GB2559165A

GB2559165A - Blockchain zero checksum trading system

Info

Publication number: GB2559165A
Application number: GB1701423.4A
Authority: GB
Inventors: Cabrera Fernandez Florencio
Original assignee: Individual
Current assignee: Individual
Priority date: 2017-01-29
Filing date: 2017-01-29
Publication date: 2018-08-01
Also published as: GB201701423D0

Abstract

A secure network architecture provides a digital securities trading with blockchain credit guarantees. A collateral asset trust, such as government bonds, secures blockchain ledger bonds used in a private credit-guarantee system. A new crosscheck two-ledger method for verification of users and transactions is implemented to record true blockchain transactions. Every is validated by means of a second blockchain ledger that is verified by secure crosscheck hashing algorithms. This system incorporates biometric user credentials and integrates a background-check SOAP to verify credit records. An improvement over prior-art block chain ledgers is a zero-checksum algorithm, using two encrypted ledgers in order to incorporate vetted user information and transactions in the blockchain, which is proposed as another improvement over prior art by solving problems limiting regulatory approval. The two ledgers undergo a fast Fourier transform (FFT) to form time domain pulses. The checksums are compared, and if the differences between the checksums is non-zero, an error is determined.

Description

(71) Applicant(s):

Florencio Cabrera Fernandez

Marshall Street, Folkstone, Kent, CT19 6ES,

United Kingdom (72) Inventor(s):

Florencio Cabrera Fernandez (51) INT CL:

G06Q 20/36 (2012.01) (56) Documents Cited:

US 5995484 A US 20050149811 A1

G06F17/14 (2006.01)

US 20170109735 A1 (58) Field of Search:

INT CL G06F, G06Q, H04L

Other: WPI, EPODOC, Patent Fulltext (74) Agent and/or Address for Service:

Florencio Cabrera Fernandez

Marshall Street, Folkstone, Kent, CT19 6ES,

United Kingdom (54) Title of the Invention: Blockchain zero checksum trading system Abstract Title: Blockchain Zero Checksum Trading System (57) A secure network architecture provides a digital securities trading with blockchain credit guarantees. A collateral asset trust, such as government bonds, secures blockchain ledger bonds used in a private credit-guarantee system. A new crosscheck two-ledger method for verification of users and transactions is implemented to record true blockchain transactions. Every is validated by means of a second blockchain ledger that is verified by secure crosscheck hashing algorithms. This system incorporates biometric user credentials and integrates a backgroundcheck SOAP to verify credit records. An improvement over prior-art block chain ledgers is a zero-checksum algorithm, using two encrypted ledgers in order to incorporate vetted user information and transactions in the blockchain, which is proposed as another improvement over prior art by solving problems limiting regulatory approval. The two ledgers undergo a fast Fourier transform (FFT) to form time domain pulses. The checksums are compared, and if the differences between the checksums is non-zero, an error is determined.

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Blockchain Zero Checksum Trading System

Description

One of the critical problems limiting economic growth in our world's financial system is lack of sufficient bank credit and availability of project finance for small and medium enterprises and worthy green-field projects. A fundamental cause for not having sufficient credit liquidity and structured finance probably originates in the fact access to credit lines and capital is generally limited to borrowers with significant assets and collateral guarantees by banks and investment institutions. Not apparent hereto, this systemic credit market inefficciency has actually created a wide credit-quality pricing arbitrage opportunity to cross-collateralize lower-graded credits within a block chain system, created to issue digital securities for trade.

Over the last few years, crowd funding solutions have been developed in the prior-art by using existing bitcoin digital-wallet holdings, which provide to anonymous owners of bitcoins an internet client portal to bid on terms sought by borrowers and denominated also in bitcoins. Those expert in the art may realize that bitcoin lending systems are essentially internet website market-portals which provide to existing holders of bitcoins, a user dashboard application in order to request funding and, also enables users to make lending offers on private, low-principal-value, mostly peer-to-peer bitcoin lending transactions. All of these transactions are denominated in the encrypted electronic bitcoin currency and are traded using digital wallets, but market capitalization for these schemes is still small.

One of the regulatory limitations for wider central bank approval and adoption of prior-art bitcoin lending schemes is the fact there is no record or credit information on the lenders and especially on the borrowers due to the very private and decentralized nature of existing bitcoin schemes. In this type of prior-art web-portal crowd funding system, identity verification is by definition practically non-existent, as there is no proper credit analysis or due diligence done in order to establish the true identity of all counterparties. As an improvement over this prior art and by intentional design, no money or existing prior-art electronic-wallet bitcoins are to be issued directly by this system. The diagrams and examples of different scales of embodiment along with detailed explanation of the drawings, illustrate to those expert in the art of banking and fund management, how to construct an automated system of encrypted block chain collateral guarantees, designed specifically to be compliant with financial system regulations.

Clearly, one of the limitations for existing bitcoin lending schemes is the fact that while they compete directly against more traditional types of loan brokerage there is no record of credit information on the lenders and especially on the borrowers due to the very private and decentralized nature of existing bitcoin schemes. In this type of prior-art web-portal crowd funding system, identity verification is by definition practically non-existent, and there is no proper credit analysis or due diligence in order to establish the true identity of all counterparties. Existing open-source-code bitcoin systems lack a fundamental principle of banking and credit, which is borrower authentic credit information. Due to their very private nature, bitcoin lending omits the credit checks always done for years by more traditional loan underwriters, loan brokers and even by web portal peer-to-peer lending online applications like eBay and Amazon. All of this body of prior-art is geared towards facilitating brokering of peer-to-peer lending of money or existing bitcoins in an anonymous and direct manner.

Some bitcoin peer-to-peer (brokerage-type) lending systems seek to induce current holders of existing bitcoins to enter into loans at an average interest rate of 7% with other bitcoin holders of electronic bitcoin wallets, who place loan requests and accept peer pricing terms. As a result of my research, I have realized that one of the most significant embodiments of this type peer-to-peer lending has not been able to gain significant market traction and despite having been in operation for several years, there is very limited adoption by users, as it is evidenced by many negative user reviews in different bitcoin blogs, where the most common grievance is the bad quality of borrowers and the lack of transparent credit information.

Another problem of not having validated borrower credit information is compounded by the very nature of the open-source bitcoin digital currency, which was designed by computer experts who advocated privacy as the fundamental characteristic for their encrypted currency. Therefore, any system of peer-to-peer lending that uses bitcoins in their current form, will fail to provide a robust and essential level of borrower credit quality and information, since both the lender and the borrower can remain completely anonymous if they so chose to do so.

