Re: Vetting connectors (was Interledger and Privacy)

>
> I don't see a need for a connector if we are both on the RCL ledger.


Yassin, you're right that connectors are not needed if everyone is on the
same ledger. ILP is all about the use case when people are on different
ledgers. We've found that it's infeasible to expect one ledger to fulfill
all requirements for everyone, but we still want to enable universal
payments between people. Instead of convincing lots of people that RCL is
better than whatever they're already using, I'd rather connect all of the
ledgers and let people keep using whatever systems serve them best.


Wouldn't it be the job of each particular ledger to to answer these
> questions about connectors and communicate that information to each other
> as needed (without revealing any more about the connector's identity than
> absolutely required)?


One way to look at the issue of who the connectors are, and how you know if
they actually have accounts at the ledgers they claim to have accounts on
would be: you don't have any guarantees. A connector can advertise that
they can facilitate payments between Ledger A and Ledger B. If that's true
it'll mean that if A or B are banks they will have done whatever vetting is
necessary (if either ledger is Bitcoin it won't care and the only
requirement will be having a Bitcoin wallet). If the connector is lying and
doesn't have accounts on both of those ledgers, the worst that can happen
to the sender is:

   - The connector will make off with the fees
   - The sender will be delayed in sending their payment and will have to
   retry

The protocol protects the sender from losing the principal of their
payment. I would argue that the easiest way of addressing the fee and delay
issues is to keep data on how long connectors have been operating, evidence
of successful payments, etc. If banks or other specific entities kept track
of it it would be relatively easy. Keeping this in a public, trustworthy
and distributed way seems a little more difficult. Anyone have ideas about
how this could be done?



On Fri, Oct 30, 2015 at 6:04 AM, Brian Walden <brianwalden@outlook.com>
wrote:

>
>
>
>
>
>
> *Arie can correct me but I interpreted this as; how do connectors assert
> who they are and what credentials they have (such as licenses, if required)
> that users can use to decide if they wish to trust a connector?I think we
> can seperate this into two "tests" that the user must do:1) Is the
> connector who they say they are?2) Is the connector qualified to perform
> the transaction that is being requested?*
>
> Wouldn't it be the job of each particular ledger to to answer these
> questions about connectors and communicate that information to each other
> as needed (without revealing any more about the connector's identity than
> absolutely required)?
>
> If Alice at A-Bank wants to send money to Bob at B-Bank and Carol has been
> identified as a possible connector. Wouldn't A-Bank have already performed
> AML/KYC on both Alice and Carol to the extent needed for them to perform
> the transaction. A-Bank can ask B-Bank if the account holders involved in
> their end of the transaction meet the relevant compliance requirements and
> B-Bank can respond, perhaps with a certificate from an authority that they
> both trust asserting that B-Bank is compliant. Each bank would be
> responsible for making sure it's own accounts are compliant.
>
> As for the question of when Carol signs up to be connector between A-Bank
> and B-Bank, how does each bank know she's the same Carol? I don't think
> ledgers should be revealing the identity of their account holders to other
> ledgers unless absolutely necessary. A simple system verifying that each
> account has agreed to the connection would work. For example Carol signs
> into her account at A-Bank and requests that her account #123 act as a
> connector to account #456 at B-Bank. A-Bank then asks B-Bank if their
> account #456 has requested to be a connector to A-Bank account #123. The
> response is no, so no connection is formed yet. Then Carol signs into her
> account at B-Bank and requests that her account #456 act as a connector to
> account #123 at A-Bank. This time, when B-Bank asks A-Bank if their account
> #123 has requested to be a connector to B-Bank account #456, the connection
> will be formed.
>
> A question for those of you who know all the financial regulations. Does
> the same person have to own the account on both ends of a connection as
> long as both ledgers are compliant? Say that Dave is actually the owner of
> account #456 at B-Bank and he and Carol have worked out some deal to act
> together as an interledger connector. A-Bank would be able to answer any
> questions or provide any reporting for account #123, and B-Bank would be
> able to do the same for account #456. Does that meet current regulations?
>
> ------------------------------
> Date: Mon, 26 Oct 2015 17:11:01 +0200
> From: adrian@hopebailie.com
> To: public-interledger@w3.org
> Subject: Vetting connectors (was Interledger and Privacy)
>
> Arie raised a few questions on another thread which I don't want to get
> lost in the discussion. The first was the question, how do we vet "trust"
> of the connectors?
>
> Arie can correct me but I interpreted this as; how do connectors assert
> who they are and what credentials they have (such as licenses, if required)
> that users can use to decide if they wish to trust a connector?
>
> I think we can seperate this into two "tests" that the user must do:
> 1) Is the connector who they say they are?
> 2) Is the connector qualified to perform the transaction that is being
> requested?
>
> I think for both the user must establish some level of trust, either with
> the connector itself or with some entity that makes assertions about the
> connector.
>
> If, for example, the connector is a registered bank then user's will
> likely trust the fact that the bank is licensed and their funds are FDIC
> insured (in the US). They could verify that they are dealing with the
> actual bank's API using something like SSL certificates.
>
> If on the other hand if the connector is an independent organisation like
> a specialist market-maker then the user may decide to use a third-party
> verification service that under-writes or guarantees the connector.
>
> These are two extremes but it illustrates the point that ultimately user's
> (in determining the path for their payment) will make decisions about who
> to trust and that will depend on various factors like the value of the
> payment, the user's appetite for risk etc.
>
> In terms of standardisation, we should begin documenting these use cases
> and risk factors so we can figure out what data a connector should be
> sharing with users to allow them to make their trust decisions and do their
> path finding.
>
> Any thoughts on what that list might look like?
>



-- 
Evan Schwartz | Software Architect | Ripple Labs
[image: ripple.com] <http://ripple.com>