Author: Justin Newton 2016-06-22 00:14:31
Published on: 2016-06-22T00:14:31+00:00
In a discussion on bitcoin-dev, Erik Aronesty brings up the issue of an optional client supplied identification which is being pushed for AML/KYC compliance. He mentions Netki's AML/KYC compliance product as an example. However, Peter Todd points out that this feature has a negative impact on fungibility and privacy and should not be adopted in standards. Justin W. Newton, founder/CEO of Netki, responds to this argument by stating that AML/KYC compliance is one of the use cases that BIP 75 and their certificates can support. He explains that there are individuals and entities who want to buy, sell and use bitcoin but have compliance requirements that they need to meet before they can do so.Netki wanted to build tools to allow entrepreneurs to breathe easy while at the same time allowing more people and companies to enter the ecosystem. The solution they are using has characteristics which protect user privacy such as only the counterparties in a transaction being able to see the identity data. In addition, counterparties themselves decide whether identity information is required for any given transaction and no trace is left on the blockchain or anywhere else that identity information was exchanged. The solution is based on open source and open standards, allowing open permissionless innovation versus parties building closed networks based on closed standards.Justin argues that if one is not opposed to organizations that have AML requirements from using the bitcoin blockchain, then an open source, open standards-based solution would be preferable to exclusionary, proprietary ones. BIP 70 and BIP 75 are standards for voluntary information exchange between counterparties in a transaction, something which Justin believes is exactly what standards should be for.
Updated on: 2023-06-11T18:44:29.478020+00:00