On the other hand, this invention provides for the construction of a computer network system, which is designed to facilitate credit to many kinds of small and medium enterprises, as well as to many worthy individuals, by means of digitally securitizing a collateral bond trust, which may hold any type of asset of recognizable and acceptable value, including in the preferred embodiment, an investment portfolio of UK Gilts and US Treasury securities.

The product of this system is a new type of credit enhancement or collateral guarantee, which is issued electronically and encrypted in secure digital certificates, which are then registered in a block chain ledger, as well as physically issued and registered in a collateral trust, which holds the underlying asset for the purpose of conversion of the digital certificate into such collateral asset under certain conditions agreed in the indenture of the collateral trust, of which every system unit is subjected to perform. One of the most important rights of holders of a digital credit enhancement digital certificate is the right to convert such collateral trust unit share, into the proportional value of the assets held in trust for such purpose. One of the key design considerations for this invention has been that of providing an innovative solution in order to overcome certain collateral and asset guarantee limitations that bank intermediaries place on access to capital. Historically, many SME and projects face insurmountable credit guarantee barriers when seeking to rise financing from banks. This is particularly a problem since innovation is driven mostly by new & risky companies and therefore, lack of capital in the SME segment dampens new advances in technology. Thus, new products have entered the market to satisfy demand for credit, which has not been provided by traditional financial institutions.

As discussed above, a key problem with prior art bitcoin types of block chain currencies is that these digital currencies are not transparent to bank and financial system regulators, therefore enabling many instances of unlawful operations for money laundering and illicit activities; and as such, having a limited acceptance in the financial system, despite making strong advances in market capitalization due to high demand by millions of people around the world for a secure and more accessible funding system.

Furthermore, block chain currencies are not convertible into any asset of intrinsic value, just like the money supply in most Western economies in the current monetary system, are not convertible into any type of gold standard of fundamental value.

A fundamental principle supporting the value of currencies in our current world's financial system is that of trust or sovereign issuer guarantee. Currencies are issued by the central bank and guaranteed by the faith and credit of issuer sovereign government. Money in this sense currency is basically a non-interest bearing sovereign unsecured credit note.

In other words, currencies are sovereign debt issued by each designated central bank or European central bank. Perhaps one of the reasons some currencies have relatively high volatility is the impact that political and macro-economic expectations have on each issuer central bank, impacting future performance and also directly impacting the perceived relative value of money issued by such governments. One of the lessons that 1 have learned from years of experience in sovereign debt arbitrage operations in Wall Street, is that credit is established and granted based on a historical track record of past credit repayment performance by the borrower. The entire edifice of credit analysis rests upon the availability of true, correct and validated credit record information about borrowers, including their credit record and the ability to track repayment performance in order to grade each borrower on a long-term recorded and transparent basis.

Currencies fluctuate widely in value depending on news and market expectation about country risk, gross domestic productivity and interest rates. Currencies also reflect the balance of trade between countries and move in value according to the demand by importers to hold a country's currency in order to pay for goods and services. However, at the core of the system, the circulating monetary supply of any country is actually debt issued by the central bank and redeemable into goods and services by those who accept it as legal tender for all of their desired transactions.

There is a good reason why central banks issue other types of sovereign securities like longterm bonds or UK Gilts, US Treasury Bonds and other credit guaranteed financial instruments, by using their risk-free credit standing to provide investors with a stable reference of longterm value. In essence, the value of money is only given by the faith and credit that millions of people place in using any given security as legal tender for their debts and for acquiring the goods and services they demand. As many instances in history have amply proved, when a large number of people cease to have faith in the value of any given currency, the actual value of money disappears and its relative price to goods and services may evaporate completely.

At the very core of the value of money we find that it is the trust and faith people place on any given currency to hold value in order to satisfy their economic and transaction needs. So, any other object of value could be given the same characteristics as currency, for example gold, or diamonds or many other physical commodities that are used to store long-term value.

In this light as the inventor, I posit that any given physical or abstract object or construct may hold the same properties as money, as a currency, if people in any given market are willing to accept it and have faith in it as a means of exchange and payment for transactions. Central banks with very strong credit like the United Kingdom and the United States, issue sovereign bonds which are by definition the only asset-class that is considered to be risk-free. This is a central tenant of our current world financial system and such intrinsic definition of riskfree assets at a very wide interest rate pricing discount relative to corporate credit interest rates, presents an opportunity to create a new system of digital value with this invention.

The invention draws from experience in sovereign debt structured finance and computer science by implementing a new method to use the credit of sovereign risk-free bond issuers to cross-collateralize SME and project credit finance with traditional banks, as well as with millions of crowd funding investors, immigration investors and institutions by means of a secure computer system, in which AML/PEP/KYC verified users are able to access at market rates, unit shares issued by collateral trust fund, in the form of digital encrypted BitBond block chain ledger securities; thus providing significant improvement over prior art.

There is a very wide gap between the perceived risk for sovereign issued bonds and those issued by all other types of private or corporate issuers, which are graded by certain rating agencies depending on perceived risk. This risk scale continues down the spectrum into the private medium and small enterprise segments of any market, where the risk ratings are wider until it is considered junk credit or basically unable to be authorized for institutional banking credit lines. It is this riskier segment of the market that this invention seeks to help reach credit worthiness. First, by means of exploiting and capitalizing the wide margin between the current interest rate levels paid by sovereign guaranteed gilts and bonds, and the high interest rates paid by riskier types of corporate and private market SME borrowers for all types of credit.

And second, this system creates and captures financial capital demand for investment vehicles which offer UK Gilts and US Treasury security sovereign credit guarantees, in addition to an addition margin which heretofore had never been securitized and captured, because there had never been a system for creating a digital vehicle of value, which is directly convertible into such risk-free or sovereign guaranteed collateral financial assets.

Given the fact that counterparty credit risk is priced by credit markets in terms of interest rate margins from a benchmark called risk-free securities and, given also the fact that UK gilts and US treasury securities are such risk-free reference assets, then it is possible to use this structural definition of zero-risk to create a system for credit enhancement by investing in a portfolio of such UK and US sovereign risk-free securities; and then use this portfolio, which is to be held by an investment trust, to issue new collateral bonds and trust unit shares as credit guarantees for SMEs and many different viable project vehicles. Since the collateral bond portfolio holds sovereign risk-free assets, then any unit shares or bonds issued by such portfolio would also have a similar credit risk rating, thus enabling the use of these privately issued block chain ledger securities to be pledged as collateral for SME credit and project finance.

