Cryptocurrencies can be exchanged within a peer-to-peer environment, without relying on 3rd intermediary parties. Although exchange of value is possible using a single cryptocurrency, exchange of values across various coins’ blockchains is currently not possible without utilization of some sort of an intermediary party, such as cryptocurrency exchanges. To overcome this problem, a patent was introduced proposing an innovative system and method for exchanging value across multiple blockchains. So, if A has bitcoin, he/she can exchange them for another coin, e.g. monero, via using the proposed system without going into a centralized exchange service, or any other “middlemen”.
The hash algorithms for different cryptocurrencies are highly variable, which accounts for the difficulty underlying exchange of value using different cryptocurrencies. For instance, bitcoin has an SHA-256 hashing algorithm that is designed to produce 32 bit words, or solutions. The SHA-256 proof of work (PoW) hashing algorithm represents a function that is CPU bound. On the other hand, other coins, e.g. monero, has a CryptoNight hashing algorithm whose function is memory bound, rather than CPU bound. There are currently hundreds of cryptocurrencies and as such, there are tens of hashing algorithms. Consequently, each coin has a specific inner algorithm and produces a blockchain with a distinctive size, up to 512 bit words.
Moreover, the software solutions available presently cannot perform efficient dynamic pricing prediction of various cryptocurrencies and aren’t capable of effectively working across more than 2 blockchains simultaneously. Accordingly, it might be necessary to perform translation of cryptocurrency addresses and/or mapping to execute transactions efficiently across multiple blockchains.
An Overview of The Problems Solved By The Invention:
The proposed innovation provides a system that can perform translation of cryprocurrency destination addresses and mapping between two or more coins. The protocol of the system is designed to provide a way for allocating multiple asset accounts, whether in the form of cryptocurrencies or tangible assets, to a single entity that can be represented by a single private key.
According to the patent, the system provides an improved system for transacting various cryptocurrencies. It is also designed to permit the initiation of at least a single transaction across more than one blockchain simultaneously. It is also coded to provide improved means for assigning value or dynamically pricing one or more cryptocurrencies. This has been made possible as the invention is capable of coordinating transactions across blockchains with different blockchain intervals.
With all the mentioned problems solved, the invention can open the door for creation of cryptocurrency exchanges that are based on the blockchain technology rather than on centralized bodies.
Elements of The Invention:
The invention provides a system for performing an action across more than one blockchain, which is comprised of a first address, with its private key representing the first blockchain, and a second address with a second private key representing the second blockchain. Both private keys are hashed and a hierarchy key is created to authorize one or more actions that involve at least one of the two blockchains.
It also includes a system formulated for use with a virtual asset on a cryptocurrency blockchain which is comprised of parsing one or more blocks, which are associated with a blockchain, and storing all the parsed blocks (one or more). Practically, one or more user accounts will be associated with one or more parsed blocks, which will lead to assignment of a predetermined group of rules to at least one cryptocurrency address, and in such way, when at least one of the rules, that have been previously predetermined and assigned to at least one cryptocurrency address, is successfully triggered, an action will be performed by the system.
An action, which would be performed by the system, can be a transaction. A timestamp can be linked to at least one performed action. A virtual asset can be represented by a cryptocurrency, a fiat currency, merchandise, a commodity, an object, an asset, a bond or any other form of a tangible asset. Minimally, a single set of data, representing a parsed block, would be recorded on a computer readable medium. At a predetermined time interval, a check for the presence of a new block, on one blockchain at least, takes place. The system is designed to permit triggering of more than one action simultaneously. As at least 2 different blockchain addresses are linked to the system, more than one action can be triggered.
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