TransactID is a Travel Rule messaging protocol based upon Bitcoin Improvement Protocol (BIP) 75 principles. Developed in 2016, BIP 75 is a P2P protocol that provides enhancements to the existing payment protocol (BIP 70), one of which allows two parties to exchange payment information in a permissioned and encrypted way so that wallet address communication can become automated. Blockchain identity company Netki created TransactID based on the principles mentioned above.
This article covers factors to consider when choosing TransactID as a Travel Rule messaging protocol.
How does TransactID work?
TransactID facilitates identity validation for transactions utilizing a secure, encrypted, private connection based on BIP 75.
- X.509 certificates are used to identify a crypto transaction’s originator and beneficiary parties without needing either party to connect with the other.
- The X.509 certificate holds each party’s Personally Identifiable Information (PII) and a public key signed by the Certificate Authority and validates the authenticity of the party’s identity to its counterparty.
- The originator customer shares a URL to a private, secure encrypted connection out-of-band instead of their wallet address.
- The beneficiary customer uses this URL for the transaction, prompting the beneficiary VASP to open a private, secure encrypted connection to the Originator VASP.
- The Originator VASP signs the opening of the connection with its own identity certificate.
- The beneficiary VASP examines the certificate to determine if this is a trustworthy counterparty and would like to share their customer’s PII.
Is TransactID a Travel Rule solution or protocol?
TransactID is a protocol.
Is TransactID a fully integrated Travel Rule solution provider?
No. TransactID is a protocol offered by Netki. Netki provides a fully integrated Travel Rule solution.
Is TransactID complex to integrate?
TransactID’s integration effort is currently unknown.
What are the steps to implementing TransactID?
The steps to implementing TransactID are currently unknown.
How does VASP due diligence work on TransactID?
We are unsure of how VASP due diligence works on TransactID.
What is TransactID’s governance model?
California-based Netki oversees TransactID.
Does TransactID support non-custodial wallets?
Yes. TransactID works with both custodial wallets and non-custodial wallets.
Is TransactID live?
TransactID is live, and actively used in production.
Is there industry support for TransactID?
Yes. TransactID has a good response from regulators, alongside excellent initial support from VASPs.
What is TransactID’s membership fee structure?
TransactID’s transmit protocol is free to use, while the x.509 certificates are fee-based.
Does Notabene support TransactID?
Notabene will support TransactID upon our customer’s request.
What are the benefits of using TransactID?
- Free to use: There is no fee or due diligence process for VASPs to join
What are the drawbacks of using TransactID?
- Closed solution: TransactID is currently centered around a single vendor, which will cause interoperability issues in the long run
Has there been a testnet using TransactID?
There have been no reported Travel Rule-related testnets with TransactID.
TransactID for Developers:
TransactID’s Open API Documentation
View TransactID’s Github repository here.