This invention provides a new method for creating a secure means of monetary exchange in which users are able to trust and verify the value of this currency or security, by an innovative method that involves biometric user identification to join a private secure network, where one is able to invest, trade and obtain financing for unsecured SMEs and other meritorious new projects. Such merits are to be priced and evaluated by independent and securely verified users of the BitBond trading computer system, based on parameters driven by yield to maturity, coupon interest rate payable and value of the underlying collateral portfolio of securities, or individually pledged securities to the collateral trust. Different embodiments of this invention may be scaled-up to a sovereign-sponsored portfolio of government UK Gilts and/or US Bonds, or scaled-down to a corporate asset collateral trust, and all the way down-scale to an individual peer-to-peer private collateral trust used for crowd funding. This invention solves the needs for financing all kinds of SMEs.

The block chain currencies of the prior art are not convertible into any fundamental underlying assets, therefore we see wider price fluctuations in bitcoins than those for potential stable underlying hard assets, like for example gold. Therefore, in addition to its speculative stage of development, this risk-volatility has rendered digital currencies unable to more fully satisfy the large-scale demands for storing long-term value. Even the most secure encryption protocols have been hacked in the bitcoin market, leaving investors doubtful about its long-term prospects, given cyber security issues.

The present invention is an improvement over the entire body of prior art by providing an innovation that had not been apparent to those expert in the art, by disclosing a system and method for creating an encrypted and secure collateral bond trust, which then issues physical collateral bonds and digital unit shares, within a private computer and network system for authenticated, vetted, fully on-boarded counterparties, within a private network of biometrically validated mobile users. The preferred embodiment of this invention is that of an investment trust that is established together with a secure privately managed network, designed to create secure primary credit-enhancement market for SMEs and also for many key projects in infrastructure, providing secure transactions within a secure mobile or desktop network. The use of a cross-collateralization physical structure that gives to a block chain digital financial instrument, the ability to convert into underlying assets has never been done before, as research for this patent may demonstrate to those experts in the art.

This invention discloses a system for collateralizing credit transactions by issuance of a new type of digital security, which hereto had never been issued nor traded in any market. The creation of the construct of this invention involves computer hardware, network hardware and software coded algorithms, especially designed to incorporate biometric authentication within a mobile application. This system incorporate novel features for issuance of collateral guarantees, which incorporate all borrower and lender information in a block chain ledger; along with issuance of new certificates by digital encryption in a second block chain ledger.

If the blockchain currency price fluctuates randomly based on market perception and news, then the long-term value of that asset as a vessel for investment is significantly reduced. Therefore, such digital currencies are likely to have limited acceptance and could lead investors to significant losses of capital. On the other hand, block chain collateral bonds provide a new solution to the problem of creating a new digital monetary system security, capable of providing long-term value stability and convertibility into any possible asset. This invention discloses a method and system for creating a digital bond which is digitally linked to a physical collateral trust, where any underlying asset guarantee may be held by a regulated trustee, to administer any conversions into the said collateral asset trust by holders of the block chain bonds and, providing an underlying sovereign asset reference of stable value. In view of the preceding, the present invention was specifically designed to provide a means of overcoming these problems.

The preferred embodiment of this invention may be scaled-up to a central bank sovereign facility which is structured to issue block chain collateral credit enhancement guarantees for SME and project finance, or scaled-down to a collateral trust set up by a company in order to pledge certain assets and raise capital to finance growth.

This invention is used for financing SMEs and other scalable projects: from central bank finance to peer-to-peer crowd funding by disclosing a construct that had not been apparent to experts in the prior art. The system provides user authentication and transaction secure verification; by integrating two block chain ledgers with a secure encrypted network system and a physical collateral investment trust. This invention enables those expert in the art, to understand how to develop a computer network system using code software algorithms for cross-referenced user authenticated transactions by: (i) operating digital algorithms between a user block-chain ledger, (if) a collateral bond block-chain ledger and (iif) a collateral asset trust; which together with (ivj a biometric mobile secure network, create for the first time (v) a new digital encrypted credit-enhancement security called BitBond.

There is a unique financial arbitrage opportunity to cross-collateralize valid lower-credit borrowers by implementing a collateral bond fund trading system for credit-enhancing viable projects. This invention creates a computer network system using a block chain ledger collateral bond fund trust and trading structure, which improves the credit rating of SMEs and project borrowers and at the same time, creates a viable income fund portfolio for investors. This invention discloses the first use of block chain technology for the creation of a collateral bond funding and trading system. There is an important improvement over prior art provided by this block chain application together with a mobile smart telephone trading secure network system. This application discloses a new type of electronic, computer-based system for financing a new generation of SME emerging start-ups and many types of project finance.

An arbitrage opportunity exists because SMEs and project vehicles are willing and able to pay market rates for corporate debt, which have historically been much higher than the risk-free rate by definition. So, there is an implicit interest rate spread that can be captured by the collateral bond trust fund by issuing its collateral bonds and collateral unit shares at market rates but offering access to credit, which would otherwise not be available to the counterparty investing in the privately placed securities by the collateral bond fund trust.

In England as in most advanced economies, the final lending decisions are made by private bank actors, which as it has been proved by repeated experience in financial history, do not necessarily make their SME and project lending decisions based on merit and real economic priorities, but use instead restrictive bank-biased credit analysis for lending within an established universe of credit-approved counterparties. This means that a majority of lower rated, yet viable emerging small and medium enterprise projects do not receive credit funding. This is a problem since many key sectors of the economy require credit liquidity to stimulate growth. Bank credit market liquidity for the private markets in the UK is a key policy priority for the Bank of England and yet, banks fail to provide sufficient SME credit liquidity despite efforts by the central bank to stimulate lending by commercial banks and institutions.

The present invention discloses a new private bond trust fund and trading system, which is an improvement over prior art in the field of fund management, computer science and financial administration of trusts. The preferred application reveals an important credit market insight, which hereto had not been apparent, for capturing a unique credit-arbitrage opportunity that exists in today's financial system. The preferred embodiment of this invention is that of an investment trust that is to be established together with a secure privately managed network, which is designed to create a private and secure primary credit-enhancement market for SMEs and also for many key projects in infrastructure.

