China Chain Security Applies for Patent on "Unidirectional Common Relationship Discovery Method and System for Blockchain Addresses," Boosting Regulatory Efficiency

China Chain Security Applies for Patent on "Unidirectional Common Relationship Discovery Method and System for Blockchain Addresses," Boosting Regulatory EfficiencyOn November 27, 2024, the State Intellectual Property Office of China revealed that China Chain Security (Beijing) Technology Co., Ltd

China Chain Security Applies for Patent on "Unidirectional Common Relationship Discovery Method and System for Blockchain Addresses," Boosting Regulatory Efficiency

On November 27, 2024, the State Intellectual Property Office of China revealed that China Chain Security (Beijing) Technology Co., Ltd. has applied for a patent titled "Unidirectional Common Relationship Discovery Method and System for Blockchain Addresses," with publication number CN119026178A and application date of July 2024. This patent technology is expected to significantly improve blockchain regulatory efficiency, providing strong support for combating financial crime and safeguarding digital asset security.

The patent aims to address the complex and difficult-to-trace relationships between blockchain addresses. Blockchain technology is known for its decentralized and anonymous nature, making it exceptionally difficult to track and identify criminal activities. Traditional regulatory methods often rely on manual analysis and limited clues, resulting in low efficiency and the potential for overlooking critical information. China Chain Security's patent offers an algorithm-based, automated solution capable of effectively discovering unidirectional common relationships between blockchain addresses, thereby enhancing regulatory efficiency.

The patent abstract details the method and system's workflow. First, the system acquires an initial address as the starting point for analysis. It then searches for candidate addresses that have transacted with the initial address. These candidates form the first-layer relationship network of the initial address, which the system constructs into a network structure called the "first relationship graph."

To further explore the relationships between addresses, the system analyzes the "first relationship graph." Based on the connections between addresses, it divides the initial address and candidate addresses into at least one node group. Each node group represents a relatively independent cluster of address relationships.

Next, the system explores deeper address relationships within each node group. It searches for affiliated addresses that have transacted with addresses within the node group (including the initial address and candidate addresses). These affiliated addresses are incorporated into a new relationship network. The system then constructs a "second relationship graph" based on the initial address, candidate addresses, and affiliated addresses of each node group.

After constructing the "second relationship graph," the system enters a crucial analytical phase. It calculates the embedding vector for each node based on fundamental indicators (such as transaction frequency and amount). Embedding vectors transform node characteristics into numerical vectors, effectively capturing a node's position and importance within the network.

Using embedding vectors, the system calculates the similarity between node pairs. Here, a node pair refers to the nodes corresponding to the initial address and a candidate address in the "second relationship graph." By calculating similarity, the system determines whether a candidate address is associated with the initial address, such as belonging to the same criminal organization or money laundering network. This determination is crucial for regulatory agencies, helping them quickly identify the flow of fraudulent funds.

If the similarity reaches a predefined threshold, the system flags the candidate address as a "regulatory address" and submits its information to regulatory agencies. This indicates a high degree of correlation between the candidate and initial addresses, suggesting potential involvement in illegal activities.

This method, based on embedding vectors and similarity calculations, effectively identifies key addresses hidden within complex transaction networks, thereby improving regulatory efficiency. Compared to traditional manual analysis, this method offers significant advantages: automation, efficiency, and accuracy. It can process massive amounts of data and identify subtle correlations that are difficult for humans to detect, thus better combating financial crime and maintaining financial security.

The core of this patent technology lies in its unidirectional nature. The system focuses on expanding outwards from the initial address to find associated addresses, without considering reverse relationships. This design effectively reduces computation, improves efficiency, and avoids information redundancy and misjudgment caused by the complexity of bidirectional relationships.

China Chain Security's patent represents a significant technological breakthrough in blockchain regulation. It provides regulatory agencies with a powerful tool to effectively address increasingly complex digital asset crimes and ensure the healthy development of the digital economy. The application of this technology will further enhance the accuracy and efficiency of blockchain regulation, contributing to the construction of a safe and stable digital financial environment. In the future, this technology is expected to play a larger role in anti-money laundering and counter-terrorism financing, providing strong technological support for maintaining national financial security and creating a safer and more reliable environment for the healthy development of blockchain technology. The successful application of this patent marks significant progress in China's blockchain regulatory technology and demonstrates China's determination and ability to utilize technology to maintain financial security.

In summary, China Chain Security's patent for the "Unidirectional Common Relationship Discovery Method and System for Blockchain Addresses," with its automation, efficiency, and accuracy, provides a novel technological solution for blockchain regulation, deserving of industry attention and expectation. The promotion and application of this technology will strongly promote the healthy development of blockchain technology and contribute significantly to building a safer and more reliable digital financial environment.