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KarmaCoverage

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Everything posted by KarmaCoverage

  1. KarmaCoverage

    XRPL Genesis

    I've had it open in a tab for a few days, played with it a little bit, but haven't gotten fully up to speed on how to use the tool. I need to get to where I can ask/frame up questions/queries before I could do anything. Are you familiar with wolfram language? https://reference.wolfram.com/language/#GraphsAndNetworks you can build computational logic there, then deploy via API to apps.
  2. KarmaCoverage

    Happy Valentine's Day from JP Morgan

    No Commercial bank or Stablecoin will ever be able to maintain a "first mover advantage" over Central Bank issued CBDC. There is a difference between... "money in the bank", aka bank liabilities... and "cash in hand", aka Central Bank liabilities. Going digital or crypto or blockchain, will not change the underlying facts about which balance sheet / ledger that things are accounted for on. Unless I'm on JPM's investment committee, I see nothing to worry about here. They may simply burn up some capital to learn something, so others wont have to pay to learn that lesson.
  3. I try to help 😀 Lots of this stuff is just continiously marching in the same direction. Honestly, it was all my work on real estate that helped me understand a Rippled ledger's capabilities faster. I needed that as an accounting tool, but couldn't find it... Gave up... then a few years later, BAM! Rippled/XRPLedger
  4. Someone helping the UK land registry plan an event last year (or the year before) around an October called me to see if I wanted to participate in their conference. He said that they already realized they need to get real property titles on a DLT, but didnt really know how to work all that out. So, I spoke to the guy for a bit and explained some, then he offered to have me sit on the main panel... but he wanted me to pay for everything which was not feasible. I've been thinking about reengineering the real estate market since 2004-5, and before that I started learning all the real estate trades carpentry, plumbing, electric, tile, appliance repair, brokerage, mortgages, secondary mortgage markets RMBS financial models, yada yada. There are a lot of moving parts to be connected into one big network of legal/financial/physical nodes in a very particular way. It will happen, faster or slower is the variable. I'm rusty now, but I used to know all the main real estate software players. Met with Trulia executives, told them they were licked by Zillow, because Richard Barton had already funded Nextdoor (which was sort of like one of my projects, but not really). Trulia sold out to Zillow less than a year later. Also met with Yahoo's chief engineer for real estate on that trip. They were #2 in online real estate at the time, and met with SmartZip's CEO The landscape has sort of changed, but also not really. Blockchain, and smart contracts will fuel a whole new wave of fundamental innovation. Edit: I see this article is from last October, so thank you for sharing. Maybe it is the same folks.
  5. KarmaCoverage

    XRPL Genesis

    I cant wait till we have ledger exploration tools that can look through the full ledger and transaction flow history. @Silkjaer has been working on the approach which should best enable an analysis of flows through the network over time.
  6. KarmaCoverage

    dotcom bubble

    It was not until 2001 that the equity markets transitioned to a decimal system. Reducing the market maker's minimum spread denomination from 1/8th of a dollar ($0.125) per transaction, down to $0.01 penny per transaction. As spreads tightened, "cost volume profit" dynamics began to apply, and we saw the digital discount brokerage business model come about. I would guess that there are some market dynamics that existed in 1999 that exist in crypto today, but coupled with some that did not. It's going to be a new show, but with familiar characters.
  7. @moncho nice write up. Real estate is a lifelong topic of interest for me, and you hit on one of the things that I think will be biggest drivers of disruption and changing the game in real estate with the very low cost of 3d printing homes, which I have been casually following. Also regarding the 3rd world and Real Estate, there is already a lot of folks looking at the Real Estate title process and putting that on Blockchain. I was just reading the Florida Blockchain Working Group's goals, and explicitly mentioned is... Florida's real estate market has particular drivers that are not exactly present in other markets, including a big international, and out of state influences. I know that R3 has looked at trying to address the mortgage registration system. A mortgage is a derivative, so the underlying asset of a mortgage is the real property rights and deeds. There are several groups, the first among them that I saw was Factom, and I'm now also aware of https://twitter.com/InstantPropNet and have heard of a couple others but I forget their name. I think Factom made an early mistake by trying to use the bitcoin ledger tech, when the whole time a Rippled ledger could do everything they needed, if only you thought about IOUs from the proper perspective. Regarding the other key drivers that I see poking the real property markets globally are 3d printing dropping the cost to build precipitously, which would break the back of the existing real property brokerage business model, which only earns 6%... well 6% of a $500k is ok, but 6% of $50k land included starts to beg for the brokerage industry to start looking at a new revenue mode. The cost of document stamps and other transaction fees are super high for real property transactions, and a big part of that is the government level records keeping/updating, title insurance (which is facing an extensional threat), mortgage origination and retirement, and total transaction settlement. All these things should become exponentially improved. Additionally I have it worked out and the software built for the pricing mechanism to enable 2 sided market for investors in real estate could be made with a crowdsourced price. This would enable a whole new class of real estate investors who can only afford to invest under $5000, but would also like to invest at the individual property level. It would open up a new revenue model to replace the transaction revenue basis for the real property brokerage business model, and give those guy some more predictable income and stability. A lot of these folks lost everything after the crash, that shouldn't have been necessary. The whole point of building such a system is to reduce systemic levels of Liquidity Risk (not wholly unlike Ripple's solution for the international Nostro liquidity problem) which is a risk I believe blockchains as an accounting tool to be uniquely able to address. It would also the creation of new types markets to be built for various types of real estate based derivatives. This is getting too long, but I could go on. Suffice to say, real estate markets after 2030 will look nothing structurally like it does today. I see both headwinds from improved market efficiency, and tailwinds from dropping costs.
  8. KarmaCoverage

