Patent Application
20190378128
This application includes material which is subject or may be subject to copyright and/or trademark protection. The copyright and trademark owner(s) has no objection to the facsimile reproduction by any of the patent disclosure, as it appears in the Patent and Trademark Office files or records, but otherwise reserves all copyright and trademark rights whatsoever.
The invention generally relates to means and methods of crypto-tokenized monetary exchanges and fund transfers memorialized with machine created immutable distributed blockchain records. More particularly, the invention relates to machine systems and methods sometimes used for facilitating contract performance in the form of crypto-tokenized electronic funds deposits, balances, escrow, payments, scheduled payments, contingent payments, transfers and machine-based dispute resolution according to the terms of electronic legal contracts generated and/or managed by the disclosed systems over a network or a plurality of networks, with such networks including the Internet. Disclosed embodiments include means and methods of creating and facilitating digital performance of on-chain self executing smart contracts. Disclosed embodiments include use of expanded network systems often called Internet of Things or IoT, mechanically or electrically fixed and tangible components such as hash codes, tokens and IDs or identification strings that enable identity portability. The term “on-chain” may mean a component such as an on-chain self executing smart contract that is stored, defined, executed or otherwise associated with one or more blockchains. A blockchain or related components such as an on-chain self executing smart contract may take any one of many physical forms, such as immutable electronic records, non-transitory media, original, fixed, immutable hash codes, and other physical forms and specialized computing systems.
The known related art fails to anticipate or disclose the principles of the presently disclosed embodiments.
In the related art, U.S. Pat. No. 8,255,800 by Rocket Lawyer Incorporated is known and may be considered to be in the same field of various subsets of the disclosed embodiments. But, the presently disclosed embodiments represent unobvious departures and improvements to the known related art. For example, the known prior art of Rocket Lawyer Incorporated does not disclose, anticipate or support performance of the financial consideration terms of contracts created in a machine environment. Moreover, the prior art fails to disclose or anticipate the disclosed embodiments of machine based payments in reaction to machine based contract dispute resolution or machine based payments in reaction to undisputed contract performance. Thus, there is a need in the art for the presently disclosed embodiments.
The present invention overcomes shortfalls in the related art by presenting an unobvious and unique combination and configuration of methods, systems and components to mechanically or electronically resolve commercial or contractual disputes and mechanically transfer payments by mechanically created crypto-tokenized exchanges of system generated currencies or other means of payments.
The disclosed embodiments overcome shortfalls in the related art by facilitating contract performance and automatically compensating parties by use of a machine based ecosystem wherein payments are triggered in reaction to full or partial contract performance.
These and other objects and advantages will be made apparent when considering the following detailed specification when taken in conjunction with the drawings.
The following detailed description is directed to certain specific embodiments of the invention. However, the invention can be embodied in a multitude of different ways as defined and covered by the claims and their equivalents. In this description, reference is made to the drawings wherein like parts are designated with like numerals throughout.
Unless otherwise noted in this specification or in the claims, all of the terms used in the specification and the claims will have the meanings normally ascribed to these terms by workers in the art.
Unless the context clearly requires otherwise, throughout the description and the claims, the words “comprise,” “comprising” and the like are to be construed in an inclusive sense as opposed to an exclusive or exhaustive sense; that is to say, in a sense of “including, but not limited to.” Words using the singular or plural number also include the plural or singular number, respectively. Additionally, the words “herein,” “above,” “below,” and words of similar import, when used in this application, shall refer to this application as a whole and not to any particular portions of this application.
Any and all the above references and U.S. patents and applications are incorporated herein by reference. Aspects of the invention can be modified, if necessary, to employ the systems, functions and concepts of the various patents and applications described above to provide yet further embodiments of the invention.
The disclosed embodiments include a system and method of facilitating and monitoring machine based contract formation, performance monitoring, triggering of payments, payment and when needed, dispute resolution. In the handling of money, disclosed embodiments include the use of traditional currency as well as floating and non-floating crypto tokens.
Floating crypto tokens may be implemented via crypto-tokenized exchange of financial consideration. Fiat currencies (e.g., USD, GBP, EUR) may be exchanged for blockchain-based crypto-tokens at a fixed or market exchange rate. The use of floating crypto tokens or other blockchain currencies may be used in other applications such as raising capital or providing investment opportunities.
Disclosed embodiments include the use of non-floating crypto-tokens that may be purchased with a selected fiat currency and then later redeemed with the selected fiat currency so as to avoid fluctuations in crypto token exchange rates.
