Ripple’s CEO Brad Garlinghouse appeared in an interview on June 21st, 2018 with CB Insights to talk more on the future of FinTech and further discuss his company, Ripple, in detail.
This year, XRP price has ranged from about 50 cents to 4 dollars which communicates high volatility. Brad’s theory on volatility risk of cryptocurrencies, especially in case of XRP is intriguing and very well formulated. He believes that there is a lot of misconception in the market; mainly the one that says cryptocurrencies can never solve payment problems at scale due to volatility.
Brad argues with a succinct explanation:
“So I can enable an XRP transaction in 3 seconds and so I have to take the volatility risk of XRP for 3 seconds. Or I can use a fiat and use wire transfer, and I’ll say through Swift, and that usually is about 3 days. 3 days is 270,000 seconds. So it’s almost a 100,000 times longer than an XRP transaction. The way you calculate volatility is volatility times time so if you reduce the time by a dramatic amount, even if the volatility is a lot higher you actually have less volatility risk through an XRP than you do in fiat transaction through Swift.”
Another intriguing point is that people could use Bitcoin instead of xRapid. To this, Brad says that Ripple has thought of building such product where Bitcoin could be used to utilize its liquidity; the issue is that a Bitcoin transaction today takes about 1.5 hours, which boils down to that much duration of volatility risk against the 3 seconds that xRapid takes.
Therefore, xRapid is uniquely positioned to solve the cross-border payment problem.
During the talk, the CEO also wipes any doubts about the difference between Ripple and XRP; he claims that people conflate the two and says:
“Ripple is different than XRP. We use XRP as we build tech solutions on top of it. The primary product that we use today is xRapid… if we have a bilateral relationship and I’ve pre funded dollars and I have lets say pesos, then we can settle it using a product called xCurrent. That’s fiat to fiat.”
At the time of writing, XRP is trading at $0.51 with a market cap of over $20 billion. In the past 24 hours, XRP price has changed by -4.44% with a volume of over $212 million.
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Ripple’s initiative invests in Bolt Labs to improve secondary payment channels and expand interoperability
Ripple’s arm, Xpring which invests and incubates in companies and individuals which help improve the XRP ecosystem, invested in Bolt Labs. With the new investment, Xpring hopes to develop solutions that will help improve the security of secondary payment channels and increase the interoperability by integrating with the ILP.
Bolt is a private, off-chain scaling solution which was built on top of Z-cash, a privacy-focused cryptocurrency, has attracted more than a few well-known investors in the crypto-space and Ripple’s Xpring is one among them. In a blog, Bolt Labs said that their solution will focus not only on ZCash but also other publicly available cryptocurrencies that do not have inherent on-chain privacy features.
It also stated:
“The potential for these implementations to be networked together with technologies like Interledger opens the potential further for cross-chain interactions with these privacy guarantees baked in.”
The above statement suggests that they might have a “potential” implementation for these on Interledger Protocol [ILP]. ILP was created at Ripple developed by the Interledger W3C Community Group. ILP aims at connecting two different blockchains, to integrate two different ledgers and have seamless operations between them.
This would vastly benefit the payments industry, which is facing a revolution at the hands of a nascent technology like blockchain. Ripple, a payments provider, which is leveraging cryptocurrency and blockchain to facilitate faster payments, would benefit largely from this partnership. In addition, this could also signify a potential development on the XRP Ledger and its on-chain/off-chain privacy and the currency, XRP.
A Twitter user @XRPCentre tweeted:
“If the solutions being developed by the company are able to improve the privacy of the ILP transactions, they would also be enhancing the privacy of XRP/ILP payments, which is a very demanded feature…. It’s all about interoperability and destroying network effects. If ILP succeeds in being the best protocol for cross-protocol/ledger transactions, you’d naturally search for the best asset therein.”
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