This system provides an improved application of the open source blockchain ledger prior art platform for secure private transactions. The system that is designed to capitalize on a credit market inefficiency, by structuring a collateral bond trust which issues its own collateral bonds and credit enhancement unit shares within a private computer network system for authenticated, vetted, on-boarded counterparties.

An initial goal in this field for me as the inventor was to incentivize investment by high-networth immigration investors under the Investor Tier-1 category in the UK, derived from my personal experiences and the realization that many immigrant investors are ill served by many immigration-advisors.

As an inventor, I first realized there is a need in the market for this computer network trading solution after personally having witnessed in the UK, a current and unacceptable situation for high net worth clients being forced by immigration investment rules to invest in UK gilt portfolios whereby many wealth managers simply ask their clients to top-up their U K Gilt accounts, as they know that the U.K. Gilt position may erode due to market fluctuations in interest rates and other market risk exposure, since these accounts are typically never hedged.

There is a very substantial amount of capital being held in sovereign Gilt accounts on behalf of immigration investors in the UK, which is not directly contributing anything to the real economy or to the SME private market. Therefore, the presence of very large capital inflows into the UK in the form of immigration investment provides an ideal opportunity to structure an investment fund under the presently disclosed embodiment of this invention. Such a fund would be able to provide a significant number of credit enhancement transactions and would stimulate an important number of British (or any other financial system] SME companies and private projects that will have a stimulating effect on the economy and may capture a portion of the value of these very large capital pools, which are otherwise eroding in value every day. These collateral bonds or BitBonds may be also be structured to pay to an investor a series of payments in a similar fashion to an annuity, by entering into a programed transaction in which the pricing of the collateral bond is valued so as to match the effective yield to maturity required by the investor.

This feature may provide stable and predictable cash flows to investors in the collateral bond fund portfolio. The relative pricing range offered to investors will be determined by the underlying UK gilt and US treasury portfolio current and projected future yield curve structure for the same period of duration than the transactions being priced. Interest rate market fluctuations over the time period of the issued bonds represent risk for typical bond portfolios in the marketplace. This invention is designed solve a key problem by disclosing an important new system in finance embodied in the preferred application by a computer trading system and software protocols. Since the preferred embodiment of this invention would price each transaction privately with each holder on a long-term basis (in a similar fashion to an annuity] then it is possible to price into such private transaction, the carry-cost allocation in terms of interest margin necessary to hedge and balance the portfolio. Therefore minimizing the interest rate volatility both for the investor and also for the portfolio, since both of its long-term positions would be hedged.

The collateral bond portfolio would naturally be exposed to interest rate market fluctuations of its primary holdings of UK and US treasury bonds. Therefore, the implied risk entered into by issuance of each private collateral bond position is equal to the relative spread between the portfolio carry-cost basis over the expected period and the contracted yield priced at the time of issuance of each one of its collateral bond securities. The collateral bond portfolio would issue its own securities at its own pricing levels, which reflect the required carry-cost spreads to cover all of its costs and risks and which are above and beyond the average returns in the sovereign debt securities markets.

The portfolio manager is able to achieve such higher pricing for its own securities, since it is here that there is a wide pricing arbitrage opportunity exists between the private and public markets, which the collateral portfolio manager captures by issuance of its collateral bond units at much higher spreads than would be otherwise possible by its internal return on the Sovereign security portfolio it holds as collateral and enabling thereby payment of contracted yields. Collateral bonds are at the core of an IT secure transaction and trading system, designed to capture an arbitrage opportunity and capitalize a rare debt market inefficiency which exists between Sovereign investment grade debt securities and public company debt securities. Given the mathematical models used in finance to price securities, sovereign debt is highly credit rated and is used to benchmark what are labeled risk-free debt securities.

In the macro-scale embodiment of this invention for central banks, there could be for example, a UK sovereign collateral bond trust portfolio for energy and another specific ones for housing, infrastructure, science, quantum computing among many other key policy priority sectors in the economy. Each trust embodiment of the collateral bonds may be customized to meet credit demand for funding in industries that the relevant central bank finance policy considers a top priority. The magnitude of this structural sovereign credit-arbitrage opportunity is immense. Many countries are holding vast capital reserves in the form of United States treasury bonds. China alone is reported to hold US$1.2 trillion in treasury securities. Japan follows closely with US$1.1 trillion. If we go down the list, we find an approx, total US$6.2 trillion dollars that are basically sitting idle in diverse central bank accounts around the world. This invention discloses a collateral bond trust fund trading system which is structured by implementing a sovereign debt cross-collateralization investment structure that could drive substantial direct investment, greater credit accessibility and better credit finance for small and medium enterprises, stimulating economic growth by funding new projects.

This integrated system will deliver a new class of credit enhancement guarantee, by implementing the coding of the computer software algorithms required for digitally securitizing credit quality collateral guarantees, and issuing these digital collateral guarantee securities, by means of a new method for implementing block chain ledger registering of encrypted digital transactions. In order to more clearly illustrate the technical solution of the embodiment of the present invention, it will implement the following figures for the cases described in the need to use a simple introduction. The following descriptions of the preferred embodiments of this invention do not limit in any way additional applications to other types of embodiments of the present invention.

While this invention is susceptible to embodiments in many different forms, there are shown in the drawings and will be described in detail herein below, the preferred embodiments of the present invention. It should be understood, however, that the present disclosure is to be considered an exemplification of the principles of the invention and is not intended to limit the spirit or scope of the invention of the embodiments illustrated.

This system teaches those who are expert in the art of fund and investment management, as well as those expert in UK Immigration Investment, a new credit guarantee sysem that is designed to be compliant with UK regulations. An improvement over prior blockchain art, is to use a collateral trust to issue digital block chain securities, convertible into an underlying collateral held in the trust, for example sovereign bonds (UK Gilts and US Treasury bonds); as well as may convert into any other acceptable asset with financially defined collateral value. The specification describes how to create and operate a convertible digital credit guarantee system, which is constructed using a collateral investment trust.

Blockchain Zero Checksum Trading System

Description of the Drawings

While the invention is susceptible to embodiments in many different forms, the preferred applications for this new use of the open source blockchain code as had not been apparent.

Zero checksum bonds are shown in the drawings herein below, and will be described as preferred embodiments of the present invention. It should be understood, however, that the present drawings are to be considered an exemplification of the principles of the invention and are not intended to limit the spirit or scope of the invention by the embodiments illustrated. The figures provided below are descriptions and examples of selected embodiments, which are described as follows:

Figure 1

1A Front-end security application

IB Collateral Bond Trust is structured with a conversion feature, designed to give blockchain BitBond units with the option to convert their value into the proportional underlying assets, held at the trust and which are registered in the trust indenture.

