Bitbon System as a Separate Independent Asset

(Description from patent No. PCT/UA2017/000050 “The Method of Management of Property Rights to Assets and the System for Its Implementation”)

By its nature, Bitbon[1] is an instrument for implementing the method of management of property rights to Assets and is a key component of the system for its implementation.

The Bitbon System[2] is related to the information technology that is intended to be used in the financial and law fields, for business management, management of rights to Assets, evaluation of property rights to Assets, transfer of property rights to Assets of various types, including movable and immovable property, machinery and production equipment, bank deposits, copyrights, financial instruments, securities, know-how, trademarks, shares in statutory funds and in other companies, shares in various projects with legal entities and individuals and other assets.

One of the tasks of the Bitbon System is to increase the efficiency and functionality, security, fault tolerance, storage reliability of information on property rights to Assets by optimizing the management system of property rights to Assets and applying innovative software and hardware solutions. Also the task is to create a convenient and effective digital way of redistribution, transfer, accounting and management of property rights to Assets.

This method of management of property rights to Assets foresees executing a transaction and recording the completed transaction in the Blockchain.

The method of management of property rights to Assets has been successfully implemented in the Bitbon System, which includes a network of hardware-software complexes containing the Blockchain, data on nominal value, Bitbon System User identifiers, data on transaction history, exact time module, transaction processing module, publication module:

Blockchain (contains data on Accounts[3] of the Bitbon System Users[4], as well as the Projectbon Public Contract[5], evaluation of nominal value of property rights to Assets).

Ledger object identifier generator (a separate device with the ability to interact with an exact time module using cryptographic algorithms of data processing).

Exact time module (provides synchronization with the network-wide time of the hardware-software complexes network, which differs from the global time due to the speed corrections of the signal propagation across the network segments between the hardware-software complexes).

Transaction processing module (processes a request to form a record on the transfer or redistribution of property rights to Assets in the Blockchain).

Validation module (allows verifying the correctness of the evaluation results of property rights to Assets, the Projectbon Public Contract, nominal value, Bitbon System User identifiers).

User terminal (a hardware-software complex used to create the Projectbon Public Contract as well as an instruction to transfer property rights to Assets).

Publication module (a pool of hardware-software complexes combined with each other in the network for publishing records in the Blockchain).

FLOW CHART OF THE GENERAL OPERATING PRINCIPLE OF THE BITBON SYSTEM COMPONENTS

System Bitbon

Bitbon as an instrument for implementing the method of management of property rights to Assets is characterized by the following attributes:

  • Identifier — a unique sequence of alphanumeric characters;
  • Nominal value — a positive real number corresponding to a part of property rights to the Bitbon System;
  • Records in the Blockchain, which register all operations with each Bitbon;
  • Bitbon System Public Contract.

Bitbon has the following properties:

  • Ability to split the nominal value with unlimited accuracy is guaranteed. Each fractional part of the nominal value corresponds to a certain part of property rights to Assets;
  • Bitbon is issued in accordance with the Bitbon System Public Contract;
  • Bitbon can be used as an instrument for trading on the exchange;
  • Bitbon can be used for calculating the index or any other financial derivatives, instruments;
  • Bitbon of one Bitbon System User may serve as an Asset of another Bitbon System User;
  • It is guaranteed that any part of the Bitbon nominal value in the form of a new identifier is transferred from one Bitbon System User to another Bitbon System User;
  • Ability to define rules of Bitbon processing before the occurrence of an event which the Bitbon System User (owner of property rights to Assets) specifies limiting the Bitbon application field.

The following components are used in the Bitbon System for implementing the method of management of property rights to Assets:

Blockchain of data on nominal value, on User identifiers, on transaction history, on the Projectbon Public Contract, on the evaluation of nominal value of property rights to Assets, on User Accounts is a network of hardware-software complexes (HSCs), where each HSC is connected to all other HSCs that are part of the network. Each HSC contains a memory and processor. An example of such HSCs can be: a personal computer, smartphone, dedicated server, tablet computer and other types of devices. The memory of each device contains the data of the Blockchain, which is synchronized with other network devices. In such a case, the failure of one of the devices will not lead to the loss of records on property rights to Assets, information on owners and transactions. The Blockchain is configured with the ability to interact with the User terminal and the publication module.

Exact time module is configured with the ability to synchronize with the network-wide time of the HSC network, which differs from the global time due to the considered speed corrections of the signal propagation across the network segments between HSCs. It is a hardware-software device, which includes a free-running hardware time counter adjusted to ensure the network time uniformity on all HSCs using the network interfaces of the Internet. The network time uniformity is achieved by taking into account inaccuracy between the system time of HSCs and the global time related to the speed of signal propagation across the local network segments connecting HSCs to each other.

