The raw number is staggering: 2.5 billion adults do not have a bank account.
This number can be further broken down: 59% of adults in developing countries - and 11% of adults in high-income economies - are considered 'un-banked.' Overall, roughly three-quarters of the world's poorest people do not have a bank account. 1
There are multiple reasons for this situation in addition to the obvious one - lack of money: They include the cost of opening or maintaining an account, and 'geographic remoteness,' the term generally applied to a lack of banking options where people live.
And large correspondence banks are part of the problem, not the solution.
As the big correspondence banks have cut relationships and 'de-risked' as it's called in the industry, many residents in the far reaches of the world have been left to rely on informal sources of credit and banking services. 2 This has resulted in financial abandonment of the associated populations. 3
It includes, unfortunately, some of the poorest areas of the world, and the end-result is the opposite of what the International Monetary Fund (IMF) would prefer; one of the IMF's objectives is to reduce world poverty, and as more people make do without banking services, their access to credit and other means of helping themselves decrease, creating a heavy weight around the necks of those that have the least.
The IMF has recently shown a strong interest in new banking technology, specifically the type created and used by Ripple; 'distributed ledger technology,' or its closely related cousin, 'blockchain technology.'
The IMF is specifically interested in countering the global trend in banking service reduction by the large correspondence banks, and in making value move more efficiently and frictionless across borders. They have also taken a strong interest in crypto-assets, with Christine Lagarde prompting central banks to examine these new financial innovations.
Parallel to the trend of large correspondence banks' contraction of banking relationships has been the creation and championing of new technology to extend the reach of credit to those that need it most. A few notable champions have emerged in this respect, using the latest Silicon Valley know-how to bring about new modes of banking and finance.
If there is one Silicon Valley executive that symbolizes the extension of banking and credit services using technology, it is Chris Larsen, the Chairman of Ripple's Board of Directors, and one of the original founders of Ripple.
Chris Larsen was one of the first trailblazers when it came to using the Internet for processing mortgage applications in the 1990's, guiding his company, E-Loan, to consistent profitability before leaving to start Prosper Marketplace, a company that created a peer-to-peer lending platform. 4
In 2012, he co-founded OpenCoin, which would later become Ripple.
He has also served in a volunteer capacity on the Silicon Valley Community Foundation's policy committee against predatory lending, doing his part to help protect vulnerable borrowers. And after founding Ripple, he established RippleWorks, a nonprofit foundation, whose goal is to assist entrepreneurs establish and lead 'high-impact' social ventures. 5
This track record - both professional and volunteer - exemplifies his commitment to extending financial opportunities to those that need it the most.
In addition to business visionaries like Chris Larsen, nonprofit organizations fighting poverty have also been taking a look at DLT and the technologies underpinning this new field.
Combating global poverty is a daunting task.
In addition to problems brought about by armed conflict, drought, famine, and natural disasters, several large nonprofit foundations have been looking at it from the lens of financial inter-relationships. As the proportion of the world's un-banked grows, the ability for local communities in developing regions to self-determine and sustain themselves diminishes; therefore, reaching out with financial services and access to credit has become one of the objectives of these organizations.
Mojaloop was formally unveiled in 2017 as a collaboration between the Bill & Melinda Gates foundation and a number of technology companies, including Ripple. Mojaloop is the name given to a collection of services, software tools, and modes of using mobile technology to create new financial applications. Its open-source code repositories have been made available to developers on Github.
The centerpiece of these new tools? The Interledger Protocol.
ILP underpins the Mojaloop set of tools, and the Bill & Melinda Gates Foundation have worked closely with both Ripple, and now Coil, to develop and maintain this suite of tools.
In many areas of the developing world that the Bill & Melinda Gates Foundation aims to help, mobile technology and financial applications have completely leapfrogged the traditional banking system. In absence of these traditional correspondence banks, the new tools made available as part of the Mojaloop platform can enable the creation of mobile-based access to credit and banking applications.