1C UK Gilts and US Bonds are acquired in a portfolio balanced for duration to provide stable and long term principal protection and sovereign asset current yield.

ID Desktop client application is downloaded, in order to establish an encrypted end-toend secure https connection with BitBond server.

IE The user enters IE Biometric data on a mobile/smart phone.

IF A back end API (application programmable interface) runs a background and credit checks on user, applying KYC profile information and the biometric data for validation.

1G User credentials authenticated and registered in an encrypted block in the user ledger 1H A unit of collateral asset trust is issued, encrypted and registered in BitBond ledger.

II Registry of the blockchain unit is registered in the collateral trust for conversion.

1J The BitBond Blockchain ledger is updated to reflect issue and true BitBond.

IK The Bitbond User ledger is updated to reflect validated user credentials.

IL A crosscheck hashing algorithm validates blockchain by zero-sum algorithm.

Figure 2

2A Mobile user ID authentication and protocol for true user session ID credentials 2B BitBond server and network communications, firewalls and client management 2C Biometric ID credentials

2D Smart phone provides IP and other user authentication information to system 2E Internet http wireless network communications for unsecure http messages 2F Hardware firewall blocks all connections without valid user session ID token 2G Encrypted session ID token is issued to user by the system

2H this system encrypts and registers each user ID and credentials in a blockchain ledger.

A time-stamped user-encrypted-session-ID is issued only IF the difference between two ledger's Fourier time-domain pulses equals absolute ZERO. A very fine difference, which is possible to use as an improvement over prior encryption art, by providing a new technique to guarantee security to a high-degree of precision.

Each one of two time domain pulses must match that of the other blockchain ledger exactly. Identical time-domain pulses are calculated for each blockchain ledger and these two must be identical up to 10 decimal places (or more with the advent of Quantum computing, which will make it necessary to require quantum precision up perhaps 1χ10^Λ-32 or as close to one day in the future, perhaps using the Planck time unit (?) 5.39x10^Λ-44 - That is the potential which may one day be achievable by Quantum Qubit calculations!)

So, in order to guarantee the integrity of the matrix gestalt or Langrangian of these two related blockchain ledgers. Each BitBond transaction must equal the time-domain pulse resulting from Fourier integration of encrypted user data in the second ledger; so that any discrepancies between the encrypted blockchain of the BitBond and user ledgers, would inevitably result in a value other than 0.000000000 (10 decimal places or more of absolute zero) and therefore, identifying invalid or hacked transactions immediately and which are then rejected and processed for security, compliance, reporting and management of related users.

2J SOAP or API interface with KYC/AML user credit check system

2K the system automatically authenticates BitBond ledger entries by crosschecking each block in the chain against user ID session information, registered in the user blockchain ledger. All BitBond securities transactions are linked to their related user blockchain session credentials for each transaction. Algorithms using matrix calculations integrate the entire BitBond blockchain segment within a time-stamp frame and perform the same on the user block chain ledger for the same timestamp window.

2L wireless network communications for http unsecure system messages to users; used for client portal denial of access due to invalid credentials and website hello page.

2M the encrypted session ID is issued as described after the authentication procedures described in 21 hereinabove.

2N a BitBond true user ID cypher is generated upon successful validation of user KYC and AML background-check, for which the user has had to give his biometric authorization to complete on his behalf upon initial registration in the system. Upon initial registration in the system, each user has to be validated by the background SOAP/API that is able to run an international background check in real-time mode (delays or red flags will deny or delay user initial authentication, which will be completed only when verified or rejected and flagged for risk.) This session cypher will be valid for secure https communications between the client application and the BitBond server, providing user log records that are encrypted into the session ID

In case the absolute zero-algorithm rejects a user and BitBond block related transaction, and then the system flags the user and his credentials, as well as the related BitBond block and refers it for user investigation and system risk-flag evaluation. Once that happens, the process is terminated and an unsecure http message is sent via Internet to the user, causing the process to terminate and STOP.

Figure 3

3A Biometric ID processing system

3B Encrypted session-ID

3C Absolute Zero crosscheck security algorithm programmed firewall

3D Physical collateral trust administrator, usually an FSA authorized person or Bank 3E IT Management secure network for system administration

3F Mobile / smart phone client application for encrypted communications and including biometric authentication user inputs, which could include a finger-print taken with the sensor button of many phones, or by taking a photograph and uploading into the secure application. There may be an embodiment for a smart-phone pack for ID.

3G Desktop based client application for encrypted communications and also including options for secure documents upload, including official documents and photographs.

3H User ID background API application interface for cloud-based background checks.

Https secure connection downloadable client application for system users.

3J User information, including background and logs in No. 2 blockchain ledger 3K BitBond secure trading system server, fulfilling buy and sell orders in a secure system. 3L Transaction validated convertible trust unit shares in No. 1 blockchain ledger

Figure 4

4A Captive Insurance investors who must hold large pools of capital in UK Gilts to meet insurance regulatory requirements by maintaining long-term sovereign bond holdings, which have historically performed significantly below other asset classes due to their excessive credit quality versus current yields along the curve.

4B This system capitalizes on this risk-reward systemic inefficiency, which locks up immense surplus credit quality in pools of money which are performing relatively poorly, compared to the innovative use this system provides for such pools of sovereign grade, or risk-free UK /US bond guarantees defined by the financial system.

4C Immigrant investors who invest in the UK through the Tier-1 visa Home Office program for direct inbound investment, hold large pools of UK Gilts in bank accounts, which are typically not hedged and thus perform on average very poorly.

4D Just like there are large institutional pools of regulatory capital held by investment management institutions, there are also a very large number of small captive insurance companies who need regulatory capital to operate their insurance coverage companies. This system provides an ideal asset, which is backed by the full credit of the sovereign collateral.

4E In a similar way as captive insurance companies, small banks also require regulatory capital for compliance with currency authorities, so they are always demanding capital in order to meet reserve rules for their operations and offer a solution to their needs.

4F Collateral bond investment fund holds the sovereign bond asset guarantees.

4G The physical collateral asset fund structured as a trust and held by a custodian bank and administered and managed by an FSA person approved fund manager expert.

4H Collateral asset trust unit shares are issued and registered by encrypted entries into the BitBond blockchain ledger, authenticated by automated system procedures.

