Patent Issued for Distributed ledger for letter of credit tracking (USPTO 11861697): United Services Automobile Association

2024 JAN 18 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- According to news reporting originating from Alexandria, Virginia, by NewsRx journalists, a patent by the inventors De’Angeli, Sacha Melquiades (San Antonio, TX, US), Leal, Philip Andrew (San Antonio, TX, US), filed on September 13, 2019, was published online on January 2, 2024.

The assignee for this patent, patent number 11861697, is United Services Automobile Association (San Antonio, Texas, United States).

Reporters obtained the following quote from the background information supplied by the inventors: “The present disclosure relates generally to letter of credit tracking, and more particularly to systems and methods for letter of credit tracking via a distributed ledger.

“This section is intended to introduce the reader to various aspects of art that may be related to various aspects of the present disclosure, which are described and/or claimed below. This discussion is believed to help provide the reader with background information to facilitate a better understanding of the various aspects of the present disclosure. Accordingly, it is understood that these statements are to be read in this light, and not as admissions of prior art.

“A traditional letter of credit may be issued by a first bank to a second bank to serve as a bank guarantee, for example, of large payments made to a specified entity under certain specified conditions. For example, the first bank may guarantee that an office building buyer’s payment will be received on time, and for the correct amount by the second bank. Should the payment not be received as specified, the first bank would then cover any differences. However, the high transactional costs (e.g., friction) of offering and managing letters of credit has presented such systems from being available to the general public. The techniques described herein may provide for improvement in systems and methods for letters of credit.”

In addition to obtaining background information on this patent, NewsRx editors also obtained the inventors’ summary information for this patent: “Embodiments of the present disclosure are directed to systems, devices, methods, and computer-readable media for creating, maintaining, and tracking letters of credit using a distributed ledger. Letters of credit may include information, such as credit history, life insurance information, health information, vehicle information, property information, rental history, employment history, and the like, useful in establishing an entity’s reputation, payment history, and financial record. Information stored in the letter of credit may be tracked using a distributed ledger system, such as a system that includes one or more blockchains. The blockchain(s) provide immutable and secure data storage, which may be distributed across a plurality of computing systems or nodes. As new transactions occur, the new transactions may be included in the distributed ledger system, thus “growing” the letter of credit throughout the lifetime of the entity. The distributed ledger system, such as one or more blockchains, may be used to store the letter of credit information, including new transactions, more efficiently and inexpensively. The distributed ledger system also provides security, such that only authorized individuals and/or processes can access the data stored on the distributed ledger system. The distributed ledger system also provides immutability, such that data records written to the distributed ledger may not be changed or removed once written.

“In certain embodiments, a blockchain may be used as a public or private ledger of all transactions that have been executed for the tracked asset. The blockchain may grow as new blocks are added based on a new set of transactions. In some examples, a single block is derived from multiple transactions. In general, blocks are added to the blockchain in a linear, chronological order by one or more computing devices in a peer-to-peer network of interconnected computing devices that execute a blockchain protocol. The peer-to-peer network may be described as a plurality of interconnected nodes, each node being a computing device that uses a client to validate and to relay transactions to other nodes. Each node may maintain a copy of the blockchain, which is automatically downloaded to the node upon joining the peer-to-peer network. The blockchain protocol provides a secure and reliable method of updating the blockchain, copies of which are distributed across the peer-to-peer network, without use of a central authority.

“Because all entities on the blockchain network may need to know all previous transactions to validate a requested transaction, all entities should agree on which transactions have actually occurred, and in which order. For example, should two entities observe different transaction histories, they will be unable to come to the same conclusion regarding the validity of a transaction. The blockchain techniques described herein enable all entities to come to an agreement as to transactions that have already occurred, and in which order. As described in further detail below, a ledger of transactions for a tracked letter of credit is agreed to based on the amount of work (e.g., computing work such as hashing) required to add a transaction to the ledger of transactions (e.g., add a block to the blockchain). Blockchains may also employ other protocols, for example, that may define “work” differently. The work may be a computing task that may be difficult for any single node (e.g., computing device) in the peer-to-peer network to complete quickly, but is relatively easy for any node (e.g., computing device) to verify.