The exact time module is configured with the ability to interact with the ledger object identifier generator, transaction processing module, validation module, publication module.

Ledger object identifier generator is a separate device using cryptographic algorithms to generate hash codes based on elliptic curves using a generator of random numbers implemented on the basis of a separate hardware solution, which ensures the required cryptographic quality of hash functions.

The ledger object identifier generator is configured with the ability to interact with the User terminal, transaction processing module, validation module, exact time module.

Transaction processing module is designed to perform the request processing procedure to form a record on the redistribution or transfer of property rights to Assets in the Blockchain. It is a pool of HSCs connected to each other in the network.

The transaction processing module is configured with the ability to interact with the User terminal, ledger object identifier generator, exact time module, validation module, publication module.

Validation module is characterized by the ability to verify the correctness and reliability of the evaluation results of property rights to Assets, the Projectbon Public Contract, nominal value, User identifiers. It is a pool of HSCs connected to each other in the network with the implemented ability to interact with the ledger object identifier generator, transaction processing module, exact time module and publication module.

Publication module is characterized by the ability to publish new records in the Blockchain. It is a pool of HSCs connected to each other in the network with the implemented ability to interact with the object identifier generation module, transaction processing module, exact time module, the Blockchain. Only the publication module is entitled to record in the Blockchain.

User terminal is characterized by the ability to create the Projectbon Public Contract, create an order to transfer property rights to Assets. It is a HSC with the implemented ability to interact with the ledger object identifier generator, transaction processing module and the Blockchain with free access to data reading.

Unique functionality, specific architecture and transparency of interaction of the Bitbon System components give grounds for considering this System to be a separate independent Asset that has unlimited potential for development.

The Bitbon System is a convenient and effective digital way of redistribution, transfer, accounting and management of property rights to Assets by increasing the efficiency and functionality, security, fault tolerance, storage reliability of information on property rights to Assets by optimizing the management system of property rights to Assets and applying innovative software and hardware solutions by including the ledger object identifier generator and the validation module in the system, by creating the possibility of digital transfer of property rights to Assets.

In addition, the transparency of the transfer of property rights to Assets and of the management of property rights to Assets is increased in the Bitbon System by providing the possibility of free access to the Blockchain of property rights to Assets for data reading by Users. The high level of data storage reliability is improved by automated recording of all transactions with property rights to Assets by recording and storing them in the Blockchain. The universality of data transfer interfaces is achieved in the Bitbon System by using publicly available data transfer tools based on Open Source solutions.

Materials of the article Examples of How to Use the Bitbon System explain considerably the general principle of interaction of its components.

1 Bitbon means a digital derivative financial instrument having an identifier and nominal value in the amount determined in accordance with the procedure stipulated by the Bitbon System Public Contract, which corresponds to a certain part of property rights to Assets designated in Bitbons or Projectbons. Any operations with Bitbon (Bitbon issuing, its transfer from one owner to another, splitting of nominal value and other operations) are recorded in the Blockchain as data that cannot be deleted or modified.

2 Bitbon System means an integral decentralized system based on the Blockchain technology, which is basically a platform for implementing Contributing under the terms and conditions of Projectbon Public Contracts of various projects and managing legal relations between the Bitbon System Users, the key component of which is Bitbon.

3 Account means a collection of user data necessary for his/her authentication and for providing access to his/her personal details, settings and the system functionality.

4 Bitbon System User means a Bitbon System Participant who uses Bitbons and/or Projectbons to conduct his/her activity in the Bitbon System.

5 Projectbon Public Contract means a digital document of a certain class according to the classifier accepted in the Bitbon System, which defines and regulates: rights and obligations of the Contractat, Bitup-Agency and Contributors as well as the procedure, manner and conditions of their relations as three parties to the Projectbon Public Contract of a specific project; field of Projectbon use, as well as all products and operations that may be applied to Projectbon. The Projectbon Public Contract of a specific project can define the terms and procedures for Projectbon issuing, Bitbon and Projectbon transfer rules, procedure for repurchasing Projectbons from the Contributor as well as the reference to the procedure for evaluating Assets.

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The inventions are patented through the international patent system РСТ (Patent Cooperation Treaty), which helps applicants to patent their inventions in many countries by means of the Patent Cooperation Treaty (PCT). Thus, by filing an international patent application under the PCT, an applicant can provide protection to his/her invention in 152 РСТ Contracting States.

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