If Mojaloop can open the doors for these types of services, it has the potential to connect billions of people to the global economy that have been disconnected until this point.
And as more and more people use these services and tools to raise themselves out of poverty, the entire world may end up reaping the rewards, realizing massive value generation where there was previously little-to-no hope, and energizing a new, much more interconnected economy.
All parts of this new economy stand to benefit from the use of financial innovations such as digital assets, smart contracts, and micropayments.
Who To Follow: Chris Larsen & Mojaloop
The extension of high-tech banking services - microloans, micropayments, sharing economy applications, smart contracts, and digital assets - is something that will have a profound impact.
For those of us that are interested in both XRP and its ecosystem of IoV components, it's for this reason that I recommend following Chris Larsen and the Bill & Melinda Gates Foundation's Mojaloop project.
The importance of championing financial inclusion cannot be overstated; if you have any doubt about the potential scale of benefits from the Internet of Value, think about what billions of people can do if they are able to contribute their work and creativity!
Ripple's Xpring investment in collaboration with Forte has been making waves steadily since the official announcement on March 12th, with coverage by mainstream news media, crypto outlets, and on social media. 6
The investment involved the creation of a $100 million-dollar fund that will be used to invest in specific projects, teams, and businesses that use FortePlatform and Ripple technology to integrate digital assets and gaming. Forte has also received investment independently from firms like Andreessen Horowitz. 7
Founders of Forte came from Kabam, GarageGames, Unity, and other gaming-related companies. 8
In a follow-up on March 25th, Martine Paris from Modern Consensus interviewed former Kabam COO Kent Wakeford about the collaboration with Ripple and about Forte's role in the quickly-evolving gaming landscape.
Here's a few questions and answers that were key in understanding the partnership between Ripple and Forte: 9
Question (Martine Paris): "In the battle of the game engines with Unity and Epic duking it out, might we possibly see a Forte reveal at a GDC keynote next year?"
Answer (Kent Wakeford): "That's the space we want to play in, that's what we're building, a blockchain game engine with plug-ins for item tokenization, distributed hosting of assets, ID management, side chains, and more."
Question (Martine Paris): "What are your thoughts on Google's Stadia announcement?"
Answer (Kent Wakeford): "I love what Stadia is doing. The Technology is super hard and involves the ability to go in and play via streaming a high definition game at high frame rates with multiplayer and zero latency.
If anyone can pull it off, it's Google. If they do, it changes the distribution of games. Why would you need a console anymore? What happens with Game Stop and the various app stores? If you can do this with a console game, you can do this with a mobile game.
Now you can just watch game-play with influencers on YouTube and hit play, or click to buy. That changes game discovery, purchase behavior and the unique aspects of view-ability and community that can be built around YouTube.
Stadia has the potential to disrupt the entire industry."
Question (Martine Paris): "Many believe the path to mass adoption of blockchain will come from gaming, but what incentive is there for top developers, like Epic Games who earn billions of dollars on Fortnite, to add blockchain products like non-fungible tokens (NFTs) to their games?"
Answer (Kent Wakeford): "I fundamentally and wholeheartedly agree that gaming is going to be the killer application for blockchain. From platform to platform, gaming has been the leading application that drives both revenue and engagement. That was true for Facebook and Apple. History is telling us the fastest growth comes from gaming ...
... The blockchain ledger shows the provenance of every item, where it's traded, who owns it, and tracks payments. Now developers can participate in the aftermarket and every trade in perpetuity. That opens up a whole new market for any game with items where consumers invest their time or money to collect them.
New game dynamics and peer to peer economies will arise as consumers change their game-play to earn more of the items. Chasing items will create its own kind of game design."
Question (Martine Paris): "What is Forte's relationship with Ripple?"
Answer (Kent Wakeford): "Ripple believes that consumer behavior and mass market adoption of blockchain and crypto is likely to first come from the gaming community. What we at Forte are enabling is the ability for these game developers to access blockchain in their new or existing games.
