Overview
This invention presents a comprehensive system and method for tracking digital currency transactions, ensuring security, transparency, and regulatory compliance. By leveraging blockchain technology and advanced cryptographic techniques, the system enables efficient transaction verification, storage, and traceability.
Core Components
1. Currency Transaction Module
- Function: Processes transaction requests between parties.
Process:
- The payer initiates a transaction request.
- The receiver generates a shared private key using ECDH key agreement, combining the payer’s public key and the receiver’s private key.
- The shared key decrypts and validates the request.
- Transactions are recorded on a blockchain ledger.
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2. Transaction Storage Module
- Function: Manages transaction records locally or syncs to a cloud database.
Data Stored:
- Owner details.
- Transaction amount.
- Unique currency identifiers.
3. Transaction Record Module
- Function: Compresses transaction logs using dynamic Huffman coding.
Adds:
- Compressed records to the receiver’s currency.
- A tracking identifier issued by the currency’s regulatory body.
4. Currency Tracking Module
- Function: Validates tracking requests via cryptographic checks.
Steps:
- Verifies the tracker’s identity using public/private key pairs.
- Matches the request’s checksum with the tracking identifier.
- Generates a transaction chain if authorized.
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Key Features
| Feature | Description | Benefit |
|---|---|---|
| ECDH Algorithm | Secure shared key generation. | Prevents MITM attacks. |
| Dynamic Compression | Reduces storage needs via Huffman coding. | Optimizes blockchain space. |
| Tracking Identifiers | Tamper-proof tags with random strings. | Ensures auditability. |
| Abnormal Transaction Handling | Flags or blocks invalid transactions. | Enhances fraud detection. |
Method Workflow
- Initiate Transaction: Payer sends a request.
- Key Agreement: Receiver derives a shared key.
- Validation: Decrypts and approves the request.
- Record Storage: Saves to local/cloud storage.
- Tracking: Authorized parties trace transaction history.
FAQs
Q1: How does the system ensure transaction privacy?
A: Transactions are encrypted end-to-end, and only parties with valid keys can decrypt data.
Q2: What happens if a tracking identifier is corrupted?
A: The system halts the transaction and alerts regulatory authorities.
Q3: Can this method handle offline transactions?
A: Yes, transactions are stored locally and synced when connectivity resumes.
Q4: Is the ECDH algorithm mandatory?
A: While ECDH is recommended, alternative secure key agreement methods may be used.
Conclusion
This system bridges security and transparency in digital currency ecosystems, offering robust tools for transaction tracking and regulatory compliance. Its modular design ensures adaptability across financial platforms.