protocols

TransactID

TransactID is based upon Bitcoin Improvement Protocol (BIP) 75 principles. Developed in 2016, BIP 75 is a P2P protocol which 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 same principles.

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 the need for either party to connect with the other. 
  • The X.509 certificate holds each party’s Personally Identifiable Information (PII) as well as a public key which is 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, which prompts 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 if they would like to share their customer’s PII.

Is TransactID an open-sourced industry alliance network, a closed network, or a commercial solution?

TransactID is an open protocol. 

What is the integration effort?

The integration effort is currently unknown.

Is TransactID interoperable with various protocols and Travel Rule solutions?

Netki is adding a system of “translators” to its TransactID protocol that the company says creates “an interoperability bridge” between VASPs, having discussed the proposal with the majority of other industry players.

Justin Newton, CEO of Netki (per Coindesk)

“We are building translators to all the other protocols. We've already started discussions and engagement with probably all the publicly known protocols, and with some of them there's already been tech engagement work going on”

What is TransactID’s governance model?

TransactID is overseen by California-based Netki.

Does TransactID support non-custodial wallets?

TransactID works with custodial wallets and non-custodial wallets.

Is TransactID live(operational)?

TransactID is actively used in production.

What is the level of industry support for TransactID?

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.

Relevant links:

Github | TransactID

Netki | TransactID

Youtube | An Introduction to TransactID 

CoinDesk | How One Firm Is Addressing the Interoperability Problem Posed by FATF's 'Travel Rule'

Netki | FATF Compliance for the Blockchain Era (TransactID Onepager)

The Wealth Mosaic | Netki’s TransactID

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