Determining what form the new global economy will take based on the technologies that Ripple and other XRP ecosystem participants are creating is almost impossible.
It's as difficult as predicting the shape of a large building when you're blindfolded and just reaching out to touch a cornerstone with the edge of your fingers. How tall is the building? How wide? How many people can it hold?
Such is our challenge now: we know about XRP, Interledger, Codius, and how large companies and banks are using these components to move money around the world. Extrapolating those points to surmise about how the economy will be impacted requires a person to take multiple steps into the void using their imagination.
How many smart contracts will be initiated on Codius hosts in one year? How many new derivatives will be created in 2019? While it's probably the least-built-out of the current use cases, the potential behind Codius smart contracts combined with ILP will help establish the next generation of point-of-sale device rentals - and even energy usage. WietseWind, one of the most creative minds building on XRP, managed to configure a light socket to activate if it received an ILP payment!
His experiment was a perfect metaphor - it was a light-bulb moment for those that see a potential merging of the Internet of Value (IoV) with the Internet of Things (IoT). Combining device or energy usage, or any service, really - with the dynamic capability to process a contract automatically upon receipt of payment - has the potential to transform our daily lives.
It won't happen overnight; these changes rarely do. But happen they will, as they represent innovations and efficiencies that people and businesses will use to capture hidden value.
Omni has already recognized that its early-adopter renters are a likely market for accepting payment in crypto-currency, and have already integrated a cash-out option in XRP for those that prefer it. XRP and its crypto-asset cousins retain their value no matter what country you're in, and can be exchanged for whatever currency you prefer in almost any corner of the world that has an internet connection.
Another major use case - micropayments - jumped out of the starting gate far faster than anybody had predicted: the group of Ripple ex-pats at Coil, within months of forming their new company, released a product that may eventually garner a user base in the millions.
For the moment, XRP holders are much like a blindfolded researcher, predicting the nature of a structure from its key, constituent building blocks; we may not know the exact shape of the future, but our intuition tells us that we've latched onto something that will change the world's financial landscape.
The last 2018 "Ask Me Anything" with Brad Garlinghouse is scheduled for today, Tuesday, December 18th:
I submitted my own question on December 13th, and it pertained to xRapid volume levels, which was the name of the solution that Ripple previously used to indicate settlement using a combination of fiat currency and XRP. Here is what I asked:
While it's great if he chooses to address that specific question, I think most of those in the XRP fan base will be satisfied if he gives us some sort of insight into how bank - and remittance company - adoption of using XRP for settlement is going, along with concrete predictions about future volume or level of usage.
Other questions on a variety of topics were fascinating as well: 1
- Are there any XRP ETF proposals? - @haydentiff
- Why won't the SEC answer whether XRP is a security when they have no problem weighing in on Bitcoin, Ethereum and several ICOs. - @digitalassetbuy
- Do you see Ripple hiring former CEO of SWIFT ...? - @DiepSanh
- Could you provide further details on Xpring investments? - @XrpCenter
- Do you know how much support you have out here? - @PattyB09952203
- I would like to know how (Institutional hedging) is progressing. - @tenitoshi
- How close are financial institutions (if any) to testing the XRP via ILP settlement method as described in your document as a "future release" on xCurrent. - @XRPTrump
Of course I can't squeeze all of the questions in here, and quite frankly, not all of the questions were serious, but it appeared that the main recent 'hot points' on social media were well covered.
My guess is that some of these topics are no surprise, so it will be an opportunity for Brad Garlinghouse to address some of the more popular questions from those in the XRP Community, and also to highlight items that he may be waiting to announce or discuss.
The AMA was recently rescheduled for 2:30 p.m. Pacific Standard Time (PST), and usually Ripple has a link available via Twitter, their Insights page, or directly on their YouTube channel. Will Brad Garlinghouse be wearing Ripple socks again? You'll have to tune in.
Akbank, established in 1948, is one of the largest banks in Turkey. It manages roughly $64 billion dollars' worth of assets, and has 14,000 employees worldwide. Citigroup, headquartered in New York City, owns a 20% stake in Akbank. 2
On December 14th, it was announced that Akbank was rolling out a new remittance service to transfer money from Akbank to Santander UK using Ripple technology: 3
It's not known how much volume is transferred in Akbank's specific Turkey-to-UK corridor, but the fact that they're the first bank in Turkey pioneering the use of Ripple technology to do it speaks volumes: Akbank is the most reputable bank in Turkey, according to Brand Finance - Banking 500, 2018.
