Crypto Adoption for the Masses: Finding the Path Forward

Hodor

Hodor

I blog about Ripple & XRP. FULL DISCLOSURE: All views are my own. I do not work for Ripple; I am not a professional financial analyst, and the majority of my crypto holdings are XRP.

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Cryptocurrency is suffering from growing pains.  

We can see this reflected in our collectively-stunted size at present;  the cryptomarket capitalization stands at roughly one-third of Amazon.   And that's if we count all the cryptocurrencies including Bitcoin and XRP.  1  The volume is atrocious as well.   The worldwide market for ForEx clocks in at over $5 trillion per day, while the cryptomarket is lucky to break $20 billion on a good day.  2  And the volatility in the cryptomarket?   It's become legendary.   While some traders have made their fortunes, others have lost them as well.  

So what will pull the entire industry out of its current state and propel it forward?   Most of us agree that we need to arrive at crypto's utility and use by mainstream financial customers.   Who are these mainstream financial customers?   They are comprised of the 'everyday person' who wants to be able to store their value securely out-of-reach of others, but yet possess the convenience of sending that value to a friend or family member when necessary, no matter where they are in the world.  

Intuitively, we understand what's necessary for most ordinary people to start using crypto.   It has to be fast, fun, and friendly.   They must feel comfortable and confident in its use, and they must feel reasonably safe trusting its use and knowing that their money is protected just as it would be in other mainstream financial services such as banks or credit cards.  

Since cryptocurrency networks are natively comprised of irreversible financial transactions, does this imply that a central authority needs to build an application to support these additional characteristics?   Perhaps.   We might need an Apple-esque service to make owning and using cryptocurrency seem as safe and easy as using a credit card.   Some of these services are already starting to spring up, to the delight of most of us looking to use crypto for everyday purchases.  

We're almost there.  

We need to see more crypto banking sites, more user-friendly mobile apps, and perhaps full bank account integration, where we can transform our fiat balances into any cryptocurrency of our choosing.   Some of these services are on their way, and we'll need more of them to appeal to people in all walks of life.  

One thing you can be sure of:  When crypto joins banking, it will reach billions of people that the retail banking market currently excludes.  Cryptocurrency doesn't care about your financial status - anybody can own it, and anybody can store their value.  

Crypto may not be mainstream yet, but when it happens, we'll know.  

General Crypto News

The United States' Securities and Exchange Commission (SEC) recently launched a new "Fintech Hub" to provide more of its surface area to the fintech space.  

Announced on October 18th, the SEC indicated that this effort will include a new sub-domain on its website devoted to emerging fintech products and companies.   As quoted in the announcement, the purpose of the hub includes the following points:  3

  • Provide a portal for industry and the public to engage directly with SEC staff on innovative ideas and technological developments;
  • Publicize information regarding the SEC's activities and initiatives involving FinTech on the FinHub page;
  • Engage with the public through publications and events, including a FinTech Forum focusing on distributed ledger technology and digital assets planned for 2019;
  • Act as a platform and clearinghouse for SEC staff to acquire and disseminate information and FinTech-related knowledge within the agency;   and
  • Serve as a liaison to other domestic and international regulators regarding emerging technologies in financial, regulatory, and supervisory systems.

The FinHub site is nicely designed, and provides some basic information, mostly focused on investor protection, to readers.  

However, there is much work to be done, because I do not see a clear taxonomy about "why a cryptocurrency could be considered a security," beyond links to some of their publicly-issued statements on related topics.   The United States is noticeably lacking a clear taxonomy of when and why a cryptocurrency may be considered a security.  

The risk in continuing to do "administration through enforcement" is that businesses will regard this as a substantial risk, and locate elsewhere throughout the globe in jurisdictions that have clear fintech regulatory frameworks.   However, the creation of the new hub is a positive step, and the SEC also indicated that it would be planning its second fintech forum, devoting the meetings to blockchain and distributed ledger technology (DLT).  4

Ripple News

Cointelegraph conducted a fascinating introduction to Ripple via a rolling interview with Cory Johnson at the Ripple headquarters in San Francisco.   Molly Jane Zuckerman conducted the interview:

The video was an intriguing introduction to Ripple and its San Francisco office space, showing an insider's view of how the company operates in its physical headquarters in California.  

