transaction message . 35 transmitting unit 206 ) may transmit the modified transaction
Exemplary Method for Authorizing a Blockchain Transac- message .
tion Using Risk Values In one embodiment, the method 1300 may further
FIG . 13 illustrates a method 1100 for the authorization of include : generating, by the processing device 204 , an
blockchain transactions in a payment network using risk address identifier for each account profile 210 using at least
values based on available blockchain and/or fiat currency . 40 the account identifier included in the respective account
In step 1302 , a plurality of account profiles ( e.g. , account profile 210 and one or more hashing and /or encoding
profiles 210 ) may be stored in an account database ( e.g. , the algorithms. In a further embodiment, the specific account
account database 208 ) , wherein each account profile 210 identifier may have a value equivalent to the address iden
includes data related to a consumer (e.g. , the payer 102 , tifier generated using the account identifier included in the
payee 104 , a transaction account, etc.) including at least an 45 identified specific account profile 210. In another further
account identifier, a fiat currency amount, and one or more embodiment, the one or more hashing and / or encoding
blockchain currency amounts, each blockchain currency algorithms may include the use of Base58Check encoding.
amount being associated with a blockchain network ( e.g. , In some embodiments, the method 1300 may also include
the blockchain network 106 ) . initiating, by the processing device 204 , a blockchain trans
In step 1304 , a transaction message for a payment trans- 50 action using the blockchain network 106 corresponding to
action may be received by a receiving device ( e.g. , the the network identifier included in the second data element of
receiving unit 202 ) , wherein the transaction message is the received transaction message for the transaction amount
formatted based on one or more standards and includes a from the specific account identifier. In a further embodiment,
plurality of data elements, including a first data element modifying the received transaction message may further
configured to store a personal account number that includes 55 include adding, to the second data element, a reference
a specific account identifier and a second data element identifier generated as a result of initiating the blockchain
reserved for private use that includes at least a network transaction .
identifier and a transaction amount. In one embodiment, the Computer System Architecture
one or more standards may include at least the ISO 8583 FIG . 14 illustrates a computer system 1400 in which
standard . 60 embodiments of the present disclosure, or portions thereof,
In step 1306 , a specific account profile 210 stored in the may be implemented as computer -readable code . For
account database 208 may be identified by a processing example , the processing server 110 and issuer 112 of FIG . 1
device (e.g. , the processing unit 204 ) where the included may be implemented in the computer system 1400 using
account identifier corresponds to the specific account iden- hardware, software, firmware, non -transitory computer
tifier included in the first data element of the received 65 readable media having instructions stored thereon , or a
transaction message . In step 1308 , a risk value may be combination thereof and may be implemented in one or
identified by the processing device 204 for the payment more computer systems or other processing systems . Hard
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ware , software, or any combination thereof may embody In some embodiments , the secondary memory 1410 may
modules and components used to implement the methods of include alternative means for allowing computer programs
FIGS . 4 , 5 , and 7-13 . or other instructions to be loaded into the computer system
If programmable logic is used , such logic may execute on 1400 , for example, the removable storage unit 1422 and an
a commercially available processing platform or a special 5 interface 1420. Examples of such means may include a
purpose device . A person having ordinary skill in the art may program cartridge and cartridge interface (e.g. , as found in
appreciate that embodiments of the disclosed subject matter video game systems ) , a removable memory chip ( e.g. ,
can be practiced with various computer system configura- EEPROM , PROM , etc.) and associated socket, and other
tions , including multi - core multiprocessor systems, mini- 10 removable storage units 1422 and interfaces 1420 as will be
computers , mainframe computers, computers linked or clus- apparent to persons having skill in the relevant art.
tered with distributed functions, as well as pervasive or Data stored in the computer system 1400 ( e.g. , in the main
miniature computers that may be embedded into virtually memory 1408 and / or the secondary memory 1410 ) may be
any device . For instance , at least one processor device and stored on any type of suitable computer readable media ,
a memory may be used to implement the above described 15 such as optical storage (e.g. , a compact disc , digital versatile
embodiments . disc , Blu -ray disc , etc. ) or magnetic tape storage (e.g. , a hard
A processor unit or device as discussed herein may be a disk drive ). The data may be configured in any type of
single processor, a plurality of processors, or combinations suitable database configuration, such as a relational data
thereof. Processor devices may have one or more processor base , a structured query language ( SQL ) database , a distrib
“ cores.” The terms “ computer program medium ,” “ non- 20 uted database, an object database , a distributed key -value
transitory computer readable medium ,” and “ computer store , etc. Suitable configurations and storage types will be
usable medium " as discussed herein are used to generally apparent to persons having skill in the relevant art.
