Ripple CTO David Schwartz Addresses KYC Enforcement and Node Operations on XRPL

With the crypto market going through substantial price drops, Ripple CTO David Schwartz joined a discussion with crypto journalist MetaMan on X (formerly Twitter) to address the effect of KYC enforcement on node operations in blockchain networks, especially within the XRP Ledger (XRPL.

If crypto is known for anything, it’s its community. Members of the industry are often engaged in interesting discussion on the metaverse, and one topic that has been coming up a lot is KYC.

As the crypto market continues to navigate substantial price drops, Ripple CTO David Schwartz joined a discussion with crypto journalist MetaMan on X (formerly Twitter) to address the effect of KYC enforcement on node operators in blockchain networks, especially within the XRP Ledger (XRPL).

After MetaMan asked a fundamental question about "what does decentralization mean," Schwartz provided insights into the intricacies of blockchain governance and varied perspectives on this crucial aspect of Web3 technologies.

The conversation began with MetaMan raising a key question regarding the implications of KYC mandates for node operators and the broader concept of decentralization.

“If you have to KYC to run a Blockchain node, is that really decentralization?” asked MetaMan.

In response, Schwartz inquired about the nature of such a KYC mandate and how it would be enforced.

“Is it a legal license for the node software, which would be a huge amount of centralization, or would participants apply the rules in a decentralized way?”

If it was a legal requirement due to licensing, then IMO that would be a huge amount of centralization. If the requirement was adopted and enforced in a decentralized way, then I'd have to look more closely at exactly what the requirements and implementation are.

Bitcoin SV vs. XRPL

Expanding on the topic of Bitcoin SV (BSV), Schwartz mentioned that "a specific organization" holds the legal claim over the software, thus dictating who can use it and ultimately join the network.

However, Schwartz noted that XRPL node software is open-source and isn't owned by any single entity. This factor contributes to XRPL being more decentralized than BSV, as participants in the XRPL governance system can choose to fork the network if they disagree with the rules.

“It is not a new idea that safety is more important than progress when there is no way to pay for the damage caused by an error,” said Schwartz.

Those thoughts are especially relevant in cases where forward progress might be risky. For example, XRPL's consensus algorithm is designed to halt in such cases, and it's capable of remaining stalled for an indefinite period.

This commitment to safety remains essential, given the large amounts of value that are transacted on XRPL.

Recently, eToro announced the addition of XRP to its U.S. offering via its partnership with Apex Clearing.