Through our platform we are having XRP as a settlement currency for when people trade or sell NFTs.
We are also leveraging Ripple's Interledger technology which allows for some nice advancements in smart contracts."
The interview revealed quite a bit about Forte's approach, and indicated that they were intent on both building out the tools for other developers to use to integrate with any crypto network, and also a "blockchain game engine," which indicates an ambitious scope. When developers use that term, they typically mean all of the tools necessary to build a game.
A game engine will require a significantly-sized team of engineers and developers, to consider such things as latency, user experience, distributed architectures, code libraries, and perhaps even an 'example game' or two.
This revelation, plus a confirmation that XRP would be used to settle all sales of 'non-fungible tokens' (NFTs), was great news, albeit expected based on the size of the Xpring investment.
An NFT can be thought of as a digital equivalent to a unique game item. It's identity can be confirmed using cryptographic means. One example would be a unique sword that you discovered inside a role-playing fantasy game. The sword can be thought of an a non-fungible token whose ownership can be tracked to you specifically, along with its uniqueness or rarity.
Once Forte's platform is in place and being used, you should then be able to 'sell' this sword in a digital marketplace for XRP.
Kent Wakeford may be correct; this use case may be the first use case to provide levels of utility-driven demand for XRP that are competitive to speculative-fueled trading.
Many XRP traders don't know the full capabilities that XRP has as part of its base list of features; this list is extensive, and includes a complete decentralized exchange, the ability for users to issue their own IOUs, escrow functions, payment channels (off-chain transaction processing), and a component called 'multi-sign.'
Multi-sign, if done properly, increases the security of an XRP wallet by requiring the signatures of multiple individual parties to make a transaction process successfully.
This group of people can also decide the number of approvals necessary before a transaction can take place. This concept is known as a 'quorum.'
Ordinary Business Users Frown At Technical Details
Multi-signing is one of those topics that 'sounds cool in concept,' but when you ask crypto enthusiasts about real-life examples of setting up a wallet on a crypto network that requires multiple signatories to send a transaction, the explanations can quickly run into many paragraphs.
It's something that turns off ordinary, everyday business users of crypto-assets.
The functions available through cryptographic networks have a myriad of use cases, and support equivalent 'brick-and-mortar' fiduciary responsibilities in a highly secure electronic format. The concept is sound, but in practice, developers need to make blockchain capabilities more accessible to business end-users.
As an example of how applications can simplify the user experience for XRP Ledger features, Wietse Wind created a tool to help XRP owners manage a multi-sign enabled wallet:
The tool that Wietse constructed will essentially 'compose' a transaction from a quorum of signers that have been identified on the signor list for the account. He created a YouTube video that demonstrates how the tool works, and showed an actual transaction that takes place on the XRP TestNet:
The composition of the transaction takes place offline, where the secrets of each account can be entered and submitted. The transaction is then 'signed' by each of the individual participants, and a secure hash is created, which can then be transmitted to the live network.
The tool, while perhaps not meant for retail bank users, provides a base layer of functions that greatly simplifies the construction of a multi-signed transaction. Wietse Wind calls it, simply, the "XRPL MultiSignTool."
XRPL MultiSignTool Source Code
Wietse Wind is not charging users for the tool, and is instead opting to provide it for free through his Github repository:
Kudos to Wietse Wind on the new tool; I can't wait to see other amazing front-ends that users choose to create that may simplify user access to the XRP Ledger and its fantastic personal banking functions.
@baltazar223's Weekend Project
If you don't know by now, @baltazar223 is the Twitter avatar for Ali, one of the three original members of XRPL Labs, which received Xpring funding this year.
In a recent tweet, Wietse Wind revealed that Ali had constructed a device that will light up each time a tip is received for the XRP Community Fund, which is used to fund bounties for developer work on XRP payment plugins, scripts, and applications:
The tweet included a link to a Periscope video where both Wietse and Ali introduce the topic a bit more before freeze-framing the camera on the light switch.
