Each day now, it's second nature to look for multiple stories that help paint a picture of the growing capabilities for the Internet of Value. Heading into Memorial Day here in the U.S., this past week was no exception.
In this issue, I focus on some highlights that are important for you to know, especially a major announcement from Kava, a company that is using Interledger to help scale the entire cryptomarket.
On May 20th, Ripple's VP of Strategic Accounts, Pat Thelen, was elected to a new payment industry organization, formed to advance the development of the U.S. Payments Infrastructure, called the "U.S. Faster Payments Council (FPC)."
The official announcement lists Pat Thelen as an 'at-large' board member, which generally indicates that the member will have special duties as assigned by the board.
As background, the Federal Reserve's Faster Payments Task Force - which started its work in 2017 - resulted in dozens of proposals by some of the same firms that are now participants in this new industry group. At the conclusion of the task force activities, the Federal Reserve decided to stand aside and allow the market to determine which solution was considered the preferred one, with the assumption that free market forces would allow the best alternative to bubble to the top naturally.
Since then, we've seen Ripple emerge as the de facto alternative to the aging, legacy SWIFT network, providing real-time payments across the world's borders. But cross-border payments is one of many aspects of what the Federal Reserve looks at when it comes to modernization of the U.S. payments infrastructure.
The FPC is an industry group, and they've stated part of their mission on their official website: 1
"Do you want a hand in shaping the future of the nation’s payments system? The U.S. Faster Payments Council (FPC) is a new membership organization established so Americans can safely and securely pay anyone, anywhere, at any time and with near-immediate funds availability.
FPC members use private-sector approaches to address issues that inhibit adoption of faster payments, and enable end users to reach each other in ways as seamless and transparent to them as mobile texting."
The last part of that quote sounds a lot like how the Internet Of Value is described by its proponents; hopefully it means that the entire U.S. payments industry is beginning to see the benefits of real-time settlement, rather than being stuck in the archaic 'batch processing' paradigm that's caused the U.S. to fall behind many Asian countries when it comes to mobile payment technology.
It's great to see that Ripple will play an active role in shaping this new industry organization.
Brad Garlinghouse book-ended his presentation last week to a group of central bankers with an appearance on a popular podcast by Kara Swisher, who covers a wide assortment of topics in Silicon Valley. 2
The broadcast started by giving Brad Garlinghouse ample time to go over his professional pedigree, which was fascinating in itself; while I've read the textbook-style history of his resume, listening to both him and Kara Swisher tell stories from each of their 'early years' working with some early Internet companies was entertaining.
Later in the show, Brad Garlinghouse discussed the expected contemporary topics, including XRP, digital assets, correspondence banking, and some of the possibilities around how Ripple is improving payments.
Some of my favorite quotes from the one-hour podcast:
"A culture that encourages risks and tolerates failure, is, I think, a culture that will yield innovation."
"Bitcoin alone represents almost one percent of global power consumption."
"The population that is currently paying the cross-border remittance costs... are the ones that can least afford it."
"We want to change the system by working with the system."
And on the topic of technology adoption inertia from some of the top banks:
"There's a small number of oligopoly, of what we call money-center banks. They are the global banks that make money. So Citibank made about $8 billion last year from other banks ...
... Wells Fargo is not considered a tier one money-center bank ... so it turns out, ninety-nine percent of banks love what we're doing, because we're democratizing something that's controlled by a small number of banks, their competitors.
Because they have the most equity they've pre-funded around the world. Citi, Deutsche Bank, JPM, these are the big kind of money-center banks that other banks use."
I don't think I've ever heard Brad Garlinghouse talk in such an open manner about some of the challenges he faced in the early years working in Silicon Valley, including the famous 'Peanut-butter Manifesto' story. In addition, his frank discussion of what Ripple is trying to accomplish in banking was engaging as well; If you haven't heard it, I recommend giving it a 'listen.'
Amazon Web Services (AWS) is sponsoring a series of events that are centered around their various 'Loft' locations where AWS stakeholders can meetup and discuss application-related topics with various industry experts. 3
One of these 'Loft' events was recently focused on blockchain, and involved a three-person panel that included Stefan Thomas, the CEO of Coil, and Thomas McLeod, the CEO of Omni; both entrepreneurs have constructed businesses that 'run on XRP' in different ways.