“The peer-to-peer network may include multiple “miners” (e.g., computing devices) that add blocks to a blockchain based on the blockchain protocol. In general, multiple miners validate transactions that are to be added to a block, and compete (e.g., perform computing work, as introduced above) to have their respective block added to the blockchain. Validation of transactions includes verifying digital signatures associated with respective transactions. For a block to be added to the blockchain, a miner must demonstrate a proof of work before their proposed block of transactions is accepted by the peer-to-peer network, and before the block is added to the blockchain. In certain embodiments, a blockchain protocol include a proof of work scheme that is based on a cryptographic hash function (CHF). An example CIF includes the secure hash algorithm 256 (SHA-256). In general, the CIF receives information as input, and provides a hash value as output, the hash value being of a predetermined length. For example, SHA-256 outputs a 256-bit (32-byte, 64-character) hash value. In some examples, the hash value is a one-way hash value such that the output hash value cannot be ‘un-hashed’ to determine what the input was. The blockchain protocol can require multiple pieces of information as input to the CHF. For example, the input to the CIF can include a reference to the previous (most recent) block in the blockchain, details of the transaction(s) that are to be included in the to be created block, and a “nonce” value (e.g., a random number used only once).

“Multiple nodes may compete to hash a set of transactions and to provide the next block that is to be added to the blockchain. The blockchain protocol provides a threshold hash to qualify a block to be added to the blockchain. For example, the threshold hash can include a predefined number of zeros (0’s) that the hash value must have at the beginning (e.g., at least the first four characters of the hash value must each be zero). The higher the number of zeros, the more computationally time-consuming it may be to arrive at a qualifying hash value.”

The claims supplied by the inventors are:

“1. A system comprising: a processor; and a memory communicatively coupled to the first processor, the memory storing instructions which, when executed, cause the processor to perform operations comprising: generating, via a cryptographic system, an encrypted certificate indicative of a letter of credit issued by a second entity to a first entity, wherein the encrypted certificate comprises a certificate ID; storing the encrypted certificate in at least one block of a digital distributed ledger system; distributing the at least one block among nodes of the digital distributed ledger system, wherein the digital distributed ledger system is configured to immutably store the encrypted certificate; and after distributing the at least one block among the nodes of the digital distributed ledger system, verifying, via a third entity separate from the first entity and the second entity, the encrypted certificate, wherein the verifying comprises: partially unencrypting the encrypted certificate by applying a private key of the first entity to derive a partially decrypted certificate; and unencrypting, via the third entity, the partially decrypted certificate by applying a public key of the second entity and the certificate ID to derive a decrypted certificate.

“2. The system of claim 1, wherein establishing, via the cryptographic system, the encrypted certificate comprises encrypting with a public key of the first entity and with a private key of the second entity, wherein the encrypted certificate comprises records of the letter of credit, one or more relationships between the first entity and the second entity, one or more transactions between the first entity and the second entity, or any combination thereof.

“3. The system of claim 1, wherein the cryptographic system comprises a Pretty Good Privacy (PGP) system.

“4. The system of claim 1, wherein the digital distributed ledger system is configured to immutably store the encrypted certificate via a peer-to-peer network.

“5. The system of claim 1, wherein the operations comprise: updating, by at least one node of the nodes of the digital distributed ledger system, the encrypted certificate based on one or more new transactions associated with the first entity.

“6. The system of claim 1, wherein the encrypted certificate comprises credit information associated with the first entity, life insurance information associated with the first entity, health information associated with the first entity, real property information associated with the first entity, personal property information associated with the first entity, rental history information associated with the first entity, employment information associated with the first entity, or a combination thereof.

“7. The system of claim 6, wherein the encrypted certificate comprises the credit information and additional information including the life insurance information, the health information, the real property information, the personal property information, the rental history information, the employment information, or a combination thereof, and wherein the operations comprise: receiving, by at least one node of the nodes of the digital distributed ledger system, a query for the additional information associated with the first entity; decrypting, by the at least one node, only a portion of the encrypted certificate that includes the additional information; and transmitting, by the at least one node, the additional information to a display device for display.

“8. The system of claim 1, wherein the verifying, via the third entity, the encrypted certificate comprises retrieving the encrypted certificate from the at least one block of the digital distributed ledger system.

