Is XRP Going Private?
A new proposal from software developers would allow Ripple users to send and receive private transactions over the XRP ledger. In a Github submission at the start of this week, Nik Bougalis said he, and a host of other Ripple developers, had built a private payment system for the XRP ledger, designed to protect users from third parties with bad intentions. So, is XRP going private?
What is Ripple?
According to eToro, “Ripple is the company behind XRP. RippleNet and the XRP Ledger were created by RippleLabs, which uses open-source technology to beat Bitcoin in speed, and banks and other financial institutions in fees. Having launched in 2012, Ripple soon exploded onto the crypto scene.”
XRP going private would shake everything up
Is XRP going private? Bougalis seems to think it would be a good idea. A new private Ripple system would, according to him, look like a system of “blinded tags,” making private transactions possible on the platform. Transactions would present only as a string of numbers, appearing random to everyone but the recipient.
“[I]f blinded tags are in use, an attacker capable of observing every payment transaction will be unable to isolate a pair of transactions that refer to the same unblinded tag,” Bougalis said.
How Ripple works now
Crypto exchanges hold XRP from users in the same address, which is then separated into sub-wallets. To mark the difference between the various holdings, the sub-wallets have to use 32-bit source and destination tags to identify a recipient.
Right now, the tags are visible to the public. If they’re used frequently enough, they can then be pinpointed to a particular user. Some exchanges already generate new tags for each XRP transaction, but there are only a certain number of them available.
Although this isn’t necessarily a problem right now, there will come a time when exchanges will be unable to generate new tags. Bougalis’ proposal would essentially mean that users can choose to have blinded tags on or off. They would work as a single function, so as not to overburden the network.
Using blinded tags will protect the account holder’s identity, and also act as a bit of a “workaround” for preserving the availability of tags (both destination and source) available to be used by exchanges.
Blinded tags leverage an already existing infrastructure, only really available on exchanges, so it’s unclear whether XRP users could utilize them by sending transactions between individual wallets.
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Private XRP not coming anytime soon
This proposal appeared on Github earlier this week, and it’s still uncertain as to whether XRP is going private. Is this just a suggestion by Bougalis and the other developers, or is this something that’s already in the works at Ripple? With more and more coins opting for confidentiality, would Ripple be making the right move? The issue would really be how it would affect the company’s reputation in the eyes of regulators and lawmakers, considering how they’ve positioned themselves as primarily an alternative financial services provider. This new development could throw a bit of a spanner in the works there.
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