The event allowed each of the attendees to introduce themselves and provide background about the company(s) that they represent, and the discussion involved several heady topics such as the inclusion of un-banked populations and transaction cost and scalability:
Tom McLeod spoke about his company's integration of blockchain technology:
"One of the big things that we believe, just in general, is that 'access' is kind of the future, right? And you've seen that in digital industries already, from your Netflix to Spotify; a lot of the old-world industries that are doing things on the internet have already started to move to a payment system via a subscription and I think the next phase - even when you're looking at that - is you can start to see this type of thing happen in physical, too.
So maybe you subscribe to clothing or you subscribe to furniture or you subscribe to all these things. It's ... you've been doing it for years. It's called renting or leasing. This has already existed, and we think over time, the better way to do that, both on digital and in physical, will be these ideas around streaming.
So ... the ability to make very small versions of it, that actually reconcile in real-time.
So, maybe you are renting a leaf-blower from Omni, from four to six on Friday from another person around the corner from you, the actual time you're using it could be streaming in the currency directly from your account to theirs, as opposed to having to rent for a (full) day for two hours."
Thomas McLeod also talked about tokenization of items, which, from his standpoint, is very much tied to rental of physical items.
Stefan Thomas linked together all three panelists by noting that each company represented was using Interledger, including Omni and Stronghold. He also touched on why he feels it's important for him to help out with Mojaloop, which is the Bill & Melinda Gates Foundation's platform for mobile payments that was built to help include (currently) un-banked populations of the world in the global economic infrastructure:
"I get a lot of questions as to why we are involved in this project. Mojaloop is a project to improve financial access in poorer countries. (It) basically makes it possible for everyone to have access to digital financial services, and the reason that's important is because it is very expensive to use cash and you don't really think about that, but you know you have the risk of getting mugged; you have the risk that someone will take it from you; you have the risk that you lose it.
So digital financial services, by removing a lot of friction to give you access to a lot of benefits and then of course, you know, anything that's online ... you can't use cash ... so you need digital financial services to invest or participate in online commerce etc...
So one of the big things holding that back today is a lack of interoperability.
By creating interoperability, you ... create a certain competition and you open up the market and you reduce costs for merchants who no longer have to have multiple phones to support the multiple different payment options. And ... that's where the basic idea of Mojaloop comes from."
He went on to explain that blockchain technologies make it feasible financially to accomplish the objectives of inclusion, because the use cases involved may be too costly for banks and other providers to offer if done through legacy technology.
Thomas McLeod provided his frank commentary on how companies have tried to use buzzwords to raise money, and how he feels that Omni did not go down that path, but instead chose very specific use cases for integration and use of digital assets and tokenization. The concept of 'real utility and problem-solving' using blockchain tech is starting to replace irrational exuberance in the cryptomarket, at least at the level of company investment.
One of the ideas that seems to have caught on recently - and has been talked about by the leading visionaries at Ripple, Coil, and Omni, is the idea of how real-time, streaming payments could usher in entire new business models and applications that will be difficult to predict. Stefan Thomas offered his take on the topic:
"... the idea that rather than ... paying my rent monthly and getting my salary monthly where I then ... get into liquidity issues if my rent gets charged a few days before my paycheck comes in ... or I have to carefully budget so I don't spend too much and then come ... rent day, I don't have enough money left ... I think some of those could be solved by having those things sort of trickle in across the month so your paycheck just comes in every five minutes - or whatever - and your balance slowly goes up.
And your rent comes out every five minutes, and so anything in your account is pretty much yours to spend and you don't have to think about your budgeting over time anymore.
Is that a useful use case? I don't know. If you think it is, you should start a company ...
A lot of things fall into that category ... when you lower the friction; when you lower the cost of an individual transaction, by three, four, five orders of magnitude, you see the volume of transactions explode."
He then noted that now, even though we're not actually using our mobile devices, millions of messages are being transmitted across the Internet, due to the fact that the cost of these transmissions has approached near-zero. He then stated that the same might be true of payments at some point; that they won't be something that we consciously think about any longer.
The theme for the session was futuristic, but also centered on the interoperability that ILP provides, and how it facilitates the goals of all three of the companies represented on the panel. If you're interested in any three of these companies or their potential use cases, this video is a must-watch.
AMA Session with Stefan Thomas
'AMA' stands for 'Ask Me Anything,' and occasionally, high-profile members of XRP's championing organizations conduct them to interface with community stakeholders in a direct and open fashion.
On May 23rd, Stefan Thomas announced that he'd be participating in an AMA session on May 30th:
Some AMA sessions have been live-stream interviews, and some AMA sessions have taken the form of Quora responses, with a certain amount of time set aside by participants to answer written questions. In this case, Stefan Thomas decided to use a subreddit known as 'r/IAmA,' which houses a huge diversity of fascinating AMAs by people in a variety of careers.