The project, in addition to bringing needed attention to the XRP Community Fund, was also a coincidental reminder about the innovation that Wietse built last year; a power switch that activates when an XRP payment is received.
Wietse's creation represented an example of the intersection between the Internet of Value (IoV) and the Internet of Things (IoT).
Essentially, a connected device could 'activate' when a user sends in a payment. This could conceivably be used to activate power sockets at a coffee shop or in an Internet cafe, or could even be used to activate sharing economy devices such as scooters if a payment is received.
The market for this innovation will be as large as the imaginations of the entrepreneurs that decide to use it; and in this case, a light bulb is a perfect metaphor for Wietse's creation: Congrats to Ali on his weekend project! It proves out that this concept can be duplicated by other developers that are interested in exploring this combination of technologies.
Send XRP Through MS Outlook
The XRP Tip Bot made sending XRP fun and easy for many end-users; while it started out on social media, the XRP Tip Bot has now found its way to a mobile application, a central website, and now other developers are starting to create applications that integrate with its open-source code.
The latest addition to the XRP Tip Bot ecosystem is a creation by @SchlaubiD (Twitter avatar):
Like on Twitter, the recipient of the XRP Tip through Outlook doesn't need to have an XRP Tip Bot account. After they receive a tip, the recipient will also receive an additional email from the MoneyMessage site, instructing them on how to access the funds.
It's an interesting innovation that extends the XRP Tip Bot to a new frontier: email!
The site linked in @SchlaubiD's tweet contains a link for those interested to download an executable file to install an application on a Windows-based computer.
When I reached out to @SchlaubiD with some additional questions, here's what he said:
Question (Hodor): "Do you have plans to (eventually) make your code open-source?"
Answer (@SchlaubiD): "Currently not on the top (but it is) of the to-do list. It mostly depends on interest and usage of the project."
Question (Hodor): "Do you plan on taking some further steps for development of this tool?"
Answer (@SchlaubiD): "Also depends on interest and usage, but yea: It's a great pleasure to work on XRP projects! I'm always open to new ideas, extension, etc. My vision is an instant settled payment transaction within seconds from end-to-end, where none of both entities has to care about crypto assets.
If my grandmother cannot handle it, it's not yet simple enough!"
Question (Hodor): "Do you plan on creating some further projects that integrate with the XRP Tip Bot?"
Answer (@SchlaubiD): "Currently I don't have any others XRPTipBot integrations in the pipeline. But I'll never say never. http://communityfund.xrptipbot.com is a great platform to check people's interests. Depending on promising projects I'm willing to reduce my monthly regularly payed working time."
Question (Hodor): "How should developers and/or users contact you if they have some questions?"
Answer (@SchlaubiD): "I would prefer mails to [email protected]. I think it's the easiest way to communicate with longer texts within different time zones. Twitter also works of course, but I don’t check it every day. So due my regular work a request sometimes doesn't get the immediate attention it deserves."
He also indicated that he is from Switzerland, and that the website hosting the tool is not a registered or funded company, but is used as an anonymous name for his developments. This particular tool is:
"... currently written in Microsoft dotNet c#, Outlook AddIn uses Microsoft VSTO and back-end web service is Microsoft dotNet WebApi."
He seemed willing to follow through with publishing his code if there is enough interest, and I especially liked his comment about wanting to make a way to send money electronically that is simple enough for his grandmother to use; it's this focus and usability standard that will pave the way for greater business adoption of some of the blockchain innovations we've seen the past year.
Bithomp Scam Reporting Tool
Lately, there have been a number of new scams and dodgy businesses that have been popping up suddenly on Twitter and social media.
These scams will advertise different types of 'investment' opportunities in an effort to lure people to send them XRP. In some cases, the wallets are dynamically generated, but in others, the scammers are using specific wallet addresses associated with their enterprise.
