Blockchain Token Smart Contract Transactions

Blockchain Token Smart Contract Transactions

What is a token smart contract and what role does it play in the transaction processing system?

How do users associate their blockchain public keys with their trading accounts?

How do merchants register and associate their blockchain addresses in the system?

When a user initiates a transaction, what key information is sent to the merchant application?

What functions does the user's blockchain wallet perform during the transaction?

How does the issuing system update the user's trading account balance after the transaction is completed?

How does the issuing system ensure that the transaction amount is deposited into the correct merchant account?

What role does the token smart contract play in finalizing the transaction?

What role can ERC-20 tokens play in the system?

What are the potential advantages of using blockchain token smart contracts for transaction processing compared to traditional payment systems?

Short answer questions

A token smart contract is a program stored on the blockchain that automatically executes transactions and records transaction data. In the transaction processing system, it acts as a trusted third party that automatically manages the transaction process and ensures security and transparency.

Users can associate their blockchain public keys with their trading accounts by visiting the account portal. The account portal allows users to select one or more trading account identifiers and associate blockchain public keys with them.

Merchants can register in the system by visiting the merchant portal. They need to provide merchant credentials and select a merchant identifier to be associated with the blockchain wallet.

When a user initiates a transaction, the merchant application receives the user's blockchain public key and the transaction amount. This information is used to execute the transaction and update the user's account balance.

The user blockchain wallet acts as an interface between the user and the blockchain network. It allows the user to sign transactions and broadcasts transactions to the blockchain network for verification and addition.

Once the transaction is completed, the issuance system retrieves the transaction account identifier associated with the user's public key from the issuance repository. The issuance system then instructs the accounts receivable system to adjust the corresponding transaction account balance based on the transaction amount.

The issuance system ensures that the transaction amount is deposited into the correct merchant account by querying the issuance repository. The issuance repository stores the mapping between merchant public keys and merchant identifiers.

The token smart contract plays a vital role in finalizing transactions. It adjusts the token balances of the user and merchant based on the transaction amount and submits these adjustments to the blockchain, thereby recording the transaction information in an immutable manner.

ERC-20 tokens can serve as a medium of exchange in the system. It can be used to represent the user's transaction account balance and be used to pay for goods and services.

Compared to traditional payment systems, the use of blockchain token smart contracts for transaction processing offers greater security, transparency, and efficiency. Because transaction records are stored on the blockchain, they are immutable and auditable by authorized parties, reducing the risk of fraud. In addition, the automated execution of smart contracts reduces the need for intermediaries, thereby reducing transaction costs and speeding up transactions.

Glossary of Key Terms

Term Definitions Blockchain A distributed database that records transactions in a secure, transparent, and tamper-proof manner. Token Smart Contract A program stored on a blockchain that automatically executes transactions and records transaction data. Blockchain Public Key An address in a blockchain network for receiving cryptocurrency or tokens. Transaction Account Identifier An alphanumeric code that uniquely identifies a transaction account, such as a transaction account number or primary account number (PAN). Merchant Identifier An alphanumeric code that uniquely identifies a merchant, such as a merchant ID. User Blockchain Wallet A software application that allows users to interact with a blockchain network, such as signing and broadcasting transactions. Issuing System A system responsible for managing transaction accounts, authorizing transactions, and processing settlements. Issuing Repository A database that stores merchant and user registration information, including mappings between blockchain addresses and identifiers. Accounts Receivable System A system that stores and manages transaction account balances. Acquirer A bank that processes credit or debit card payments on behalf of merchants. ERC-20 Token An Ethereum token that follows the ERC-20 standard, which defines the rules for the creation and management of tokens.