The subreddit has a whopping 19 million subscribers, placing it well above even the most popular crypto subreddits.
It was an insightful decision to post the AMA on this subreddit.
Thus far, Stefan Thomas tweeted about some basic questions that he might consider as part of the session:
In addition to these, Reddit allows people to submit questions real-time, so I expect that many of us might be peppering him with a list of questions on May 30th. No doubt many of them will pertain to the recent unveiling of the Coil content platform that goes along with its free web monetization tools.
While we all knew that Kava was expanding scaling technology for digital assets, it was not clear what their next major accomplishment would entail. But on May 23rd, the company made an announcement about a new service they're offering, whereby users can access liquidity to swap crypto from one crypto account to another:
The service is called 'Switch,' and Kava is describing it as 'non-custodial,' since users do not 'send' them the actual cryptocurrency; the entire platform is simply a way to use Interledger to stream payments from one crypto network to another.
The tweet led to a blog where they attempt to keep the complexity orderly if not high-level, and then link the reader to successively more challenging technical topics that describe the blockchain technology they're using to make their service work.
Kava indicated that the service is considered a 'beta' release.
"Switch sidesteps the problems of traditional DEXs by employing a novel solution: streaming micropayments, which work by moving little bits of value piece-by-piece until an entire payment or trade is complete.
Streaming micropayments enable lightning-fast swaps, interoperability across blockchains, and complete self-custody of assets.
Load funds onto 'cards,' swap between them, and withdraw at your leisure. Only you have access to these funds, even while trading!"
The graphic associated with this quote showed an intuitive concept; a user transferring value from one of their private wallets, represented by a 'card,' to another of their private wallets, represented by a different card.
The team gets around custody of the crypto by utilizing the Interledger network to transfer value in very small amounts, until an entire payment has been sent from one network to another via ILP 'connectors.'
The fascinating thing is that they are starting out small (trades up to $20), and they indicate that the service will 'settle' the transaction, even though it uses off-chain processing. They can make this claim because it's up to the connector operators to configure their settings correctly, to reflect the amount of risk and liquidity that they are willing to accept and provide.
Kincaid O'Neil was careful to remind the first adopters that it is 'beta' software, with all of the expected pitfalls that go along with that label:
"While we hope it’s all smooth streaming, as this is beta-quality software, issues may arise. We’re rapidly iterating to make Switch more reliable, feature-complete, and secure. If you encounter any bugs or unexpected behavior, we’d encourage you to submit an issue!
And for the latest updates from Kava, follow us on Twitter ~ we’d love to hear about your experience with Switch!"
My initial reaction was a guttural 'wow!" as I didn't expect this much progress so quickly from Kava's amazing team; but they obviously have been busy, and not just with one off-chain processing solution. They've integrated three of them with Interledger!
Kudos to the team at Kava, and I hope that Switch paves the way for amazing new financial services and ideas. And congratulations to all Interledger stakeholders, as this development is truly an amazing leap forward for the entire family of ILP technology tools and capabilities.
XRP Arcade has an enormous breadth and depth of content about the XRP ecosystem of business stakeholders, exchanges, and tools. If you're looking for comprehensive information about wallets, events, XRP markets, and a chronological listing of all the latest news affecting XRP, the site has a page that covers it.
On May 21st, Leonidas Hadjiloizou announced that he'd added a new tab to his fan site, titled 'Infographics,' which displays some fascinating statistics, lists, and charts about XRP price behavior, the RippleNet ecosystem of participants, as well as a cross-section of information about Ripple banking clients and money transfer companies:
If you haven't already taken a look at XRP Arcade, please do so; it's a great resource for those looking to learn more about XRP and the businesses that champion its use.
If you've been on Twitter recently, you may have noticed a new fan account titled @PaywithXRP. The account represents more than one person, and the small team has put together a site where businesses can voluntarily register that they 'accept' XRP as payment:
It's a convenient tool, and it allows businesses to list themselves in a central location, thereby advertising to the XRP Community as one.
And of course, those of us in the XRP Community will most likely do our part to use the services of businesses that support XRP; it's one small way that we can help extend the growth of businesses that are open to the use of digital assets.
Here is the link to that central listing: https://paywithxrp.io/
Keep Up To Date on XRP
Like XRP's real-time settlement speed, the news cycle in crypto moves fast; with each passing day we're seeing more amazing progress in the materialization of the Internet of Value.