“9. The system of claim 1, wherein the verifying, via the third entity, the encrypted certificate comprises displaying, via a display device communicatively coupled to the third entity, the letter of credit issued by the second entity to the first entity.

“10. The system of claim 1, wherein the certificate ID is a globally unique identification.

“11. A method performed by at least one processor, the method comprising: generating, via a cryptographic system, an encrypted certificate indicative of a letter of credit issued by a second entity to a first entity, wherein the encrypted certificate comprises a certificate ID; storing the encrypted certificate in at least one block of a digital distributed ledger system; distributing the at least one block among nodes of the digital distributed ledger system, wherein the digital distributed ledger system is configured to immutably store the encrypted certificate; and after distributing the at least one block among the nodes of the digital distributed ledger system, verifying, via a third entity separate from the first entity and the second entity, the encrypted certificate, wherein the verifying comprises: partially unencrypting the encrypted certificate by applying a private key of the first entity to derive a partially decrypted certificate; and unencrypting, via the third entity, the partially decrypted certificate by applying a public key of the second entity and the certificate ID to derive a decrypted certificate.

“12. The method of claim 11, comprising: updating, by at least one node of the nodes of the digital distributed ledger system, the encrypted certificate based on one or more new transactions associated with the first entity.

“13. The method of claim 11, wherein the encrypted certificate comprises credit information associated with the first entity, life insurance information associated with the first entity, health information associated with the first entity, real property information associated with the first entity, personal property information associated with the first entity, rental history information associated with the first entity, employment information associated with the first entity, or a combination thereof.

“14. The method of claim 13, wherein the encrypted certificate comprises the credit information and one or more of: the life insurance information, the health information, the real property information, the personal property information, the rental history information, and the employment information, and wherein the method comprises: receiving, by at least one node of the nodes of the digital distributed ledger system, a query for the credit information associated with the first entity; decrypting, by the at least one node, only a portion of the encrypted certificate that includes the credit information; and transmitting, by the at least one node, the credit information to a display device for display.

“15. One or more non-transitory computer-readable storage media storing instructions which, when executed, cause at least one processor to perform operations comprising: generating, via a cryptographic system, an encrypted certificate indicative of a letter of credit issued by a second entity to a first entity, wherein the encrypted certificate comprises a certificate ID; storing the encrypted certificate in at least one block of a digital distributed ledger system; distributing the at least one block among nodes of the digital distributed ledger system, wherein the digital distributed ledger system is configured to immutably store the encrypted certificate; and after distributing the at least one block among the nodes of the digital distributed ledger system, verifying, via a third entity separate from the first entity and the second entity, the encrypted certificate, wherein the verifying comprises: partially unencrypting the encrypted certificate by applying a private key of the first entity to derive a partially decrypted certificate; and unencrypting, via the third entity, the partially decrypted certificate by applying a public key of the second entity and the certificate ID to derive a decrypted certificate.

“16. The one or more non-transitory computer-readable storage media of claim 15, wherein establishing, via the cryptographic system, the encrypted certificate comprises encrypting with a public key of the first entity and with a private key of the second entity, wherein the encrypted certificate comprises records of the letter of credit, one or more relationships between the first entity and the second entity, one or more transactions between the first entity and the second entity, or any combination thereof.

“17. The one or more non-transitory computer-readable storage media of claim 15, wherein the operations comprise: updating, by at least one node of the nodes of the digital distributed ledger system, the encrypted certificate based on one or more new transactions associated with the first entity.

“18. The one or more non-transitory computer-readable storage media of claim 15, wherein the encrypted certificate comprises credit information associated with the first entity, life insurance information associated with the first entity, health information associated with the first entity, real property information associated with the first entity, personal property information associated with the first entity, rental history information associated with the first entity, employment information associated with the first entity, or a combination thereof.”

There are additional claims. Please visit full patent to read further.

For more information, see this patent: De’Angeli, Sacha Melquiades. Distributed ledger for letter of credit tracking. U.S. Patent Number 11861697, filed September 13, 2019, and published online on January 2, 2024. Patent URL (for desktop use only): https://ppubs.uspto.gov/pubwebapp/external.html?q=(11861697)&db=USPAT&type=ids

(Our reports deliver fact-based news of research and discoveries from around the world.)