refer to tangible media such as a removable storage unit The computer system 1400 may also include a commu
1418 , a removable storage unit 1422 , and a hard disk nications interface 1424. The communications interface
installed in hard disk drive 1412 . 25 1424 may be configured to allow software and data to be
Various embodiments of the present disclosure are transferred between the computer system 1400 and external
described in terms of this example computer system 1400 . devices . Exemplary communications interfaces 1424 may
After reading this description, it will become apparent to a include a modem , a network interface (e.g. , an Ethernet
person skilled in the relevant art how to implement the card ), a communications port, a PCMCIA slot and card , etc.
present disclosure using other computer systems and / or 30 Software and data transferred via the communications inter
computer architectures . Although operations may be face 1424 may be in the form of signals, which may be
described as a sequential process, some of the operations electronic, electromagnetic, optical , or other signals as will
may in fact be performed in parallel, concurrently, and / or in be apparent to persons having skill in the relevant art. The
a distributed environment, and with program code stored signals may travel via a communications path 1426 , which
locally or remotely for access by single or multi -processor 35 may be configured to carry the signals and may be imple
machines. In addition, in some embodiments the order of mented using wire, cable , fiber optics , a phone line , a
operations may be rearranged without departing from the cellular phone link , a radio frequency link , etc.
spirit of the disclosed subject matter. The computer system 1400 may further include a display
Processor device 1404 may be a special purpose or a interface 1402. The display interface 1402 may be config
general purpose processor device . The processor device 40 ured to allow data to be transferred between the computer
1404 may be connected to a communications infrastructure system 1400 and external display 1430. Exemplary display
1406 , such as a bus , message queue , network , multi- core interfaces 1402 may include high - definition multimedia
message -passing scheme , etc. The network may be any interface ( HDMI ) , digital visual interface ( DVI ) , video
network suitable for performing the functions as disclosed graphics array ( VGA ), etc. The display 1430 may be any
herein and may include a local area network (LAN ), a wide 45 suitable type of display for displaying data transmitted via
area network (WAN ), a wireless network (e.g. , WiFi), a the display interface 1402 of the computer system 1400 ,
mobile communication network , a satellite network , the including a cathode ray tube ( CRT) display, liquid crystal
Internet, fiber optic , coaxial cable, infrared , radio frequency display ( LCD ) , light-emitting diode ( LED ) display , capaci
( RF ) , or any combination thereof. Other suitable network tive touch display, thin - film transistor (TFT ) display, etc.
types and configurations will be apparent to persons having 50 Computer program medium and computer usable medium
skill in the relevant art. The computer system 1400 may also may refer to memories, such as the main memory 1408 and
include a main memory 1408 (e.g. , random access memory, secondary memory 1410 , which may be memory semicon
read -only memory, etc. ) , and may also include a secondary ductors (e.g. , DRAMs, etc. ) . These computer program prod
memory 1410. The secondary memory 1410 may include the ucts may be means for providing software to the computer
hard disk drive 1412 and a removable storage drive 1414 , 55 system 1400. Computer programs (e.g. , computer control
such as a floppy disk drive , a magnetic tape drive , an optical logic ) may be stored in the main memory 1408 and / or the
disk drive, a flash memory, etc. secondary memory 1410. Computer programs may also be
The removable storage drive 1414 may read from and / or received via the communications interface 1424. Such com
write to the removable storage unit 1418 in a well- known puter programs, when executed, may enable computer sys
manner . The removable storage unit 1418 may include a 60 tem 1400 to implement the present methods as discussed
removable storage media that may be read by and written to herein . In particular, the computer programs, when
by the removable storage drive 1414. For example, if the executed , may enable processor device 1404 to implement
removable storage drive 1414 is a floppy disk drive or the methods illustrated by FIGS . 4 , 5 , and 7-13 , as discussed
universal serial bus port, the removable storage unit 1418 herein . Accordingly, such computer programs may represent
may be a floppy disk or portable flash drive, respectively. In 65 controllers of the computer system 1400. Where the present
one embodiment, the removable storage unit 1418 may be disclosure is implemented using software , the software may
non - transitory computer readable recording media . be stored in a computer program product and loaded into the
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computer system 1400 using the removable storage drive including at least the transaction identifier and the at least
1414 , interface 1420 , and hard disk drive 1412 , or commu- one of: the address identifier, the personal account number,
nications interface 1424 . and the merchant identifier.