BitBonds may be stripped and separately trade the principal and the digital blockchain interest coupons. This feature enables custom delivery of solutions to both, users who need to guarantee long-term repayment of a principal sum, which would now be collateralized by the underlying UK Gilts and sovereign bonds held by the collateral trust; and which would make the BitBond blockchain units, convertible into the actual underlying securities in certain cases, which are specified in the collateral trust indenture and implemented by the system.

4J BitBond blockchain securities may be stripped of their coupons, granting to the holder of such interest strips the right to receive a stream of cash flow, payable by the trustee to the holders by physical trust procedures, similar to those implemented in an Annuity or bursary instrument, which in another embodiment of this invention, may be customized for different uses, including paying for university or school, paying for pensioner retirement among others.

Figure 5

5A Sovereign UK Gilts and US Bonds risk-free yield reflecting no risk spread premium.

5B High quality corporate bonds, reflecting on average from 400 basis points (one bps equivalent to 1/100 percent) 800 bps spread, from historical average risk-free sovereign bond yield levels.

5C Bonds issued by lower-quality credit rated small and medium enterprises' bonds, priced at 800 bps to 1,000 bps spread from the risk-free asset class.

5D Secured Senior loans and mezzanine types of credit issued under stringent collateralization conditions and priced typically very high, at average interest rate spreads ranging from 1,000 bps to 1,600 basis points or 16% interest rates.

5E There is a wide interest rate pricing arbitrage opportunity between the risk-free rate and the credit pricing for unsecured low credit borrowers, possibly ranging between 600 bps and 1,200 basis points, which means that 6% to 12% profit margins are possible for system.

Figure 6

6A Block Chain user ledger, incorporating Biometric and user credit background data 6B Physical collateral trust opened and managed by portfolio manager and trustees.

6C User blockchain ledger, incorporating all encrypted trust unit share transactions.

6D BitBond secure trading platform which prices the securities and matches trades.

6E Pricing algorithm, which keeps mark-to-market valuation of collateral trust units.

6F Underlying asset portfolio mark-to-market real time valuation of all securities.

6G Trade matching system for bringing buyers and sellers together in the system.

Figure 7

7A Desktop based client application for encrypted communications and also including options for secure documents upload, including official documents and photographs.

7B Mobile / smart phone client application for encrypted communications and including biometric authentication user inputs, which could include a finger-print taken with the sensor button of many phones, or by taking a photograph and uploading into the secure application. There may be an embodiment for a smart-phone pack for ID.

7C Secure validation of users and transactions is automatically performed by this system, by using the zero crosscheck algorithms to validate all transactions in two twin-ledgers.

7D Https secure connection downloadable client application for system users.

7E Transaction validated convertible trust unit shares in No. 1 blockchain ledger

7F BitBond secure trading platform which prices the securities and matches trades.

Figure 8

8A A physical collateral asset trust fund that is compliant with UK Tier-1 visa laws.

8B A portfolio of UK Gilts and US Treasury Bonds held and managed as collateral.

8C BitBond encrypted blockchain unit trust securities issued digitally.

8D BitBond blockchain securities to credit-enhance bank loans for construction sector.

8E Commercial bank accepts the BitBond collateral units to secure construction loans.

8F Blockchain collateral units or BitBonds issued as credit enhancement guarantees.

8G UK housing construction projects are collateralized with asset backed BitBonds.

Figure 9

9A An alternative embodiment of this invention includes the possibility of setting up a private small-scale system, by using alternative methods to create an acceptable collateral, which can be managed by authorized, authenticated users of the system in order to create a crowd funding campaign, which would provide to all small investors an new level of security and trust. Facilitating fund raising campaigns by introducing new system of guaranteed valid securities.

9B This system contemplates the alternative service for authorized and accredited users, like SME entrepreneurs to conduct more effective and secure fund raising campaigns. Instead of the larger scale collateral trust fund, any asset of authentic intrinsic value and acceptable to other users in the crowd funding embodiment, may be used as collateral in order to create a comparable small-scale system for crowd funding.

9C Blockchain securities are issued by the system for crowd funding transactions.

9D Investors may use the blockchain securities issued by the system, hold them, trade them or convert them into the underlying pledge assets in the system.

Figure 10

10A Immigration investors under the Tier-1 UK Visa program need to invest in UK Gilts 10B A special purpose collateral trust fund is set for Home Office compliance by Investors 10C Blockchain securities issued by this system, may be used to set up an Education annuity or bursary, for payment of children's education of Immigration investors.

10D BitBond interest rate strips may be created to fund education costs in the UK

10E Sovereign holders of UK Gilts and US Bonds are usually Central Banks

10F A large-scale embodiment of this invention is used for Central Bank fund management

10G BitBond system is used to issue Sovereign Credit Guarantees to stimulate economy

10H Credit enhancement of loans and collateral guarantees are provided to large projects.

101 In another alternative embodiment, Immigration investors or any kind of investor implements the system in order to issue credit enhancement guarantees for SMEs.

10J BitBond system is used to issue jumbo-principal sovereign collateral guarantees.

10K Large blockchain trust units may be securitized among retail investors in the system.

Figure 11

11A BitBond unit trust blocks issued and validated as true with SIDOON padding block

11B User Bitbond data and log records cross-referenced to BitBond blockchain ledger

11C Fourier Fast Transform of BitBond blockchain ledger = K1

11D Fourier Fast Transform of User blockchain ledger = K2

HE Absolute zero checksum algorithm validates ledger as TRUE = 0.00000000

11F Difference equation yields proof of INVALID or TAMPERED blockchain, then REJECTED.

Figure 12

12A There are very large pools of capital held in UK Gilts and US Treasury Bonds in the global markets. Most of this capital has experienced low yields due to quantitative easing monetary policy during the last few years. Holders of risk-free sovereign assets are motivated to seek improved performance for their portfolios.

12B Tier-1 UK Visa Immigrant Investors have large holdings in UK Gilts for compliance.

12C A preferred embodiment of the collateral trust fund disclosed herein.

12D An improved blockchain ledger strategy using two ledgers for high security, comprising the method of construction disclosed in the preceding figures.

12E Four different embodiments for potential applications of this improved blockchain ledger technology, which include: (i) Paying for the education of Tier-1 Immigrant Investor's children in the UK; (if) Credit enhancement for housing construction and other project finance; (in) credit enhancement and collateral for SME loan transactions: (iv) crowdfunging applications, in an embodiment used for peer-to-peer lending and using a downscaled version, which can be implemented privately as well.

