Computer-implemented methods and systems for validating tokens for blockchain-based cryptocurrenciescomputer-implemented methods and systems for validating tokens for blockchain-based cryptocurrencies

A computer-implemented method executed by one or more processors for determining validity of a token represented in a transaction, the method comprising:

• receiving, over a communications network, data identifying a transaction that includes an input referencing a previous transaction identifier and representing a transfer of a token;
• querying a title registry database to determine whether a second transaction comprising another transfer of the token is recorded in the title registry database;
• responsive to determining that the second transaction is not recorded in the title registry database:
• (a) selecting, as a current transaction, a prior transaction recorded in a distributed ledger whose transaction identifier corresponds to the previous transaction identifier;
• (b) determining whether a redeem script of the current transaction has been signed by an authorized signatory;
• (c) when the redeem script of the current transaction has not been signed by the authorized signatory:
• (i) obtaining, from the current transaction, a further previous transaction identifier;
• or
• (ii) selecting, as the current transaction, a further prior transaction recorded in the distributed ledger whose transaction identifier corresponds to the further previous transaction identifier;
• and
• (d) iteratively repeating steps (b) and (c) until either (i) the redeem script of the current transaction is signed by the authorized signatory or (ii) no further prior transactions are identified;
• responsive to identifying a transaction in the distributed ledger whose redeem script is signed by the authorized signatory, determining that the token is valid;
• and
• responsive to determining that the token is valid, recording the transaction representing the transfer of the token in the title registry database.