The Internet of Value is much more than a slick marketing slogan. It requires an enormous amount of seemingly-insurmountable work. It includes transforming the current components of the Internet that have evolved haphazardly over the years into a standards-based architecture where developers can easily build the next generation of value-aware applications.
Since the company’s founding in 2012, Ripple has been at the leading edge of this effort, taking on the bulk of responsibility for carefully re-designing the plumbing that underpins correspondence banking, along with standardization of ledger-to-ledger communications using consistent Internet protocols.
It’s taken years, but now the foundation for the next phase of progress has been laid, and its logical structure should simplify and accelerate international commerce - and the velocity of money - as it flows as fast as light travels through a fiber-optic cable.
Is it any coincidence that the same company – Ripple – has championed the use of XRP? No. There is very little randomness in what Ripple does, and they’ve indicated that XRP is the most ideally-suited digital asset for transferring value across borders. In anticipation for a world of micropayments, they’ve updated the XRP Ledger with native Payment Channel capabilities that know no upper boundary of speed.
So how does all of this fit together? I’ll get to that in a bit.
General Crypto News
The new Archax exchange based in the UK caught my attention recently. Reading some of their own descriptions of where they see their exchange service fitting into the ecosystem, I quickly realized that they have a clear vision of what they want to accomplish. 1 Here’s the statement that promises to set this UK-based exchange apart from the rest, if they can successfully develop and deploy support for high-volume digital assets: 2
“Existing crypto trading venues have primarily targeted early adopters and the retail space. The traditional institutional investment community has not been catered for, as this new mostly unregulated and emerging world lacks the systems, controls and processes that they expect for themselves or require for their clients. This space has recently been experiencing rapid growth and institutions now have the appetite to get involved, as well as significant funds at their disposal.”
It’s a heady description of a simple concept: An on-ramp for traditional investors.
I’ve talked about the lack of involvement in the crypto market by traditional investment houses and traders in the past; for various reasons, many of them were viewing the action from the sidelines, attempting to get their bearings before carefully dipping their toes into digital assets. If exchanges like Archax are now being created with the exclusive goal of assisting these traditional investors with expanding their portfolio to include cryptocurrency choices, it’s a sign that the crypto market is now quite possibly entering a new phase; mainstream acceptance.
Line is a Japanese subsidiary of the South Korean internet search company Naver Corporation. Its messaging software allows users to make calls and message other Line users internationally; it’s a large company with over 1,400 employees, and its application is used in 230 countries globally. 3
And now Line has indicated that they plan on opening a Japanese-based crypto exchange. 4
The exchange will be a crypto-to-crypto exchange only, meaning that they will not handle any sort of fiat conversions; their exchange will not be an on-ramp or exit-ramp for fiat conversions, but is planned to support 30 different digital assets. 5 The company has not publicly released the full list of supported cryptocurrencies, but we’ll have to keep our eye on it; Line is a popular messaging application with a myriad of global users. Just for reference, the application currently boasts 70 million Japanese users alone.
Line’s new exchange could significantly boost overall global crypto market liquidity by easing entry into the crypto markets for their existing customer base.
Andreessen Horowitz Hires First Female Partner
Techcrunch recently covered the hiring of Andreessen Horowitz’s first female partner.
Andreessen Horowitz is a venture captial firm that was started by two visionary angel investors who first made their fortunes investing in some notable tech start-ups such as Twitter. 6 Since then, they merged and formed their famed Andreessen Horowitz fund, and currently it ranks as the number one venture captial firm. 7 Other partners included Silicon Valley visionaries such as Jeff Jordan, the founder of OpenTable, and Vijay Pande, a multi-field scientist in biomedical and computer science that pioneered using distributed computing for disease research. 8
Andreessen Horowitz indicated that Katie Haun would be co-leading their crypto fund along with Chris Dixon, founder of SiteAdvisor and Hunch. 9
Katie Haun’s background – and her new role within the venture capital firm – is noteworthy, because she comes from a regulatory enforcement background: She was a federal prosecutor with the US DOJ for ten years, and she was the lead on both the Mt. Gox and Silk Road investigations, both of which were successful. She’s also on the board of Coinbase.
Crunchbase ended up asking Chris Dixon a variety of questions about the fund, and here is my favorite: 10
TechCrunch: What about conflicts? It’s very early days, so I wonder if the rules around backing similar companies are different. In traditional VC, obviously, it’s pretty much verboten.
