This weekend saw the release of version 1.1.0 of Rippled, the peer to peer server running the XRP ledger. The main feature of the new release is the DepositPreAuth amendment, which completes a suit of options for allowing businesses to control which addresses can and can’t send them payment.
Crypto is a young space, with many excited and well meaning people celebrating the march toward adoption (Well, probably not celebrating too much yet if they joined us in 2018). But when the community discusses adoption, and mainstream financial institutions ‘getting into crypto’, there are a lot of us who conflate institutional speculation with integration of blockchain products and services into their business operations.
Some Bitcoin (BTC) ETF will be approved sooner or later, and in the meantime other options are slowly emerging for investors who want to dip their feet into crypto. But that is not what Ripple mean when they are talking about adoption.
The Double Edged Sword of Strict Regulations
It can’t be denied that much of the early expansion of the crypto space was entirely dependent on the lack of regulation we have had.
Many of the largest and most successful projects would not have been able to get off the ground without ICOs – a practice that screams that those tokens should be securities to many financial experts. Many individuals too got into the space intrigued by the idea of mining for coins – something most governments think fit squarely under activities that ought to be subject to taxation (another word the crypto community doesn’t like).
So in many ways a lack of regulations was not only good for crypto but almost necessary. At the same time, however, blockchain technology and digital assets cannot be adopted by more traditional business ventures without careful attention being paid to existing regulations.
And this is where Ripple hopes to excel. Positioning itself as the would be default payment protocol for international money transfers, Ripple offers near instant confirmation times and near zero transaction fees. For the goal Ripple has set itself, these are mandatory, and the project delivers. But there are other hurdles, some not so obvious, that are still being worked on.
In this latest update to the protocol running the XRP ledger, the main feature is the introduction of DepositPreAuth – a function that, together with an older function called DepositAuth, will allow businesses to control who can send them money. It’s not an issue most in crypto have even considered, but on pretty much every blockchain in existence, there is no way to stop people from sending you money. And yet tight financial regulations in many jurisdictions require businesses to know the senders of all transactions they receive.
With Ripple, users will now be able to set up their accounts to have to manually approve incoming transactions or whitelist particular addresses, but nothing similar exists for Bitcoin, and with a privacy coin like Monero (XMR), chances are good that once regulations truly come for crypto, in many jurisdictions it won’t be legal to accept it as payment at all.