It began with a step in 2012, and now we're seeing accelerating news and progress for XRP as more companies begin to release beta - and production - versions of applications that promise to result in far more volume than pure entertainment, social media, or even crypto market speculation. You've heard it emphasized time and again by one Ripple executive after another: The use case is king.
And the three biggest use cases belong to XRP.
It's not just the one central use case that could supercharge organic, utility-driven demand; in addition to its role as a bridge asset in cross-border value transfer, XRP is the centerpiece of the micropayments revolution that Coil is aiming to bring about with their web monetization standard. Large financial companies are looking at XRP's Payment Channels + ILP to potentially reach trillions of transactions per second.
And the third use case? Nobody knows exactly how large smart contracts and derivatives will grow, but some analysts predict that Codius smart contracts could enable entire new financial products that were previously unprofitable using traditional technology.
All of this began with one company championing XRP's mainstream use in 2012; a company named Ripple that stated what was unthinkable to the core crypto-anarchist community that comprised the bulk of enthusiasts at that time: "We're going to use XRP to help solve the problems that banks and other financial institutions face with inefficient transfer of money around the world." Their goals, along with their usage of a new digital asset that didn't rely on consumption of massive electricity to secure its network, was enough to prompt a religious backlash organized by those heavily invested in Bitcoin.
But the team persevered and focused on their task. Not only that, but these early trials and tribulations seemed to forge in them an iron will to succeed, and they set their gaze on the horizon with steely determination.
Now, as we near the final quarter of 2018, XRP's champions are many, and consist of companies, investment funds, and a multitude of individual operators. These leaders have been emboldened by the new and growing chorus of those in the global community that realize just how transformational the use of digital assets could be for supercharging the world's economy.
ACI Worldwide is a payments system company headquartered in Naples, Florida. It focuses on providing a variety of tools that allow banks and financial intermediary businesses to make real-time payments, and their official website claims that they handle "$14 trillion each day in payments and securities." They're listed on NASDAQ, and currently employ roughly four thousand people. In short, they have a sizable footprint in the real-time payments software industry. 1 2
In a recent interview, Douglas Mackenzie from Fintech Finance asked Craig Ramsey, ACI's Head of Real-Time Payments, to talk about ACI's long history of facilitating real-time payments, with a focus on the customer experience. Here's part of Craig Ramsey's response after mentioning both SWIFT GPI and Ripple: 3
"But... you can't just turn 'real-time' on. You must have the back-end systems; you must have the back-end processes. You must have the bank mentality of that 'always-on' environment. So you need to do things thousands of times every second, with very low latency - very low end-to-end transaction times to process those transactions.
We can't be looking at a transaction that takes a minute... or thirty seconds... we need a transaction that goes through the bank, fully secure, in less than a second."
As soon as I heard Craig Ramsey mention this requirement for the transaction speed, I immediately thought of a recent quote from Stefan Thomas, the CEO of Coil, who was previously Ripple's Chief Technology Officer:
"With the technologies we’ve helped build at Ripple — XRP and Interledger — we can process trillions of transactions per second without any central authority."
It sounds like ACI WorldWide is aiming to accelerate its technology stack to include some of these solutions, and they've correctly identified Ripple's solutions as a strong contender.
Money Tap is the Japanese Bank Consortium (JBC)-created mobile application that will allow real-time domestic payments within the country of Japan. That's right: domestic payments.
When most people think of Ripple technology solutions, they immediately focus on what Ripple replaces; the aging cross-border payments infrastructure that is currently comprised of SWIFT messaging systems. However, the JBC focused on building an application that could enable real-time payments within the country of Japan.
Currently, the payments infrastructure in Japan is limited, and real-time settlement of these transactions occurs during weekdays during bankers' hours.
To solve this problem and enable real-time payments 24 hours a day and seven days a week, the JBC worked with Ripple to create the "Money Tap" payment application. The application allows bank consortium customers to make instant domestic payments with only a bank account number, phone number, or a QR code.
The official announcement of the Money Tap application in early March of this year hinted at a release schedule to start in "autumn of 2018." 4 And recently, an XRP fan discovered that the Money Tap website had been updated:
The website is consistent with Ripple's original article on the application, and indicated that the debut would be in "Fall 2018" for both the IOS and Android platforms.
Settlement With R3
It was good news for those tracking litigation involving Ripple: the mutual lawsuits filed by both Ripple and R3 regarding a business disagreement from 2017 was finally settled, with both sides agreeing to set the dispute aside in conformance to confidential terms. 5
The settlement was sealed, meaning that both parties agree not to disclose the terms of the agreement that ended the litigation.
However, the original lawsuit involved the disposition of five billion XRP; the outstanding question of 'does the settlement entail any transfer of XRP, and what are the terms of that transfer?' has now been left open until an official statement is released by Ripple or R3. This obviously will not sit well with traders, who are eager to find out more about the supply of XRP.
