System and method for arbitrating a blockchain transaction

A computer-implemented method for arbitrating a blockchain transaction, the method comprising:

• creating an encrypted payment contract between a sender node and a receiver node, the encrypted payment contract comprising a payment condition-checking smart code,
• whereby the encrypted payment contract includes at least one of the following:
• a contract number, a sender node public key, a receiver node public key, a payment condition-checking smart code, a number of arbitrator nodes to be involved in case of dispute, a sender node signature, a receiver node signature, a payment contract hash value, and a contract user data;
• sending the encrypted payment contract to a mining node;
• creating, by the mining node, a payment contract block;
• setting, by the sender node, a dispute resolution period;
• setting the dispute resolution period to prevent a malicious attacker from immediately retransmitting a cryptocurrency payment after stealing a cryptocurrency payment from a sender's wallet
• wherein the dispute resolution period, once set, cannot be modified, such that if a wallet key is stolen in a malicious attack, the malicious attack cannot modify the dispute resolution period to a zero day and immediately unlock funds;
• wherein the sender node presets the dispute resolution period, during which the receiver node cannot transfer the cryptocurrency payment to the sender's wallet until a transaction is approved and executed;
• transacting a trade between the sender node and the receiver node, the transaction comprising trading a digital content for a cryptocurrency;
• storing the digital content in an external storage server;
• executing, by a mining node, the payment condition-checking smart code upon request by the sender node, or the receiver node, or both;
• if the execution result of the payment condition-checking smart code is true, executing payment to the receiver node, whereby the execution result of the payment condition-checking smart code is true when the digital content is stored in the external storage server and signed by the receiver node before the dispute resolution period terminates;
• selecting, by the sender node and the receiver node, a plurality of arbitration nodes through a delegated proof of stake process;
• submitting, by the sender node or the receiver node, an arbitration application;
• determining, by the arbitration nodes, the validity of the transaction;
• wherein the dispute resolution period allows time for the sender node and a plurality of arbitration nodes to verify a veracity of the digital work being offered before making a payment;
• determining the dispute resolution period by at least one of a time, date or set of the number of blocks additionally created after a transaction;
• wherein the dispute resolution period of a payment contract follows the dispute resolution period set in the wallet of the sender node:
• generating, by the arbitrator nodes, an arbitration report;
• requesting, by the arbitrator nodes, the mining node to create an arbitration report block;
• and
• submitting, by the sender node or the receiver node, upon disagreement with the determination, a subsequent arbitration application, the subsequent arbitration comprising more arbitration nodes than the prior arbitration application.

A computer-implemented system for arbitrating a blockchain transaction, the system comprising:

• an encrypted payment contract for a transaction generated between a sender node and a receiver node, the transaction comprising trading a digital content for a cryptocurrency, the encrypted payment contract further comprising a payment condition-checking smart code;
• an external storage server storing the digital content, or the cryptocurrency, or both;
• a payment contract node created by a mining node, whereby the executing, by the payment condition-checking smart code is executed by the mining node upon request by the sender node, or the receiver node, or both;
• a dispute resolution period set by the sender node or the receiver node, the dispute resolution period being for the transaction,
• wherein the dispute resolution period is set to prevent a malicious attacker from immediately retransmitting cryptocurrency payment after stealing the cryptocurrency payment from the sender's wallet;
• wherein the dispute resolution period, once set, cannot be modified, such that even if a wallet key is stolen in a malicious attack, the malicious attack cannot modify the dispute resolution period to a zero day and immediately unlock funds;
• wherein the sender node presets the dispute resolution period, during which the receiver node cannot transfer the cryptocurrency payment to another wallet until a transaction is approved and executed;
• whereby if the execution result of the payment condition-checking smart code is true, payment is executed to the sender node, whereby the execution result of the payment condition-checking smart code is true when the digital content is stored in the external storage server and signed by the receiver node before the dispute resolution period terminates;
• an arbitration application submitted by the sender node or the receiver node;
• a plurality of arbitration nodes selected by the sender node and the receiver node to arbitrate the arbitration application, whereby the arbitration nodes determine the validity of the transaction;
• wherein the dispute resolution period allows time for the sender node and the plurality of arbitration nodes to verify a veracity of a digital work being offered before making payment;
• determining, the dispute resolution period by at least one of a time, date or set of the number of blocks additionally created after a transaction;
• wherein the dispute resolution period of each payment contract follows the dispute resolution period set in the wallet of the sender node;
• an arbitration report generated b the arbitrator nodes;
• an arbitration report block requested, by the arbitrator nodes, for the mining nodes to generate;
• and
• a subsequent arbitration application submitted by the sender node or the receiver node, upon disagreement with the determination, the subsequent arbitration comprising more arbitration nodes than the prior arbitration application.