Executive Vice President in charge of Direct Banking, Tolga Ulutaş, provided insight into their decision to use Ripple technology: 4
"We started to take the first seeds of this industry-leading practice last year. Now we have started to transfer money from GBP via Ripple to Santander UK with Blockchain infrastructure. With this important technology, our customers will now be able to benefit from the possibility of transferring money to international money transfers at a much lower cost. With the participation of new banks in the system, we continue our journey to expand this service through cooperation with different banks."
The exciting thing to me about this win is that it's further proof of Ripple's increasing traction in providing a real-time, much cheaper alternative to the SWIFT correspondence banking model. Ripple is in a methodical takeover of cross-border banking, and it's no wonder, given their exceptional track record.
R3 & Real Property Transactions
Since R3 announced that they'd be supporting XRP settlement out-of-the-box in their new "Corda Settler" application, there has been an increased amount of interest from the XRP Community about what this means for network liquidity.
We're already familiar with the main use case for XRP: Cross-border settlement. And with R3 including support for XRP in their Corda blockchain, the reach of XRP has extended by the size of R3's group of financial institutions, some of which overlap with Ripple.
In addition to the core use case of cross-border settlement, one area that's been receiving interest is known as "Corda Applications" or "CorDapps" for short. CorDapps are distributed applications that run on the Corda platform, and a list of these applications can be found here: CordApps
These applications all have the option of integrating their functions with the Corda network, and by definition, the Corda Settler, which is currently configured to support XRP.
Instant Property Network
One of these decentralized applications that's been getting some attention is known as the "Instant Property Network." 5
It's an innovative idea that focuses on the current inefficiencies in the process of real estate property ownership and sales. For anybody that's gone through the process of buying or selling a home, the legal complexities and the amount of paperwork can be daunting. In addition, the process itself is cumbersome, involving multiple sessions with a real-estate agent or directly between buyers and sellers.
The problem that the Instant Property Network is trying to solve, along with its proposed solution, is described thus: 6
"Problem: ... $217 trillion of assets which are slow, complex, confusing, risky and expensive to trade; even a single transaction requires the buyer, seller, multiple businesses and government departments, to exchange many emails, pdfs, documents, cash, proofs of address, ownership and identity – not once but many times among each other.
Solution: Imagine a world in which property assets could be traded domestically and even globally in days, not months, a world in which it is as easy and secure to buy property online as it is to order goods from Amazon. Instant Property Network is making this vision a reality by enabling all participants involved in the property buying and selling process to join up their systems and transact directly, reducing the time, complexity, risk and cost of buying and selling property."
The solution is ambitious, and even if the application only succeeds in garnering a small percentage of the market, the result will be massive. The international value of real estate transactions each year is astronomical - it's currently measured somewhere around $9 trillion dollars. 7
Many XRP investors were attracted to XRP for that very reason - the size of its use cases when compared to other crypto-assets listed on exchanges. And for those investors doing their due diligence, the potential size of this market caught their attention.
I agree that some of these CordApps have exciting potential; and I think that with adept management and encapsulation, R3 may be able to avoid spreading themselves too thin due to the attention that some of these spin-off activities may require.
No matter how you evaluate the probability of success for any of these applications, it's exciting to now examine them through the lens of possible usage of XRP for transaction settlement.
GMT Advanced Financial Services is an eighteen-year-old, Israeli-based remittance provider. 8 They are Israel's largest financial services company, boasting 250 national office branches. 9 The company provides a variety of money transfer services, and their official site lists their primary focal areas: 10
- International and local money transfers through two primary methods:
- Cash Pickup – Transfer of cash to the beneficiary using a secret code
- Credit Bank Account – Depositing foreign currency into a bank account worldwide
- Forex Conversion
- Prepaid credit cards
- Medical insurance for travelers and foreign workers
- And many more financial services, for Israelis and foreign workers
The World Bank indicates that the Israeli corridor is 19th worldwide, with $6 billion in annual remittance outflows to other countries. 11 This is basically one-tenth of the world leader in remittance outflows, the United States, but still very significant globally.
On December 6th, the company announced that they'd partnered with Ripple:
The company went into greater detail on their official website, stating: 12
"After a long and precise process, GMT was chosen to be Ripple’s representative in Israel, by so joining Ripple, and its partners, in creating a global financial system, with high-end technology and values such as; transparency and affordable costs.