Ripple understands how critical market supply is to traders, especially given their decision to voluntarily lock away most of their treasury holdings of XRP in escrow contracts that are time-locked to release each month for the next 55 months.
SBI's Clarification on XRP Trading
It was discovered this week that SBI's Virtual Currency (VC) platform was only doing over-the-counter trades of XRP based on previously-quoted prices. 6
And while I say 'discovered,' the more precise description would be that Western crypto traders were made aware that SBI communicated this information in their shareholder meeting on July 31st. However, this fact seemed to be overlooked by many XRP fans, including myself.
For new traders that do not understand the significance, over-the-counter buys and sales are when one seller and one buyer are matched up individually, and the price used for the exchange is normally a 'spot rate' that is already established on some other exchange, or in the offer itself.
These types of transactions do not affect the liquidity or the price of the underlying asset, unfortunately, so the XRP Community reacted with disappointment to the news, especially due to the positive initial statements provided by company representatives.
For XRP owners, the situation is not grim, however, as this actually indicates a conservative and proactive strategy by the financial giant to step carefully with regulators in Japan. According to one source, SBI's CEO indicated that market orders will begin within the fiscal year (by March 31st):
This conservative approach, while delaying the eventual high-volume trading of XRP, along with its integration of xRapid in the XRP-JPY corridor, has the long-term result of respectful regulatory conformance. Japan suffered from the high-profile Coincheck hack in January of this year, and since then, regulators in the country have been delaying the approval of more exchanges while security policies and procedures are reviewed.
The XRP Community will be tracking further announcements from SBI as 2018 rolls forward.
SWELL is less than one month away, and Ripple has updated the SWELL official site with some changes, including a fascinating eye-candy graphic that dynamically follows the mouse pointer of the reader. The special effect brightens different sections of SWELL-icon-shaped-webwork, demonstrating the theme for this year's conference: "Be Connected."
Ripple released some additional details about the conference, indicating specifics of several sessions that banking attendees should find fascinating: 7
- A session including Banco Santander and Siam Commercial Bank
- Session(s) potentially discussing digital assets with Cuallix, IDT, InstaRem and BeeTech
- A meeting about leveraging disruptive technology on day two
- A lightning round to help connect current and future members of RippleNet together
In addition to the serious business of transforming banking through blockchain technology, it was announced that Counting Crows would be performing on the first night of the conference.
The SWELL conference this year is being held in San Francisco, the center of Silicon Valley technology and also the headquarters for Ripple. Perhaps this fits into a goal of continuing the company's laser focus as it also hosts one of the most-watched new technology conferences in banking. I think locating the second SWELL conference in San Francisco is a pragmatic strategy, as it will make the conference even more accessible to other Silicon Valley fintechs that may want to drop in and interact with Ripple's current and future banking clients.
Ripple in Production
At the Crypto Finance Conference in Half Moon Bay, California on September 5th, Chris Larsen, Ripple's Chairman of the Board of Directors, indicated that the company has formally signed more than 100 clients to implement Ripple technology in production. 8 9 'Production' indicates that these clients are committed to using Ripple software in their day-to-day financial activities and have moved past any initial 'pilot' phase.
This announcement was indicative of the increased traction the company is gaining as 2018 moves forward, and it comes prior to Ripple's SWELL conference as well.
Cheddar was one of the news websites that attended the conference, and they released a video of an interview with Chris Larsen:
Here's a couple key quotes from Chris Larsen:
Question posed by Cheddar: "How do you view your incoming competition?"
Answer by Chris Larsen: "It's good: It's kind of gratifying to see... we've been doing this now... focusing on cross-border payments for enterprises, for four years, plus. It's good to see people realize that, yes, this is the area that's going to have the highest impact. We really think this is the 'killer app' for this whole blockchain movement. But we've been at it for longer than anybody, and what matters here is 'what corridors do you have?' and 'number of partners.'
We have hundreds of banks, payment providers, and remittance companies; not just in experimentation mode, but full production mode."
Also, in response to Chris Larsen's praise of the current US presidential administration's approach to regulation of fintech and blockchain technology, the Cheddar interviewer asked for clarification:
Question posed by Cheddar: "Why is that?"
Answer by Chris Larsen: "Well, I think that this administration gets that fintech and innovation is as important as supporting the 'big guys' and the big guys and the new fintechs can actually work together to really accelerate progress. So we're very bullish about the US regulatory system under this administration.
We think that the regulators are taking a thoughtful approach: You've got to stop the bad guys... that try to exploit - with all this incredible progress - but also hype - that's going on in this business... but also support the platforms, make sure that you're not picking the winners and losers: That all the major platforms are competing on an even playing field. So we're really bullish on what this administration is doing from a regulatory standpoint."