Cory Johnson took the opportunity to emphasize some talking points, and the video contained a cameo appearance by David Schwartz, Ripple's Chief Technology Officer.   He provided a quick overview of the state of decentralization of the XRPL as compared to the older, proof-of-work systems like Bitcoin:

"The XRP Ledger is decentralized because no organization or individual has any legal right or ability to control it.   Every participant enforces every single rule and the system is governed by all of its participants.  

I think while proof-of-work has kind of proven to be a dead end and hasn't produced any technological innovations of any significance, nor has it - it's produced actually increasing centralization in systems based on it;  There's a lot of work to improve the decentralization and improve the robustness of systems based on distributed agreement protocols.

Historically, the XRP Ledger, as the stakeholders have broadened, has become more decentralized than the influence of any single participant's (influence), and we would expect that only to continue over time."

The tour of Ripple headquarters continued, with Cory Johnson answering a wide variety of questions covering XRP topics and also topics about Ripple and its customers.   The office seemed massive in the video, and indeed, Cory Johnson admitted that the company had recently expanded from two floors to three in the San Francisco office alone:

Question ( Molly Jane Zuckerman):  "There's, you know, there's three floors, so how often does everyone get together?"

Answer (Cory Johnson):   "That's important, there were two floors only a few weeks ago.   We are growing like crazy, we've got offices all over the world, literally.   Here in San Francisco, in New York, in London, in Luxembourg, in Mumbai and Sydney ...  

...  it's a fun place to work and we're trying to make sure it's a fun place to work, because we want to bring the best and the brightest."

The video contains a lot of great content to share with others if you have a friend or family member that may be curious about the biggest company championing worldwide adoption of XRP.   I recommend bookmarking this video - it's more than just a dry introduction, as it provides an inside look at some of the intangible pieces of how Ripple is run on a day-to-day basis.  

xRapid and xCurrent

One connection that's been interesting to make is how many xCurrent customers eventually opt-in for using xRapid, Ripple's liquidity-sourcing solution that can utilize XRP for settlement.   Thus far, it's been speculation, along with some statements that are occasionally made during conferences or in press releases.  

We know that remittance processors seem very interested in using the solution as well as some early-adopter banks and credit unions;  and now recently, we learned that some Ripple customers have been adding xRapid into their mix after first adopting and trying xCurrent:  On October 20th, an XRP fan noticed that a document published by Deutsche Bank's Corporate & Investment Bank contained some information about this connection:  5

"Mr Birla reports that some banks using xCurrent are now looking to use xRapid for the second phase of their projects.."

It was an intriguing reference, and the document itself is dated "July 2018," which is even more noteworthy, given that any 'second phase' of a project with xRapid may have already entered testing by now.  

Sadad

Sadad is a payments and remittance company headquartered in the Kingdom of Bahrain, a small, island country in the Persian Gulf with roughly 1.5 million people. 6  Sadad is a modern company, with a kiosk-based banking approach whereby customers can send money or pay a variety of bills from 750 locations around the country.  

In addition, the company supports an online application that people can use to make payments or send money, available on both IOS and Android.  7

On October 19th, an XRP community member observed that a page of Sadad's marketing material contained a reference to xRapid, which surprised not only him, but others, since this company hadn't been included in formal announcements by Ripple:

Sadad Marketing material

Before becoming too excited about this information, keep in mind that no formal announcement has been made - by Sadad or Ripple.   In fact, despite the fact that the marketing material looks genuine, it was found on a site run by a conference (Gitex), not the corporate headquarters for Sadad. 8  As such, there's no secondary data point yet that would absolutely confirm Sadad as a customer.  