In a floating crypto token embodiment, the exchange rate at the time of exchange is recorded into the blockchain as part of a Smart Contract. The term Smart Contract may also include “on-chain self executing smart contract.” The Smart Contract records the right of the party exchanging fiat currency to “put” or re-sell the crypto-token within the network at the same exchange rate of the original purchase. The Smart Contract supports one or more blockchain Wallets to facilitate withdrawal of fiat currency through either execution of the Put Option, in whole or in part, or sale of some or all of the crypto-tokens governed by the Smart Contract in a third party transaction outside the network. Token transfers as consideration for centralized, off blockchain contracts are facilitated by the system and such token transfers are also tracked and auto-recorded within the context of the on-chain Smart Contract governed Wallets. Parties receiving crypto-tokens via transfers within the network also receive the right to re-sell the crypto-token within the network at the same exchange rate of the original purchase, or to sell some or all of the transferred crypto-tokens in a third party transaction outside the network.
In either floating or non-floating crypto token implementations, the system is capable of holding in escrow or restricting access to tokenized balances according to off-chain, network-based legal contract terms between network users who are parties to said off-chain legal contracts according to the terms of the off-chain legal contract. Execution of off-chain legal contracts is validated and recorded by jurisdictionally compliant cryptographic, digital signatures that are recorded on-chain as Smart Contracts. Such Smart Contracts include the payment terms automatically extracted from the off-chain, network-based legal contract. In order to digitally sign, the IDs of the parties, may be stored on the blockchain as Smart Contract conditions. Upon successful performance of the off-chain, network-based legal contract, crypto-tokens are automatically transferred between parties via network compatible electronic Wallets in accordance with the payment term conditions programmed in the Smart Contract. Disclosed embodiments include the use of various means of ID verification that may or may not use smart contracts. ID verification or IDs may take many forms such as tangible forms of electronic or mechanical tokens, hash codes, encrypted keys with such IDs existing independently or residing within or upon a blockchain, off chain contract, self executing smart contract or other system component.
Disputes of contracts may be resolved via machine-based logic without human intervention by evaluation of data according to pre-set rules and machine-logic. Financial settlement of disputes is accomplished by the automated release of tokenized funds into the electronic Wallet of the prevailing party or parties to the dispute. Undisputed transactions are automatically processed and tokenized funds released to electronic Wallets of the parties, according to the on-chain payment terms derived or extracted from the off-chain contract terms by the system.
Disclosed embodiments may or may not include some or all of the following steps:
Step 1: Off chain contract is created via electronic document assembly or file upload to the network.
Step 2. Contract is reviewed, negotiated and executed by the parties via jurisdictionally compliant digital signatures and further recorded as an on-chain Smart Contract, subject to Smart Contract ID verification.
Step 3. Payment terms automatically extracted from the contract are recorded on-chain as a Smart Contract.
Step 4. Parties may optionally purchase crypto-tokens pursuant to on-chain Smart Contracts containing exchange rate and option to either re-sell (put) crypto-tokens to the network operator or other purchaser at the original exchange rate or sell crypto-tokens in third party transactions at market exchange rates. The use of non-floating crypto tokens may be implemented wherein a selected fiat currency is used for the purchase and redemption of crypto tokens.
Step 5. Network automatically reserves and releases tokens to off-chain contract parties according to off-chain contract terms recorded in on-chain Smart Contracts.
Step 6. Prior to the release of tokens described in Step 5, parties may dispute the off-chain contract performance.
Step 7. The Network Operator may determine the winner and loser of the dispute (if any) described in Step 6 by evaluating data according to machine logic, or the system will automatically determine a winner or otherwise provide a dispute judgment or judgement of contract or party performance by predefined system rules and/or machine logic
Step 8. The Winner of the dispute, if applicable, is awarded the disputed tokens without human intervention.
Disclosed embodiments include both the use and non-use of escrow accounts.
Disclosed embodiments include systems and methods of facilitating machine based contract performance and dispute resolution via crypto-tokenized exchange of financial consideration.
Referring to
A second step illustrated in
A third step illustrated in
In general,
Referring to
In a 5th step or 5a step illustrated in
A first tokenization may be recorded from the network exchange 600 to the blockchain 400 with the blockchain hold or defines a smart contract with payment terms 350 and or a smart contract with a Token FX rate 352.
In a 6th step or 5b step illustrated in
Referring to
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In
In another step of
In a further step illustrated in
In a further step illustrated in
Disclosed embodiments include means and methods of monitoring and facilitating numerous aspects of contract performance wherein such performance or related acts may be triggered or executed by machine. Disclosed embodiments include the machine execution of contract performance that may take digital or electronic action such as: payments from one party to another party, delivery and acceptance of services, delivery and acceptance of goods or even the absence of a triggering event (e.g., a tenant occupies a rental property and payments are automatically sent to the landlord every month for the term of the lease agreement).
