Method for creating commodity assets from unrefined commodity reserves utilizing blockchain and distributed ledger technology
A token system and method, employing a token representing an interest in a smart contract, comprising: a distributed ledger, storing parameters of a smart contract, the smart contract representing an agreement, secured by a security interest in property, to execute the security interest unless a token is returned within a period; a communication port configured to interface with an automated communication network for communications between a plurality of cryptographic hardware processors; and an automated distributed virtual state machine, hosted by the plurality of cryptographic hardware processors, employing a distributed consensus model for transaction validation, the automated distributed virtual state machine being configured to: communicate distributed consensus messages through the automated communication network; communicate the token; execute the smart contract defined by the parameters, receiving inputs and producing outputs on a blockchain; and communicate an immutable message for exercise of the security interest.
1 . A cryptographic tokenization method of a productive asset, comprising:
collateralizing a property interest in the productive asset under a secured transaction with a security interest requiring payment of substitute collateral at the end of a term for outstanding interests in the secured transaction;
producing a plurality of tokens comprising cryptographic data structures on a distributed ledger system tracking a transfer of tokens, authenticating a current owner of tokens, and revealing inconsistent transfers of tokens;
the plurality of tokens being associated with a smart contract automatically executed by a distributed virtual machine instantiated across a plurality of network nodes that implements the security interest, each token representing a fractional share of the transaction, the smart contract having as inputs at least time, an ownership status of the plurality of tokens, and a substitute collateral status with respect to the plurality of tokens, and having as an output an immutable indicator recorded on the distributed ledger system that automatically triggers execution of the security interest to permit operation of the productive asset on behalf of outstanding token-holders to fulfill obligations of the secured transaction;
issuing the plurality of tokens on a market from an issuer;
transacting changes in ownership of the plurality of tokens on the market using the distributed ledger system; and
automatically determining by the smart contract, upon expiration of the term, outstanding tokens from the issuer for which payment of the substitute collateral has not been made.
2 . The cryptographic tokenization method of claim 1 , wherein the smart contract further provides a condition for tolling of the expiration of the term.
3 . The cryptographic tokenization method of claim 1 , wherein the smart contract further monitors reacquisition of a token by the issuer.
4 . The cryptographic tokenization method of claim 1 , wherein the tokens are fungible tokens.
5 . The cryptographic tokenization method of claim 1 , wherein the tokens are semi-fungible tokens.
6 . The cryptographic tokenization method of claim 1 , wherein the productive asset is a mine, and the substitute collateral is a commodity extracted from the mine.
7 . The cryptographic tokenization method of claim 1 , wherein the collateralizing comprises appraising the productive capacity of the productive asset, and collateralizing the secured transaction with an amount of a product of the productive asset.
8 . The cryptographic tokenization method of claim 1 , wherein the payment of substitute collateral at the end of a term is in an amount dependent on time.
9 . The cryptographic tokenization method of claim 1 , further comprising reacquiring tokens on the market by the issuer to avoid payment of the substitute collateral.
10 . The cryptographic tokenization method of claim 1 , wherein the distributed virtual machine executes on a set of distributed nodes that support the distributed ledger system.
11 . The cryptographic tokenization method of claim 1 , wherein the terms of the smart contract are stored in the distributed ledger system.
12 . The cryptographic tokenization method of claim 1 , wherein a cost for execution of the smart contract is prepaid by the issuer.
13 . The cryptographic tokenization method of claim 1 , wherein a cost for execution of the smart contract is paid by a holder of an outstanding token.
14 . The cryptographic tokenization method of claim 1 , wherein the distributed ledger system is operated according to a distributed consensus model.
15 . The cryptographic tokenization method of claim 1 , wherein the smart contract further generates an immutable message in conjunction with the distributed ledger system for exercise of the security interest based on existence, upon expiration of the term, of outstanding tokens from the issuer for which payment of the substitute collateral has not been made.
16 . The cryptographic tokenization method of claim 1 , wherein the distributed ledger system comprises a blockchain.
17 . A cryptographic tokenization method of a productive asset which produces a commodity, comprising:
collateralizing a property interest in the productive asset under a secured transaction with a security interest requiring delivery of substitute collateral representing an amount of the commodity at the expiration of a term for outstanding interests in the secured transaction;
producing a plurality of cryptographic tokens, each cryptographic token comprising a cryptographic data structure-representing a portion of the outstanding interests, represented on a blockchain system which tracks cryptographic token transfers and authenticates current cryptographic token ownership,
wherein the blockchain system supports automatic execution of a distributed virtual machine instantiated across a plurality of network nodes that executes a smart contract that implements the security interest, the smart contract having as inputs at least time, current cryptographic token ownership, and substitute collateral status, and having as an output at least an immutable indicator recorded on the blockchain, the smart contract comprising instructions operating to determine a failure of satisfaction of terms of the secured transaction, and upon said determination, to authorize operation of the productive asset to fulfill obligations under the secured transaction;
transacting changes in ownership of the plurality of cryptographic tokens on a market using the blockchain; and
automatically determining by the smart contract, a tolling contingency for expiration of the term, and a failure of delivery of the substitute collateral to an outstanding cryptographic token holder upon expiration of the term.
18 . The cryptographic tokenization method of claim 17 , wherein the plurality of cryptographic tokens are semi-fungible tokens representing fungible interests in the same productive asset, and wherein the substitute collateral is a commodity.
19 . The cryptographic tokenization method of claim 1 , wherein the payment of substitute collateral at the end of a term is in an amount dependent on time and an interest rate.
20 . A cryptographic tokenization system, comprising:
a distributed ledger system comprising a plurality of nodes which together execute a fault tolerant distributed consensus system, which supports transactions in a market using tokens comprising cryptographic data structures, the distributed ledger system being configured to authenticate a current owner of a token, block an inconsistent transfer of the token, and provide an immutable record of token transfers, and supports execution of a distributed state machine for execution of a smart contract;
each token representing a portion of a secured transaction secured by collateral representing a property interest in a productive asset, under a security agreement requiring tender of substitute collateral at the end of a term for outstanding interests in the secured transaction to relinquish the collateral;
the smart contract being automatically executed by the distributed state machine, having as inputs at least time, an ownership status of the plurality of tokens, and a substitute collateral status with respect to the plurality of tokens, and having as an output an indicator that permits operation of the productive asset on behalf of outstanding interests to fulfill obligations of the secured transaction; and
the distributed ledger system being configured to transact changes in ownership of the token using the distributed ledger system.