GMT is joining companies like MoneyGram, AmericanExpress, CIBC, Earthport, AKBANK and many more, who are already authorized to use Ripple’s platform.
This partnership is establishing GMT’s place in the forefront of the Israeli Fintech industry, also allowing us to work side by side with some of the leading companies in the world."
This was another data point that indicates Ripple is joining together all corners of the globe into one, seamless banking network, and is doing it with a disciplined, purposeful international focus. The RippleNet network continues to expand, providing increasing levels of value to its participants.
@xRpTo_O is the XRP Community developer that originally created a link that supports voice-activated tipping using Siri, Apple's integrated AI. He recently updated his code:
As @xRpTo_O indicated, the update allows the user to authorize a random tip to a member of a configurable list, which currently includes charities, WietseWind's daughter Arwen, and his own address (@xRpTo_O's) to help fund development. @xRpTo_O has stated that his goal is to add more charitable causes to the list.
The XRP Tip Bot continues to make fantastic inroads into social media usage, and is a great 'ambassador application' for helping those that are new to cryptocurrency get to know some of the more enjoyable aspects of its use.
This particular update also comes at a time during the holidays here in the West, when donations to worthy causes are part-and-parcel of holiday festivities.
The mobile application is unique in that it is one of the first backed by a traditional, mainstream financial exchange, and it also contains some features that traders will probably find interesting, such as a social media trend detector, to let traders know which cryptocurrencies are being 'hotly debated' on Twitter. 15
On December 13th, the Bison team announced that they'd be starting with four cryptocurrencies, including that of XRP. 16
Will the debut of the Bison platform attract material numbers of mainstream investors that already trade other financial assets on the Börse Stuttgart? I believe that the association with a tradditional exchange will indeed lend a layer of trust and comfort for some investors; I also predict that when other traditional platforms like SBI and Ameritrade step into the space, that there will likewise be a material boost in liquidity.
2019 may be the year where we see traditional financial integration of the unwieldy cryptomarket.
The ICO ran from March 31st through April 21st of this year, and the project team has the bookings site up and running and accepting a variety of cryptocurrencies. On December 13th, the company announced that they'd be accepting XRP as well:
At first glance, I was skeptical of the potential of a token-driven approach to booking online travel resources, however, the business plan seemed to contain some obvious industry-insider knowledge and insight, as well as a description of how a new approach using decentralized finance might provide a competitive advantage. 18
It's an interesting twist on the traditional area of online travel; this is one ICO that seems to focus in on a use case for its token and its technology, but the industry that it's competing in is quite crowded; in any case, it's one more way for those that own XRP to 'spend their zerps' on retail services.
We are at the Forefront of the New Economy
In a recent interview, David Schwartz noted that the final frontier for the Internet was no longer the transfer of data, but the transfer of value.
It was the remaining challenge that had yet to be solved, and he indicated that he's looking forward to traveling that last mile, to build out the missing capabilities of the web when it comes to making real-time payments as quickly and easily as texting a friend.
The new economy that Ripple technology is helping to forge is built on concepts that have never been seen before: Decentralization, sharing, the Internet of Things, and most importantly, the Internet of Value.
When we hear financial industry experts talk about how the economy is being re-shaped by these technologies, the wise listener will recognize that there is no point of reference in the history of these concepts, but we have the ability to extrapolate from other innovations and dramatic industry changes that have taken place as a result of inherently-disruptive technology.
We can learn from these lessons.
In many cases, the eventual changes felt in an industry were not accurately predicted by so-called experts; even when evidence suggests that there are clear business reasons for innovation adoption, the skeptics will still outnumber the believers.
If you know about XRP, however, you have a substantial advantage: You must know the possibilities behind the size of the use case for cross-border value transfer. You are probably familiar with Coil, and how its use case for web monetization is primed to alter payments and content delivery. My guess is that you are at least fleetingly-familiar with the start-up called Omni and how it wants to be the 'Uber' of personal property; an example of the new sharing economy. And most likely, you understand the possibilities behind decentralized applications and contracts on Codius.
These are the cornerstones that have been laid by the most talented team in Silicon Valley. It's not important that we can't predict the future with pinpoint accuracy; we know the gargantuan changes that these innovations represent. For those of us on the periphery, we can still participate in our own way. I've chosen to participate by owning the most scalable, secure, and decentralized crypto-asset in existence at the heart of these transformative economic changes.
Sources and Credits:
Cover Art: Thank you to Adrian Schwarz