Smart contracts, which may include specialized digital files stored upon blockchain systems and may be considered and perform as a self-executing smart contract. A smart contract herein may electronically or mechanically automatically trigger one performance element, based on the smart contract becoming “aware” of the performance of another performance element that was a condition to the second.
The machine implemented and automatic nature of the disclosed smart contracts and/or on-chain self executing smart contracts may have the following performance attributes: 1) time based conditional. If the contract calls for a payment to be made on a certain date, absent another condition, like a dispute or default, then, the Smart Contract will automatically initiate the payment on the date specified, whenever the “dispute” or “default” condition has not been triggered within the conditional time frame; 2) a network enabled device relays to the Smart Contract that an asset has been received by one party from another party or has arrived at a contractually agreed location checkpoint and a payment is triggered based on the condition that the asset arrived per the terms stored in the Smart Contract.
Disclosed embodiments include mechanically or electrically fixed and tangible components such as hash codes, tokens and IDs or identification strings that enable identity portability. Disclosed embodiments include the novel creation of physically or electronically fixed and tangible items such as tokens and/or hash codes.
The tokens and/or hash codes may be unique and created by the system as terms, payments and other contract and contract performance elements that are automatically extracted on off chain contract and disposed upon self executing smart contracts, with the self executing smart contracts sometimes residing upon or embedded within an underlying blockchain system 400, such as the system shown in
In further review of
Other system components such as a cryptocurrency tokens, or crypto tokens 520, token FX rates 352, digital signatures, evidence of party performance 203, 213, electronic wallets 202, 212, and other system components may all take the form of specialized, fixed and tangible tokens and/or hash codes.
Items
Disclosed embodiments may include the following items:
1. A method of contract formation, electronic contract performance monitoring, electronic payment, and electronic contract performance using smart contract defined and created upon an electronic blockchain system the method comprising the steps of:
a) a network and computer creating a contract by file upload through the network to the computer;
b) digital signatures by parties to the contract uploaded via the network into the computer, the digital signatures recorded as an on-chain smart contract,
c) payment terms of the contract are extracted by the computer with the extracted payment terms then added to the on-chain smart contract;
d) the computer issues crypto tokens to the parties after receiving consideration from the parties;
e) to the on-chain smart contract receiving data confirming performance of the on-chain smart contract, the computer releases crypto tokens to one or more of the parties.
2. The method of item 1 further including the step of:
a) the on-chain smart contract comprising an exchange rate for the crypto currency as compared to a fiat currency and the step of the on-chain smart contract offering an option to a party to option to either re-sell (put) crypto-tokens to a system operator at the original exchange rate or sell crypto-tokens in third party transactions at market exchange rates.
3. A system of contract formation and electronic contract performance using an on-chain smart contract, the on-chain smart contract defined and created upon an electronic blockchain system the system comprising:
a) a contract created by a computer and electronic network, the contract formed by uploads over the electronic network to the computer;
b) an on-chain smart contract comprising contract terms extracted by the computer from the contract, the on-chain contract further comprising digital signatures of the parties to the contract;
c) crypto tokens issued by the computer to one or more of the parties to the contract in exchange for consideration received from one or more of the parties;
d) a release of crypto tokens to one or more of the parties in response to the on-chain smart contract receiving data confirming performance of the on-chain smart contract.
4. The system of item 4 wherein the on-chain smart contract contains an exchange rate and option transmitted to one or more of the parties, with the option comprises means to either re-sell (put) crypto-tokens to the network operator at the original exchange rate or sell crypto-tokens in third party transactions at market exchange rates.
5. The method of item 1 using tangible tokens to memorialize the self-executing smart contract.
The detailed description of embodiments of the invention herein is not intended to be exhaustive or to limit the invention to the precise form disclosed above. While specific embodiments of, and examples for, the invention are described above for illustrative purposes, various equivalent modifications are possible within the scope of the invention, as those skilled in the relevant art will recognize. For example, while steps are presented in a given order, alternative embodiments may perform routines having steps in a different order. The teachings of the invention provided herein can be applied to other systems, not only the systems described herein. The various embodiments described herein can be combined to provide further embodiments. These and other changes can be made to the invention in light of the detailed description.
This utility patent application claims priority of and the benefit of provisional patent application 62/682,756 filed on Jun. 8, 2018 the contents of which are incorporated herein by reference.
| Number | Date | Country | |
|---|---|---|---|
| 62682756 | Jun 2018 | US |