Techniques consistent with the present disclosure provide, 3. The method of claim 1 , wherein the linkage is stored in
among other features, systems and methods for authorizing 5 the first account profile.
blockchain transactions , identifying risk values in block 4. The method of claim 1 , wherein the linkage is stored in
chain transactions, and linking blockchain transactions with the second account profile.
verified identities. While various exemplary embodiments of
the disclosed system and method have been described above sage5. The method of claim 1 , wherein the transaction mes
includes a fifth data element configured to store a
it should be understood that they have been presented for 10
purposes of example only, not limitations . It is not exhaus processing code indicative of a non - currency transaction .
tive and does not limit the disclosure to the precise form is a6. hash The method of claim 1 , wherein the address identifier
disclosed . Modifications and variations are possible in light of the firstgenerated
account
using a public key associated with one
profile and the second account profile .
of the above teachings or may be acquired from practicing 7. The method of claim 1 , wherein the transaction mes
of the disclosure, without departing from the breadth or 15 sage includes a message type indicator indicative of an
scope .
What is claimed is : authorization message .
1. A method for linking blockchain transactions to pri 8. The method of claim 1 , wherein the account data
vately verified identities, comprising: includes at least one of: transaction data , location data ,
storing , in an account database of a computer system , a 20 characteristic data , and fraud data .
plurality of account profiles, wherein each account 9. A system for linking blockchain transactions to pri
profile includes data related to a transaction account vately verified identities, comprising:
including at least an account identifier and account an account database of a computer system configured to
data ; store a plurality of account profiles, wherein each
receiving, by a receiver of the computer system , a trans- 25 account profile includes data related to a transaction
action message via a payment network , wherein the account including at least an account identifier and
transaction message is formatted based on one or more account data ;
standards and includes a plurality of data elements a receiver of the computer system configured to receive a
including at least a first data element configured to store transaction message via a payment network, wherein
a personal account number, a second data element 30 the transaction message is formatted based on one or
configured to store a merchant identifier, and a third more standards and includes a plurality of data ele
data element configured to store at least a blockchain ments including at least a first data element configured
network identifier and where the third data element or to tore a personal account a second data
a fourth data element is configured to store a digital element configured to store a merchant identifier, and a
signature ; 35 third data element configured to store at least a block
identifying, by a processor of the computer system , a first chain network identifier and where the third data ele
account profile stored in the account database where the ment or a fourth data element is configured to store a
included account identifier corresponds to the personal digital signature; and
account number stored in the first data element a processor of the computer system configured to
included in the received transaction message , and 40 identify a first account profile stored in the account
wherein the first account profile includes a public key; database where the included account identifier cor
identifying, by the processor of the computer system , a responds to the personal account number stored in
second account profile stored in the account database the first data element included in the received trans
where the included account identifier corresponds to action message , and wherein the first account profile
the merchant identifier stored in the second data ele- 45 includes a public key, and
ment included in the received transaction message ; identify a second account profile stored in the account
receiving, by the receiver of the computer system , a database where the included account identifier cor
transaction notification , wherein the transaction notifi responds to the merchant identifier stored in the
cation indicates a transaction processed using a block second data element included in the received trans
chain network associated with the blockchain network 50 action message , wherein
identifier stored in the third data element included in the receiving device is further configured to receive a
the received transaction message and includes at least transaction notification , wherein the transaction notifi
a transaction identifier and an address identifier asso cation indicates a transaction processed using a block
ciated with one of the first account profile and the chain network associated with the blockchain network
second account profile, and where the address identifier 55 identifier stored in the third data element included in
is generated using the public key ; the received transaction message and includes at least
verifying, by the processor of the computer system , the a transaction identifier and an address identifier asso
digital signature using the public key included in the ciated with one of the first account profile and the
first account profile ; and second account profile, and where the address identifier
storing , by the processor of the computer system upon 60 is generated using the public key, and
verification of the digital signature , a linkage between the processing device is further configured to
the transaction identifier included in the received trans- verify the digital signature using the public key
action notification and at least one of: the address included in the first account profile, and
identifier, the personal account number, and the mer store a linkage between the transaction identifier
chant identifier. 65 included in the received transaction notification and
2. The method of claim 1 , wherein the linkage is stored in at least one of: the address identifier, the personal
a transaction database as a linkage profile, the linkage profile account number, and the merchant identifier.
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10. The system of claim 9 , further comprising:
a transaction database , wherein the linkage is stored in the
transaction database as a linkage profile , the linkage
profile including at least the transaction identifier and
the at least one of: the address identifier, the personal 5
account number, and the merchant identifier .
11. The system of claim 9 , wherein the linkage is stored
in the first account profile.
12. The system of claim 9 , wherein