Chris Dixon: The norm in the crypto world is different than the traditional venture world. Typically in VC, you won’t invest in a direct competitor. But with crypto, there’s a different ethos. It’s more cooperative. People would rather grow the pie together rather than fight over the size of the pie. We always make sure that projects are okay with any investments that we’re considering that might be overlapping. But in emerging spaces, it’s hard to think about categories as it’s kind of fluid. I’d say standards are evolving, but I’d also say it’s okay to (back more than one currency, for example).
This outlook by one of the co-leads of Andreessen Horowitz’s crypto fund is something for XRP owners to keep in mind as we learn about how many various, and sometimes-competing projects, that the venture capitalists are involved with. In addition, sometimes when you track a firm's investments, you can discover interesting connections and financial interests that may yield some powerful clues about future direction.
Case in point: Polysign.
This tweet from David Schwartz, Ripple’s Chief Cryptographer, may have caught your eye recently: 11
The link he provides connects to the PolySign Twitter account, which indicates that the account was recently created. Following the trail of clues then leads to further information about Polysign: In a Quorra session from May 22nd of this year, a user asked David Schwartz the question: 12
Question: “Who are the people who created XRP, and where are they now?”
And the answer from David Schwartz?
Answer: “XRP was created by Chris Larsen, Jed McCaleb, and Arthur Britto. Chris Larsen is Executive Chairman at Ripple. Arthur Britto is a founder of Polysign, a startup in stealth mode. Jed McCaleb is a founder of Stellar.“
This gives us a little more information. Polysign’s LinkedIn account is more clear. Here is the company’s public-facing content in that platform: 13
“PolySign is a Bay Area startup which develops software solutions for institutional digital asset custody. PolySign was founded in 2017 by a team of experts in both financial services and cryptocurrencies. On the business side, our CEO Jack McDonald was formerly CEO of Conifer Financial Services, a top-tier global financial services firm.
On the technical side, our team includes Arthur Britto (co-founder of Ripple) and David Schwartz (Chief Cryptographer of Ripple). Ripple, creator of the XRP cryptocurrency (a top three digital asset), is an industry leader working with financial institutions around the world.”
So now it’s becoming much more clear than when I first blogged about Polysign on March 28th, when we first started seeing job postings. 14 It’s evident now that Polysign is most likely part of the ‘custody solution’ that Miguel Vias hinted at in the Quarter 4 XRP Markets Report for 2017: 15
“In Q1, we’ll begin work towards the launch of institutional hedging instruments and custody solutions. Both of these market components are important to institutional adoption and thus are important components of our 2018 roadmap.”
Now that we know that David Schwartz is involved personally with the project, and given its ambitious goals, I am anticipating an incredible game-changing application or storage mechanism for digital assets, and specifically XRP. There’s a number of XRP wallets available currently, but I’m guessing that Polysign’s creation will go beyond the usual wallet storage functionality.
Disrupt San Francisco 2018
One of the biggest annual fintech conferences is the one sponsored by TechCrunch in San Francisco each year. This year, the speaker list is something for the ages, and it includes both Brad Garlinghouse, the CEO of Ripple, and Ashton Kutcher, a noted celebrity proponent of Ripple’s charitable work.
The speaker list also includes Michael Arrington, who is a limited partner with Andreessen Horowitz, and the founder of the Arrington XRP Capital investment fund 16, a cryptocurrency investment fund that is entirely denominated in XRP. 17
The complete speaker list is a who’s who of blockchain and fintech, and includes:
Kotak Mahindra Bank
On June 27th, Ripple announced a significant banking win. 31 While a myriad of banks have been signing onto RippleNet and xCurrent, this one was chosen to be profiled in one of Ripple's Insight articles. It's significant given India's massive bank customer market, and because of its status as the world's leading remittance country - even bigger than China. 32
To date, this makes at least three major Indian banks - that we know of - that have joined RippleNet to process cross-border payments using xCurrent: Axis Bank, IndusInd, and now Kotak Mahindra. Ripple is clearly attempting to link all of the world's top remittance-processing countires using RippleNet and xCurrent; this is exciting due to the fact that xCurrent allows banks to immediately acheive a high level of savings, and usage of XRP for sourcing liquidity should eventually allow these same banks to acheive even more profitability.