Blockchain Zero Checksum Trading System

Introduction to the Drawings

Figure 1

A system level block diagram illustrating the preferred embodiment of this invention, in which there is a physical collateral trust set up at a regulated institution, for the purposes of pledging some real asset as a convertible security of the block chain bonds which are issued by the system. The trustee uses the charter instructions of the trust to issue trust unit shares, which are in effect transformed into block chain bonds by means of implementing the digital and encryption procedures provided by this system.

Figure 2

This diagram illustrates for the preferred embodiment of the present invention from a block flow chart perspective. We see a graphical representation of a block chain collateral bond secure trading system, including the mobile application, the authentication procedures and the existence of a physical collateral trust system.

Figure 3

Bitbond ledger absolute-zero crosscheck algorithm verification flow-chart, illustrating the key processes disclosed by this invention to create a new generation of blockchain secure transactions, which due to the inclusion of a higher level of encryption security and the incorporation of the user records into the blockchain, it should open the doors for wide regulatory authorization and adoption in many markets, as this system solves an urgent need.

Figure 4

This figure illustrates a fully developed BitBond system and related investor and user markets. There are large pools of capital in the form of UK Gilts and US Treasury Bonds, being held as regulatory capital by myriad captive insurance companies in the UK and around the world. In addition to Immigration investors who pursue the Tier-1 Visa in the UK, must hold UK Gilts for compliance and regulatory purposes, so there is large pool of capital in this category.

Figure 5

This invention teaches to those expert in the art of fund management and investment operations, how to construct a digital blockchain securities system, which had not been evident before, and in order to construct a computerized and physical collateral trust structure, to securitize or sell securities in the blockchain digital form, priced competitively as compared to existing credit risk pricing, but still enabling a very wide margin for profit opportunities that are generated by selling blockchain collateral units to diverse holders, who are willing to pay interest rate spreads ranging from 600 bps to 1,200 bps (in a conservative and competitive view) in order to meet their credit enhancement and collateralization needs.

Figure 6

In this block level system architecture chart we can see the interaction between three fundamental pillars of this new system: (i) the blockchain encrypted ledger which registers and incorporates collateral trust unit transactions; (ii) the user blockchain ledger in which all user logs and credit information is incorporated and securely registered and (iii) a physical collateral trust administered under a bespoke trust indenture setting forth the convertibility, principal guarantee and other features of the system; (iv) the pricing algorithm process which maintains a mark-to-market valuation of the trust underlying assets, which is directly reflected on a real-time basis on all BitBond digital blockchain units in the trading system and; (v) the trading system utility which creates matching transactions between valid users.

Figure 7

All digital collateral transactions are permanently stored in both a user electronic block chain ledger database, and also in a BitBond user block chain ledger database. Every digital guarantee block chain transaction is crosschecked and validated by automated hash algorithms, in order to trade block chain collateral units securely and within a mobile biometric-ID platform. In the creation of this new construct, there are two pillars for building this system. The first one is an encrypted block chain ledger of authenticated users, which includes cross-checks for AML/PEP and credit score parameters, built so as to incorporate biometric, GPS and IP identifiers of identity by means of a mobile network system platform using smart phones. The second pillar is an encrypted block chain ledger of convertible unit shares, which have been issued by a physical collateral bond fund trustee, to grant a credit guarantee to any authenticated bearer of these digital securities.

Figure 8

In one of the preferred embodiments disclosed by this invention, we see the use of this system within the immigration investment sector in the United Kingdom. In this case, investors invest in UK gilts and US treasury securities, which are then held in trust. The trustee issues then unit shares, which are convertible into the proportional underlying assets held in the trust. The system then authenticates and validates each unit share, which are then entered into the block chain ledger, validating the records in the collateral trust and the records regarding each one of the holders for each block chain bond. In the second embodiment, we see the use of the block chain system for a sovereign collateral bond trust, which would then be able to issue unit shares that are designed to become credit enhancement block chain bonds.

Figure 9

One of the regulatory limitations for wider central bank approval and adoption of prior-art bitcoin lending schemes is the fact there is no record or credit information on the lenders and especially on the borrowers due to the very private and decentralized nature of existing bitcoin schemes. In this type of prior-art web-portal crowd funding system, identity verification is by definition practically non-existent, as there is not proper credit analysis or due diligence in order to establish the true identity of all counterparties. As an improvement over this prior art and by intentional design, no money or existing prior-art electronic-wallet bitcoins are to be issued directly by this system.

Figure 10

This diagram illustrates a new type of credit collateral security, which is issued for banks and which may directly use SME and project finance and which and insurance companies are regulatory capital and as collateral. In the third embodiment of possible scaled-down versions of this invention, we see the use of a collateral trust set up by private individuals in which they are able to pledge a private asset as guarantee for the issuance of the resulting block chain bonds. This third embodiment will enable the creation of private peer-to-peer systems for lending and for conducting other private transactions, within the most secure and transparent system for lending and for providing credit guarantees as part of a more robust private peer-to-peer system.

Figure 11

This diagram illustrates mathematical foundations and formulae for the preferred embodiment of this invention. An innovative application of a new kind of zero-checksum algorithm is to be understood as product of an absolute zero difference equation (not differential,) a simple equation comparing two FFT coefficients as described herein between two blockchain ledgers that are indexed and cross-referenced.

It has been known in the public domain since 1965, to those experts in mathematics and manipulation of data sets (or secure encrypted data sets, in the case of this innovation), that a Fast Fourier Transform (referred to as FFT) computes the discreet Fourier Transform (DFT) of any data series. In this case, we have potentially a very large series of hexadecimal or binary characters, which comprise each one of two, related and cross-referenced and encrypted blockchain ledgers, as detailed herein above.

The automatic application of this algorithm, transforms each one of two large series of hexadecimal and/or binary characters, which comprise the blockchain ledger being analyzed for security and data integrity, into two time-domain pulses which are the product of the FFT calculations. This algorithm rapidly computes the Fourier transformation by factorizing each one of two DFT matrixes into a product of mostly zero factors; thereby reducing the complexity of the calculations and producing zero-factor coefficients, which are further integrated into a single time-domain pulse, for each one of two blockchain sequences, and which represent each one of the entire and complete data sets, including all fields related to user information, logs, transaction information, time stamps, unit share issuance, pricing at closing of buy and sale transactions plus a new kind of zero-checksum verification field.