I won't include a full transcription of the interview, but it's definitely worth watching to view Chris Larsen's perspective on Ripple litigation and other challenging topics posed by Cheddar. It was a hard-hitting interview, and Chris Larsen provided a frank perspective on each subject.
Crypto Unbound 2018
The CATO Institute, according to its own material, professes to be: 10
"A public policy research organization dedicated to individual liberty, limited government, free markets, and peace."
And, indeed, the Institute seems to be unafraid to ask the tough questions about US Policy from a variety of standpoints, in addition to conducting studies and research on global economic issues. 11
On September 12th, they sponsored a "Summit on Financial Regulation" in San Francisco at the Hotel Nikko. Ripple's Ryan Zagone, Head of Regulatory Relations, attended and provided his opinion as part of a panel discussion on "Fintech, Payments, and Cryptos:" 12
The panel was moderated by Matthew Feeney, Director, Project on Emerging Technologies for the Cato Institute, and was comprised of a variety of book authors, stakeholders, and even a representative from the Federal Reserve Bank:
- John Collins, Partner, FS Vector
- Andrea O’Sullivan, Coauthor of "Bitcoin: A Primer for Policymakers"
- Gerald Tsai, Director of Applications and Fintech, Federal Reserve Bank of San Francisco
- Ryan Zagone, Director of Regulatory Relations, Ripple
The panel discussion started with Ryan Zagone providing an introduction of how Ripple's solutions are currently being used to transfer billions of dollars for various clients, including small-and-medium sized businesses:
"We've taken blockchain and digital assets as tools to underpin new payment solutions, the first of which is live now. We have financial institutions using it for real-time, cross-border remittances...We're live doing payments today.
Think about SMEs (small and medium sized businesses): They're mostly domestic focused today, but as they grow internationally, they hit these barriers in the cross-border space; it becomes too intensive from a treasury side to engage in global growth - so it becomes a barrier to commerce. We have several clients that are now using it for corporate payments. One client's done over a billion dollars in transaction volume for SMEs just in the last few months...
...Ripple's also notable for what we're doing with digital assets in the payments space. We've been trialing that for two or three years now, and it's going live later this year; a platform to give you real-time access into markets without pre-funding...
...Our trials have found that it reduces the cost of that payment from 40-to-70 percent..."
At around the ten minute mark, Matthew Feeney asks "On this area specifically (regulatory climate), how do you think the US ranks, compared to other countries?"
Ryan Zagone's answer:
"I agree with a lot of the comments earlier that 'certainty is the prerequisite for adoption.' That's pretty well-founded, and it's global in scope...
...Countries are now recognizing there's potential to be a leader there, so that they can become a global capital of finance."
He then went on to expound on the progress that many countries - notably other than the US - are making in regards to establishing clear guidelines for crypto regulation. This is a topic that both Brad Garlinghouse and Cory Johnson also covered consistently in separate presentations, all within two weeks of each other. It signals the continued, concerted attention that Ripple is giving to regulation in advance of the second SWELL conference, in addition to xRapid's production rollout later this year.
Cory Johnson at ChainXChange
ChainXChange is a conference that focuses on blockchain technology and its impacts on various categories of technology, finance, social change, and content, including: 13
- Artificial Intelligence
- Sports, Media, and Entertainment
- Transactions, Currency and Fintech
- Internet of Things & Foods
- Non Profit and NGOs
The conference was held in Las Vegas at the Mandalay Bay Convention Center between August 13th and 15th, and included speakers such as Steve Wozniak (co-founder of Apple), Nicholas Thompson (Editor in Chief, Wired Magazine), Lilia Infante (Special Agent, Department of Justice / DEA Cyber Task Force), and Cory Johnson (Chief Market Strategist, Ripple), among others. 14
On September 2nd, the convention released video of one of the events that included Cory Johnson from Ripple participating in a panel discussion titled "Our Digital Economy: To Crypto and Back." The panel participants included:
- Jessica Versteeg, CEO, Paragon Coin
- Tom Lee, Founder and Managing Partner, Fundstrat
- Paul Krugman, Nobel Laureate Economist, NYT
- Lilia Infante, Special Agent, US DOJ
- Cory Johnson, Chief Market Strategist, Ripple
The beginning of the discussion focused on the dark web use case for Bitcoin, but Cory Johnson did manage to interject an introduction about XRP.
The conversation then shifted to more serious topics about future use cases for digital assets, and Cory Johnson expounded on some of the philosophical underpinnings of decentralized currency. He emphasized his disgust for the "store of value" use case, and indicated that XRP is focused on actual utility.