However, it may turn out that the XRP Community managed to identify one additional xRapid customer before a formal announcement.  

Money 20/20

Money 20/20 is a series of conferences focusing on both payments and fintech. 9  The conference series began in 2012, and now boasts an impressive list of keynote speakers and panel discussions and interviews.

The next conference is the US version, scheduled from October 21-24 at The Venetian in Las Vegas.  10  The keynote speaker list includes Chris Larsen:

Chris Larsens profile

Ripple published an Insights piece detailing its plan for attending the conference, and it's evident that the company regards this conference as one of its most important media contact events.  11  In addition to Chris Larsen, Chief Technology Officer David Schwartz, Senior Vice President of Business and Corporate Development Kahina Van Dyke and Senior Vice President of Product Asheesh Birla will all be contributing as well.  

Chris Larsen closes the conference via a conversation with Arjan Schütte, the founder and managing partner of Core Innovation Capital.  

From Ripple's Insight article, the event should prove to have some exciting content;  some fan videos have already leaked out to the public, such as a clip of David Schwartz's debate.  

The conference has a history of publishing its content on YouTube as events proceed, so most likely we'll be able to access video on their channel, located here:   Money 20/20 YouTube Channel.  Ripple also indicated for those interested to check their corporate Twitter account.  

Thus far, Ripple has published some coverage of specific sessions, which can be found on their Insights page.

Flutterwave

Flutterwave is a new company that recently completed a financing round on October 14th of this year.  12  They are headquartered in San Francisco, and their business centers on a business payments platform.   They seem to cater to businesses looking for a convenient way to tie in vendor payments with an internationally-easy application, taking the work off of the shoulders of small-and-medium sized accounts-payable departments.   This is a growing trend, as small-and-medium sized companies can simplify global supply chain payments, helping them to compete with the larger players in their market.  

They recently completed an integration of their platform with Ripple's xCurrent and xVia solution.  

Flutterwave's flagship service is known as "Rave" which seems to be a mobile payments platform similar to others such as Venmo;  the user is expected to enter their bank account information as a payment source to jump-start the service after down-loading the mobile app.  13  14  "Rave" seems to have a corporate payments focus, according to Flutterwave, and interestingly, the company is specifically including Africa as one of its target coverage areas.  

Seeing a new payments platform like Flutterwave integrating with Ripple's ILP-based solutions is something that I expect to see more of, as more and more banks and other financial institutions become members of RippleNet.  

ComBank

Julian Williams, an XRP Chat member, noted an announcement in an online magazine called "Island LK," regarding a new RippleNet member bank. 18

The Commercial Bank of Ceylon, or ComBank for short, can trace its roots back to 1957;  it had different names and ownership over the years, but eventually resulted in what is now called the "Commercial Bank of Ceylon."  19  On October 22nd, they announced that they were joining RippleNet.  The article provided the following insight:

"... Additionally, while traditional remittance measures require a third-party that handles the authorisation and release of the payment, blockchain removes the requirement for a middleman.  This decentralised structure is one of the primary reasons the remittance process happens faster and costs less."

It was great to see yet another international bank joining RippleNet like many others, and it is the second major bank announcement to originate from Sri Lanka in two months;  the earlier announcement was about Cargills Bank joining RippleNet in August of this year.  20

AFP Conference

The Association for Financial Professionals, or AFP for short, is holding a conference in Chicago from November 4-7.   A wide variety of financial companies, fintech companies, and banking organizations will be in attendance.  15

On Tuesday, November 6th, a panel session titled "Taking Advantage of New Technologies in Payments Strategy" is scheduled with five individuals:

  • Steve Bernstein, US and Global ACH Business Development Manager, J.P.  Morgan
  • Ryan Gaylor, Director of Corporate Payments, Ripple
  • David Scola, Head of North America, SWIFT
  • Kris Filipkowski, Deputy Treasurer, Marsh & McLennan
  • Moderator:  Elizabeth St-Onge, Partner, Oliver Wyman

Of course, it's intriguing that both SWIFT and Ripple will be participating in the same panel discussion, and should prove fascinating to watch.   The panel description was fairly generic, but provides an opportunity to hear about Ripple solutions and SWIFT GPI at the same time:

"The changing payments landscape has given rise to phrases like real-time payments, distributed ledgers, and blockchain, bringing expectations of reduced fraud, lower transaction costs, increased speed, and a proliferation of transactional data.  What does this mean for those in treasury?"