Payments Handler API
Championing new web standards is tough work. Even if it’s a proposal that makes sense and would benefit a multitude of end-users, there are many entrenched financial interests that are a part of the World Wide Web Consortium (W3C) that must weigh in on the idea.
Browsers – and their conformance to international standards – is an elective process, but one in which most participants willingly comply to provide a competitively positive browsing experience for users. Users can choose to take their business elsewhere – whether it’s Microsoft’s Edge, Mozilla’s Firefox, Google’s Chrome, or Apple’s Safari. There are others as well, but those major players control most of the market here in the West.
For a number of years now, Adrian Hope-Bailie has been working with the W3C to achieve a standard for web payments.
The goal is to allow an end-user to ‘hook up’ a payment method with their browser, and then have the browser conform to the encryption requirements contained in the web payments standard. The most simple version of this concept is the following diagram:
So how does this affect XRP? The image representing the “Native Payment App” can be a cryptocurrency wallet! In fact, it can be any platform-specific API. The browser negotiates a secure tunnel to the wallet application you’ve already configured within your browser.
The standard has reached a level of maturity where Google has already scheduled it for release in Chrome version 68, the next major browser version. 19 A video was released that shows how the user experience might look with the new Payment Handler integrated within a browser:
Is this all that needs to be done for Coil to build micropayment applications that integrate automatically within browsers? No. Stefan Thomas indicated that a new standard must be developed for this next step, and he’s calling it “Web Monetization.” 20 Web Monetization is: 21
“...a proposed browser API that uses ILP micropayments to monetize a site.”
Even though there is still more work to be done before Coil has achieved its goals, the agreement between all parties on the Payment Handler API is a step in the right direction.
Yoshitaka Kitao is the CEO of SBI Holdings. On June 25th at the Japan Blockchain Conference in Tokyo, he spoke about XRP, Ripple, and what he believes the future portends. According to one attendee, @sentosumosaba (Twitter handle), she said that Mr. Kitao indicated: 22
“He believes Ripple will be the global standard.”
“using XRP can create a more efficient world.”
These are dramatic quotes offered at a high-profile conference, and they can be paired up with more detailed comments from Mr Kitao in a recent Forbes article: 23
"We want to take blockchain beyond financial,"Yoshitaka Kitao said. "There's a lot of speculative demand around cryptocurrencies, which is why the price is going up so quickly, but people need to think about how these technologies are being used in real life and how they can improve people's businesses."
This pragmatic statement about real utility is what sets XRP apart from the others; while Bitcoin struggles with shrinking retail reach, XRP is looking into the future with massive use cases involving banks, remittance companies, and Internet Companies such as Coil and Omni. The remarks from SBI’s CEO reinforce the notion that XRP’s future volume sources will look much different – and much larger – than they currently reflect.
SBI Current Management Information Briefing
On June 28th, SBI published a report that detailed recent business progress on several high-profile areas that intersect with the XRP ecosystem.
The question frequently pops up on social media: “When is SBI Virtual Currencies going to open its doors to the public?” And it appears that the report answers that question by displaying the VC Trade Road Map, with a reference to the month of July. “VC Trade” is what SBI Virtual Currencies is calling the new service:
Now we know that the general opening of SBI VC is going to occur sometime in July of this year, and it's the first of July as of the publishing date of this blog! Even more exciting is SBI’s estimate of the size of the customer base when VC Trade opens its doors:
“At the launch of full-scale services, expecting customer inflow from the SBI Group’s customer base of 23.47 million, specifically, SBI Securities with approx. 4.26 million accounts, SBI Sumishin Net Bank with approx. 3.21 million accounts, and SBI Liquidity Market, including SBI FXTRADE, with approx. 1.05 million accounts”
That’s an estimated 8.5 million customers that potentially could flow direclty from SBI”s current customer rolls, not counting the new customers that will join the exchange. An exchange of this size promises to add significant volume the the XRP ecosystem.