The use of FFT allows fast computation of very large data sets, as expected to be the case in both blockchain ledgers. This algorithm uses 0(N Log N) operations, instead of computing 0(Ν^Λ2) operations, thus enabling fast calculations of large encrypted data sets. This is supported by the assumption that θ'^2π/^Ν is an N-th primitive root of unity.

The FFT general formula (invented by Tukey and Cooley in 1965 and in the public domain ever since] is given by the following: Let [K_o ... K_n] be a series of binary or hexadecimal encrypted characters, then:

N-l

Χκ=Σ Χηθ^12πΚ ^/Ν n=0

This is referred as the FFT Transform. Once the system calculates K1 and K2 (each one representing time-domain DFT] for each one of two cross-referenced blockchain ledgers, referred to as BL1 and BL2 then a difference equation is applied:

Given {K n} °° determine the First Difference by the equation:

Δ(Κη) = Κ„₊ι-Κ„

The algorithm continues to analyze the Second Difference by the equation:

Δ²(Κη).Δ(Κη + 1)-Δ(Κη)

The absolute difference between the DFT of BL1 and DFT for BL2 is given by:

AK(a_n)=AK-i (a_n+i]-AKi(a_n) =Σ(^κτ)(-ΐ)^τ a_n+K-_T

This Absolute Zero security test is applied by the formula:

ABSAK₂-Ki = 0

This absolute value of difference is then evaluated for precision. The system will reject and invalidate blockchain ledger block twin-pairs, which result in absolute differences >0.000000000, in the intelligence that the precision parameters may be adjusted by the system administrator, and thus provide a new method for validation and authentication of blockchain BitBond transactions and users.

Figure 12

This diagram shows three different embodiment applications for this system. Transactions are matched and closed, based on a Pricing and Valuation which is based on the mark-tomarket value of an underlying asset portfolio that is held and managed by the collateral trust, which is described in detail in the other 11 figures as disclosed herein by this invention.

By means of financial management operations of the collateral trust disclosed herein, the embodied portfolio of UK Gilt and US Treasury bonds, this algorithm provides caclulations of the Net Asset Value or NAV of such collateral guarantee portfolio and broadcasts on the secure network to all blockchain units that are open for issuance, buy and sale transactions. The following formulae, which are in the public domain and are known to experts in fund management and trust administration, is applied automatically in real-time by this system:

BitBond NAV may use guidance for real-time portfolio valuations by the formula:

N c=£Xn+M

And the Pricing for BitBond units, guided by:

C X [1 - [1/(1 +yQ^N] / y + M/l+yj]

C = Bitbond interest payable to vetted and authorized holder y = Yield to maturity (which must be greater than i in order to be profitable)

N = Number of Payments

M = Value at Maturity yi = An all-in required return rate, which is determined to include:

trust fund administration costXi% + insurance cost X2% + X3% hedging cost + required return (Ke).

Blockchain Zero Checksum Trading System

Claims

1. - The use of an absolute zero checksum blockchain security algorithm that calculates fast Fourier integral-transforms for each of two interrelated blockchain ledgers, so as transform all encrypted blockchain information into two time-domain pulses; which are then compared by a computer so as to calculate any fine differences within a scale of precision ranging 1χ10Λ-10 to 1χ10Λ-32 in order to guarantee high data-security.

2. - The method for a mathematical encryption-verification algorithm by means of which transactions recorded in two related blockchain ledgers are authenticated for security by Fourier transformations. The frequency value of each one of two twin-encrypted ledgers is digitally transformed into a time-domain pulse of a highly precise value; which must exactly equal the time-domain pulse resulting from Fourier integration of the encrypted user chain in the second ledger; so that any discrepancies between the encrypted time-pulses of these two blockchain ledgers, would mathematically result in values other than 0.000000000 (10 decimal places or more absolute zero) and up to 1χ10Λ-32 precision, and thus allowing security from future quantum computing power.

3. - A new kind of blockchain collateral guarantee securities, which are created by incorporating two encrypted ledgers, of which the second ledger records all buyers and sellers of each blockchain collateral unit for the purposes of incorporating background credit information and transaction cross-references; and in order to provide a more robust regulatory compliance-platform for blockchain securities.

4. - An application of validation hashing-algorithm architecture, used with a dualblockchain ledger, for automation of validation and authentication of all blockchain units by crosschecking each transaction and each related users; and using Fast Fourier Transformations to analyze the authenticity of all blocks in the two ledgers;

5. - The software architecture for issuance of digital unit shares, issued also in physical form by the administrator of a collateral investment trust; encrypted in a dualblockchain ledger by using a zero-cross check algorithm to verify: (i) the first ledger recording blockchain security transactions and (ii) a second ledger, recording secure, authenticated and credit-checked users;

6. - The preferred embodiment of this system, incorporating one or more claims 1 to 5 and used for the purpose of creating a UK immigration investment compliant collateral trust, which securitizes the sovereign credit quality of UK Gilts and other assets, held as collateral by a collateral asset fund, or by any private fund for immigrant investors.

7. - The system of claims 1, 2, 3, 4 and 5 for issuance of digital blockchain collateral units for the purposes of collateralizing all types of loans, as well as for pledging as regulatory capital and as a new type of digital credit enhancement security;

8. - The resulting construct of claims 1, 2, 3, 4 and 5 in order to issue collateral credit guarantees by the compliant trust administrator, on behalf of (ij UK Tier-1 visa investors, (ii) Small and Medium Enterprises; (iii) private, institutional or Sovereign investors; (iv) credit guarantees for construction of housing projects in UK.

9. - The system of claim 3 for the purposes of promoting UK direct investment; and for the purpose of collateralizing all kinds of private loans; using the digital securities created by this system, to collateralize loans, pledge the blockchain securities as regulatory capital and trade them by buying and selling them from a network of authenticated and credit-checked users;

10. - The computer and secure network system for issuance and management of collateral trust asset units by authorized users, who trade the blockchain securities of claims 1 to 5 in buy and sale transactions, which are priced by software algorithms that automatically update the collateral trust with mark-to-market values of the UK Gilts and/or other securities; which are convertible into the underlying assets held in the collateral trust and issued by this system.

11. - The method for secure validation of first blockchain ledger of claims 1 to 10, which is to cross-reference a first ledger to a second block chain ledger used to record every user that is validated in the system server, every time there is a buy or sale transaction of collateral trust units; implemented by means of a zero checksum hashing algorithm.

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Property

Office

Application No: GB1701423.4 Examiner: Mr Christopher

Robertson