We know that using Ripple tech results in a simplification in payments reconciliation for corporates and SMEs, so that topic is what I'd consider to be in the 'sweet spot' for what Ripple can do for treasury operations.   The conference takes place in two weeks, and the AFP has a history of posting their content to YouTube;  perhaps we'll be able to see first-hand how the panel discussion proceeded on these topics.  

XRP News

Over the last few days, two new fan sites have bubbled up in discussions on social media platforms, highlighting some of the projects being sponsored by XRP Community members.   One is a site created by a long-time supporter and Tweeter Kieran Kelly, and the other one was created by an XRP Community developer on Reddit.  

Here's a quick preview of both:

XRP.CO

Kieran Kelly (Twitter) created a site that will dynamically pull statistics about XRP from various sources and display them in a summary fashion.   This primary role of his site is one that many would use if they are looking for a quick-check on XRP status, statistics, or overall cryptomarket volume.  

screenshot of xrp dot co

In addition, he stated that it will eventually link to community-sponsored information about XRP and its ecosystem as well;  its long-term goal would be to become a convenient central hub for accessing charts, data, and also supporting information about the crypto-asset.

Note that XRP.CO is still under development, and will contain some of these advanced features at a future date;  I will include an update when its additional functionality becomes available.

xrpscan.com

For crypto fans that are familiar with the Bitcoin block explorer, or Etherscan for Ethereum, the new XRP scan website provides a familiar-sounding name and design for them to easily make the switch to XRP.   It's design has a similar look-and-feel to these other two sites:  16

screenshot of XRP Scan

"localdomain" (Reddit avatar) is the creator of XRP Scan, and he indicated:

"The look and feel of XRPScan is intentionally kept similar to other popular BlockChain explorers like BlockChain.info and EtherScan so that people who are trying out new coins find themselves right at home and feel comfortable trying out XRP."

The other inspiration that he drew from in reference to Etherscan was its focus on user-created tokens.   On the XRP Ledger, users can create tokens much as they can on Ethereum.   He discussed how this feature doesn't seem to be getting enough attention, and that Etherscan - and now XRP Scan - helps bring attention to these new, user-created tokens:

"In XRPScan the Currencies and their Issuers are first class citizens.  Every currency is treated on par with XRP.  This model helps paint a picture that XRP is in some way also used as a Gas for using the DLT system.  Time and again on various forums there's a constant complaint from skeptics that nobody needs XRP to use the Ledger.  But one look at the Ledger page would make it clear how XRP powers the Ledger and burns away."

His statement is a reminder that those new to XRP - who may not know or understand about some of these basic characteristics of the network - that a very small amount of XRP is 'burned' for each transaction, which results in a very slowly diminishing supply.  

Both XRP.CO and XRPSCAN.COM may prove to be two very popular sites going forward;  convenience and utility seem to be a driving characteristic for third-party crypto site usage.  

XRP United

XRP United is a new, Estonia-based crypto exchange that uses XRP exclusively as the base currency.   The founders of XRP United are also members on XRP Chat;  they created a thread to answer more detailed questions about their exchange, and had this to say:  17

We are a small international team;  (our) company is based in Estonia and we are indeed a licensed and regulated entity ...

...The only fiat currency we operate at the moment is euros in and out, but plans are to expand from here to who knows where.   We're starting with small amount of XRP pairs and grow it up from there.