The facilitator also provided a platform for Paul Krugman, the Nobel Laureate Economist from the New York Times, to indicate why he was skeptical of the new financial instrument. He continued to repeat his question "what problem does it solve," but fell into the trap of using Bitcoin as his centerpiece for arguments.
Later, one of the facilitators asked Cory Johnson to talk about the difference between economics and 'token-omics,' and then handed the discussion to him. Here are some of Cory Johnson's comments:
"You had a presentation where you suggested 'What if a certain percentage of the global investment assets went into crypto?' Well, what if they went into Beanie Babies? There's no functional reason for them to go into crypto, until we develop more use cases like Ripple."
That re-emphasized his disdain for Bitcoin's 'store of value' use case. In addition, he took the opportunity to remind the audience of the facts about how much progress Ripple has made in laying the foundation for actual financial industry usage of digital assets:
"Ripple is further out ahead than just about any other company... in developing actual, very frequent use cases using... digital assets."
He re-emphasized some of the points made by Brad Garlinghouse about the lack of regulatory certainty that is causing some impatient entrepreneurs to consider basing their new blockchain businesses in other countries:
"I think the US is, without having a clearer policy on how it (digital assets) is going to be governed, is risking ... having this major technology ... not happen here... "
Paul Krugman and Jessica Versteeg then exchanged some animated points about a 'trust economy' versus a 'distrust economy,' with Jessica Versteeg using populist points to rouse applause from the audience. While entertaining, this matching of wits didn't provide much new perspective.
Towards the end, Cory Johnson was asked (along with the entire panel) "If you could change one thing about crypto, what would you change?" His answer:
"Regulatory certainty is something that would really help the industry... I think the rules of the road are not clear."
Paul Krugman's answer to the same question was intriguing:
"If there's a way to do this so that the transaction costs come down to a conventional means of payment, then it would remove my major objection."
Of course, for XRP fans, hearing this comment provided all the encouragement we need:
A Coil fan recently published a step-by-step instructional blog on how Wix website owners could integrate their content with Coil: 15
His blog outlines at the lowest level of detail how content creators using Wix - which is a large number of website hobbyists - can easily sign up for Coil payments.
Coil is accepting applications for those that would like to use their service, however, they have not yet activated payment processing for the general public, which is necessary for the site owners to get paid. Until then, however, content creators can prepare for web monetization by following the steps contained in Avi's blog.
XRP Retail Payments
There's a lot of individual operators and XRP fans that want to see XRP used in retail. After all, we have the XRP, and we have wallets to store that XRP on mobile phones that travel with us to any destination, right? So many of us have been wanting to see our favorite restaurant, shop, or service professional accept crypto - specifically XRP.
Recently, one XRP Twitter fan asked Paytomat, an application that offers payment solutions for retail establishments, whether they would add XRP support:
It's one additional option to keep in mind when small businesses consider whether - and how - to accept crypto payments.
XRP Developer's Corner
On the bleeding edge of high-tech payments streaming, WietseWind isn't content to rest on his accomplishments - of which there are many. Instead, he spent some time recently constructing ILP-enabled wall outlets!
The idea is still in its early stages, however the project could set the stage for individual home owners to bypass the local utility company and sell their extra power to others directly. It's a fascinating idea that will enable individuals to leverage their unused energy from self-created sources such as solar, wind, or other means.
Ripple-lib Version 1.0.0
"We are pleased to announce the release of ripple-lib version 1.0.0!
The new version includes all new method calls, data validations, and changes in returned object contents. For details about the new version, developers can consult the release blog, or the ripple-lib documentation in the XRP Ledger Dev Portal.
Python Library for Ripple API
A Python developer recently released code that will facilitate Python calls to the Ripple APIs:
"I have created small library to access ripple API, currently it supports JSON-RPC and Data API. For now it's just a wrapper for almost all API calls to make its usage easier. Next I will add methods for signing and sending transactions as well."
The location of his Github repository is here: https://github.com/arsenlosenko/python-ripple-lib
The Journey Awaits
Along the way, many crypto explorers have recognized the potential of XRP and have joined in the trek.
In 2018, we've watched and participated in XRP's progress, cheering as WietseWind championed XRP through many community-driven innovations, and other developers like RareData helped to strengthen the security of XRP developer tools for individual hobbyists and fan-made XRP Ledger interfaces.
We've watched as Coil completed the first stage of web monetization.
And the community tracked Ripple's progress as it methodically addressed adoption challenges, regulatory uncertainty, and nuisance lawsuits. Ripple hasn't been distracted by these inevitable symptoms of its fast growth, however, and has provided unyielding leadership for banking and international financial organizations looking to leverage real-time payments.
The journey of a thousand miles began with a single step; but anybody can join XRP in its completion of this epic adventure. Will you finish the journey with XRP as 2018 enters its final stage?
Sources and Credits:
Cover Art: Thank you to Vlad Bagacian