XRP Ecosystem News
In my most recent blogs, I’ve been covering the exciting news about Codius, the XRP-complimentary smart contract platform. In those pieces, I explained that Codius hosts have a potential to make money based on hosting Codius decentralized applications and smart contracts. Since Stefan Thomas launched Coil, there has been a sudden surge in interest in Codius hosting, and recently a tweet was sent by @CodiusHosts (Twitter handle) that shows how large the network has become already: 24
Even since that tweet, there has been an increase in the number of active hosts, which now stands at 234: 25
This much interest – hundreds of new Codius hosts in a matter of thirty days – may portend the creation of new decentralized applications and / or smart contracts in the XRP ecosystem; I can’t wait to see what some developers have created and published. Here are a couple of tweets from new Codius hosts:
If you are a developer and wish to participate in Codius, there are a number of resources for you to consider. I listed off a number of resources in my blog that specifically covers this platform:
In it, I cover a variety of sources to look at, including a step-by-step guide published by Stefan Thomas himself for setting up a Codius host, as well as a link to both the Codius Sub-Reddit and the Codius Gitter forum. These sources will give you what you need to get started. There is also a handy video that an XRP Community member posted on YouTube that you can access:
He created an installer script that will coordinate a Codius installation for you; so far it has been well-received by others that have tested it. 27
Credit-card-sized Ripple Validator
The Raspberry Pi is a series of small, credit-card sized electronic boards that allow their owners to customize and use them for a variety of creative purposes. 28 Just as a quick example, some computer programmers and tinkerers have put these Raspberry Pis to use to: 29
- Make a working R2-D2
- Make a homemade smartphone
- Make a ‘smart mirror’ that displays time, temperature and news headlines
- Make a digital picture frame
There are literally dozens of other examples, but you get the picture.
It just so happens that one member of the XRP community decided that it was time to create a Raspberry Pi Ripple Validator.
He was able to make a board that worked, but it wasn't using a Raspberry - he was eventually forced to use a different miniature board called a "Pine:" 30
If you’re interested in learning more about the steps or process he went through to accomplish this feat, you’ll have to read more about it on his blog, and perhaps follow up with him personally; from his description of the journey he embarked on to overcome the associated challenges, it may not be as simple as he made it look. If you want to learn more, or just to see his cool 3-D printed case for the small validator, you’ll have to read more on his blog: Cointrek's blog
New PHP Library for Rippled
PHP is still used in many sites, and it has a rich history of being the programming language for many sites that eventually transformed into viral Internet applications; at its beginning stages, Facebook was a PHP website.
The developer - @mikemilano on Twitter – is asking for help in testing his library. If you prefer Reddit, he’s also posted a thread there to document any feedback: Reddit Post about Rippled PHP Library
With his valuable contribution, there is no doubt that new PHP applications will be springing up that positively impact the XRP ecosystem.
WietseWind's Tip Bot - For Any Wordpress Site
An XRP Community member recently shared how he managed to create a PHP script for WordPress integration of @WietseWind's XRP Tip Bot application:
For those with independent Wordpress blogs, it's a simple way to allow readers to tip using XRP. Kudos to @mraburn on his script; it will be interesting to see how many Wordpress sites end up with an XRP 'tip jar' at the end of their blogs.
The Building Blocks are Taking Shape
How do all of the building blocks fit together?
We’re starting to see the patterns as the picture becomes more clear. ILP was needed for Codius, XRP’s smart contract platform, to work in a way that exhibited maximum flexibility with no speed or settlement constraints. Just like ILP, it is not bound by the limitations of a specific ledger, and can scale horizontally to handle massive throughput of transactions.
ILP laid the groundwork for Codius.
Ripple knew what ILP would do for its replacement of SWIFT, and they acted fast, quickly building out well-organized solutions that used ILP as the communication mechanism between banks.
And now, with between 100 and 200 international banks – and two central banks – already signed on as customers, the picture is clear that this strategy was the right approach at the right time. To smooth the way for banks to transition to using a digital asset, Arthur Britto founded Polysign to create a custody solution.
Now consider micropayments. The native support for Payment Channels was added a little over a year ago, before we knew about Omni, and before Stefan Thomas left to found his new company, Coil. This is no coincidence. And of course, most recently we see the approval of the Payment Handler API for use in browsers, which will make direct-to-crypto-wallet integration a reality for those browsing the web.
I wonder which cryptocurrency will be able to support payment in the currency of the vendor’s choice most easily? Well, you can see where I’m going. And this is all just the start. Remember that Coil is working on the next part of the plan: The creation of a new Internet, where content can be paid for with micropayments from a web browser. With every news article about the building of the Internet of Value, I have to remind myself that progress takes time; luckily for XRP owners, the best companies in Silicon Valley are leading the way.
Sources & Credits:
Cover Art by Trae Gould