In these cases, anybody that wishes to report a wallet that is connected to a suspicious investment scheme or obvious scam can do so by creating a report at Bithomp, the popular XRP Explorer and tools website:
In addition to creating this tool, Bithomp will use the reports to label reported wallets in their popular explorer tool, in a volunteer effort to warn others about the possible danger associated with these accounts.
If you or somebody you know wants to check up on an XRP wallet, the Bithomp Explorer is one resource you may want to use.
If you're in the market for some additional XRP swag and clothing, @DigitalNomadInv (Twitter avatar) has some new designs:
He runs a teespring market place that sells XRP t-shirts, yoga pants (pictured in the tweet), hoodies, and socks:
The following exchanges and wallets added support for XRP in the past week:
TaoTao: TaoTao is a Japanese exchange that is partially owned by Yahoo. The exchange indicated that they plan on supporting margin trading for XRP at some point in the near future. 10
Bitfi: Bitfi is a crypto wallet application that currently supports Bitcoin and Ethereum ERC-20 tokens. The project team is adding XRP "soon," according to a communication on March 25th. 11
Excitement is already starting to build for the 2020 Summer Olympics in Tokyo, and as a result, various crypto communities have sponsored their own versions of a 'passing of the torch' for their preferred crypto-asset.
In the case of XRP, a community member by the name of @ShawnSchaeffe10 (Twitter avatar) started the effort with this tweet:
Here is the idea:
- The 'torch' is actually a chunk of XRP being sent from person to person
- Each person in the relay adds 1.000001 XRP to the torch
- They then send it to somebody else and tweet about the details
If you're interested in tracking the progress of the torch, each relay participant has been asked to include the hashtag #xrptorch in their accompanying tweet. However, the hashtag system obviously has its limitations, so CryptoEri, a popular Japanese YouTuber who received the torch from me, created a list of all people that had received it since the relay's origin:
The list has now expanded to include Bob Way.
@ShawnSchaeffe10 indicated that his vision includes a point at the end of the relay where the total torch amount can be donated to a charity of the community's choosing.
The relay is a fun way to bring attention to XRP and to the Olympics at the same time, and provides a positive source of conversation between XRP fans and others that may have been curious about the effort. Kudos to @ShawnSchaeffe10 for championing the idea for the XRP Community.
Financial Inclusion Is Win-Win
If technological innovations represented by interoperable technology, micropayments, digital assets, and smart contracts can make their way to the populations that are currently left behind by traditional correspondence banking, it will result in an enormous benefit to the entire world. We are all beneficiaries of this new inclusiveness.
Financial independence and self-sustenance for billions of people will have the effect of reducing dependence on other segments of the population, in addition to vastly expanding the market for existing economies.
From a social perspective, connecting people to finnancial tools and resources such as microloans and credit, as well as the ability to store value through mobile technology in situations where individuals are remote, can have profound generational impacts. In addition to survival, there is another intangible benefit: Hope.
When people believe that they can make a better life for themselves through their own efforts, and even improve their situation, it adds a certain energy that can reverberate through other areas of society.
Supporting the technology and innovations that make this new financial inclusion a reality is something we can do both passively and actively: by choosing to own XRP and use it for payment, we are peripherally energizing the entire collection of components that can be used by developers to create pivotal applications and services. And for those developers among us, the future is a blank canvas, ready for them to paint a picture using the tools developed by Ripple, Mojaloop, Coil, XRPL Labs, Kava Labs, Forte, and others. From what we've seen in only the last year, we can deduce that many incredible financial applications are being developed as we speak.
The world has already seen examples of relatively simple mobile applications that can unlock vast reserves of value throughout the world; and if we manage to connect the world's 2.5 billion un-banked people using things like the Interledger Protocol, it can amplify these trends and provide a new, hope-filled future for our fellow global citizens.
Sources and Credits:
Cover Art: Thank you to Youssef Naddam