Some key points about the exchange:

  • Trading is done off-ledger
  • XRP is used for withdrawals and deposits
  • XRP is used as the base currency
  • Not funded by an ICO

The company released a promotional video with their exchange launch, and it had the same look and feel as an epic movie commercial, which I found quite effective;  it definitely makes an impression:

P3T3RIS (XRP Chat avatar) indicated that another video would be forthcoming in the next few days to demonstrate more details of the exchange and its interface.

The creation of this exchange by a small group of XRP fans on XRP Chat has caught the attention of the community, and may result in sizable numbers of XRP-centric traders giving the new exchange a try in the coming weeks.   It's an additional European on-ramp for crypto investors.

My hope is the exchange is able to reap some profits and then - as they indicated - add more fiat-XRP pairings as time moves forward.

We Already Know What's Missing

Ordinary people need a crypto-asset that can keep pace with their lifestyle.   They need to be able to send and receive payment within seconds to friends and family members on a peer-to-peer basis.   Businesses need the same, with the assurance of complete real-time settlement, and advance knowledge of all fees.  

The current banking system cannot provide these characteristics.   While leaders of SWIFT pretended not to know about Ripple technology, the rest of the world is catching on quickly.  

At SWELL, we watched as bank after bank highlighted how Ripple's DLT solutions are driving their costs down to a fraction of their previous levels, and are now seriously considering using digital assets to quickly move money across borders.  

The ambassador for crypto will not be networks that settle in fifteen minutes or in an hour, but ones that can do it in the span of four seconds or less.  

The world is changing, and there's no turning back the clock based on wishful thinking;  the global transformation of banking is well on its way.   XRP has the potential to reach all people in all walks of life, giving them the ability to earn and store value no matter their access to traditional banking.   XRP's value is border-less, bringing the transformational potential of cryptocurrency to anybody that wants to participate.  

It's time:  We need the crypto market to agree on the one, best ambassador for reaching those in the 'ordinary world.'
xrp symbol
Sources and Credits:
Cover Art: Thank you to Chris Barbalis

  1. https://coinmarketcap.com/
  2. https://en.wikipedia.org/wiki/Foreign_exchange_market
  3. https://www.sec.gov/news/press-release/2018-240
  4. https://www.forbes.com/sites/michaeldelcastillo/2018/10/18/sec-launches-fintech-hub-to-engage-with-cryptocurrency-startups-and-more/amp/?__twitter_impression=true
  5. http://www.cib.db.com/docs_new/The_Banker_Cash_Management_Guide_July2018.pdf
  6. https://en.wikipedia.org/wiki/Bahrain
  7. https://sadadbahrain.com/
  8. https://todaysgazette.com/bahrains-sadad-with-kiosks-in-over-750-locations-deploys-ripples-xrapid/
  9. https://us.money2020.com/about
  10. https://us.money2020.com/hotels
  11. https://ripple.com/insights/ripple-leadership-front-and-center-at-money20-20/
  12. https://flutterwave.com/us/blog/flutterwave-completes-series-a-extension-round-of-financing-former-visa-chairman-and-ceo-joins-board/
  13. https://support.flutterwave.com/article/84-managing-bank-accounts
  14. https://developer.flutterwave.com/docs
  15. https://conference.afponline.org/general-information/about-the-event/faqs
  16. https://www.reddit.com/r/Ripple/comments/9q5nju/xrpscan_the_xrp_ledger_explorer/
  17. https://www.xrpchat.com/topic/28343-xrp-united-the-first-full-xrp-based-exchange-now-live/
  18. http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=193161
  19. https://en.wikipedia.org/wiki/Commercial_Bank_of_Ceylon
  20. https://www.cargillsbank.com/cargills-bank-joins-ripplenet-for-cross-border-remittance-blockchain/

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Hodor

Hodor

I blog about Ripple & XRP. FULL DISCLOSURE: All views are my own. I do not work for Ripple; I am not a professional financial analyst, and the majority of my crypto holdings are XRP.

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