    Florida Blockchain Working Group

    https://www.flsenate.gov/Session/Bill/2019/735/?Tab=BillText
  9. Remember the faster inventory turnover cycles that the RippleNet system makes possible. This means you can serve up the same about of liquidity flows, with a smaller inventory of capital/float.
  10. KarmaCoverage

    ILP, eli5

    A "direct" relationship would be a 1st degree connection. DLT introduces a new 2nd degree connection between banks. The CB has a monopoly on the 2nd degree bank-to-bank connection, and I expect that to continue within domestic economies. XRPLedger is being made available as an alternative 2nd degree connection between banks for international flows.
  11. KarmaCoverage

    Stablecoins and Banks

    Its "financial innovation", but just like rampant margin did, it could set up a 1929 style situation for the digital asset markets. I guess it strikes me like Auger "the prediction market", which is just binary options. And XRPLedger which is essentially a clearinghouse for settlement. A lot of new ideas are old ones taking a new form, decentralized.
  12. KarmaCoverage

    Stablecoins and Banks

    The creation of the stable coin = borrowing The value of the stable coin, is credit based upon the digital asset underlying Unless I misunderstood it, it sounded a lot like the stable coin was essentially a margin loan setup.
  13. KarmaCoverage

    Stablecoins and Banks

    https://a16z.com/2018/12/20/stablecoins-why-matter-what-how-daos-maker/ Essentially they allow a user to deposit 100 digital assets, and borrow 30-40% of that value denominated in fiat. If the value of the digital asset drops, either the user needs to deposit more digital assets, or pay the loan down so that is is back under the 30-40% limit. This is managed by a smart contract, so when the market drops the business logic will auto execute and (assuming the user does not take the above actions) the smart contract will begin to sell the digital.asset at the market price, until the 30-40% limit is achieved. I used to take these calls for Fidelity, more than once the system was wrong and my role was to be the human in the process who could short circuit the system liquidating the user's account, if necessary... otherwise we would sell everything to cover the margin loan, then sell the kid's college savings, and one guy lost his house. It's not a joke when you are facing a margin call, and it never happens on a "good market day".
  14. KarmaCoverage

    Stablecoins and Banks

    You need to look at the financial setup on how these "stable coins" math is set up. It is essentially a margin loan in fiat, with a digital asset as the underlying. The setup is coded in smart contracts, which will auto execute per market conditions. There is fiat credit being created, but via business methods that more resembles Margin rather than an auto/credit card type of loan from a bank. I think this is a result from the Narrow Bank / Exchange business model being 100% collaterallized, and due to the methods necessary to create credit on the basis of a digital asset differing from fractional reserve methods.
  15. KarmaCoverage

    Stablecoins and Banks

    The enforcement of stable coin margin calls is coded into smart contracts. I believe mostly on Ethereum, hence "digital immutable contracts". There is no way to short circuit a cascade of margins calls and collateral liquidation, so far as I can tell.
  16. KarmaCoverage

    ILP, eli5

    I think of an ILP Connector much like the old role of a Specialist on the floor of the NYSE, and also as a Dealer as described by Mehrling here. I also think most of the "connectors" will be using both fractional reserve commercial bank ledgers and narrow bank exchange ledgers and digital asset ledgers. Depending on the nature of each ledger they can fund their position by either a deposit or loan from the bank, a deposit or margin at the exchange, or simply a deposit on a digital asset ledger. Say Sender Bank A > Exchange A > XRPLedger > BTC ledger > Fiat stable coin > Receiver cash ... Each > is a Connector, or a Dealer with value held on both ledgers before and after their hop. When funding and settling in these positions on each ledger, the Connector/Dealer can use a commercial bank loan (credit), or non-credit Central Bank cash (ILP works with paper cash also). Either way the Dealer is hitting the ledgers that fall under the jurisdiction of the CB and Banking regulators of that jurisdiction. In the process, each connector along the path actually sends the value to the next connector, and then waits for a Fulfillment packet to collect the value the previous connector sent to them. This is where Universal mode vs Atomic mode gets important.... In Universal mode the value is sent forward, while in Atomic mode if the end to end transaction (the full path) does not execute, then none of the hops will execute. RippleNet I believe is run in Atomic mode (not sure who runs the Notary service, Ripple?), while the IoV is run in Universal mode which is much more open, but has some more risk exposure for a Connector. This may also help with the process flow. https://interledger.org/rfcs/0032-peering-clearing-settlement/ I typically think of ILP Connectors operating using accounts at a Narrow Bank, aka an Exchange and without Margin. So their positions on all ledgers are fully collateralized. There is obviously room for a Connector/Dealer to borrow collateral, but for simplicity sake I usually think of everything being 100% fully collateralized first, like a Narrow Bank.
  17. KarmaCoverage

    Stablecoins and Banks

    When it creates new fiat, backed by an underlying digital asset. This is an expansion of the fiat money supply (fiat being the 2nd, non-digital ledger). When this fiat is spent it moves over to commercial bank ledgers, or to paper cash on Central Bank ledgers. This is similar to how Commercial banks create new money supply, but the underlying asset is Reserves on the Central bank's balance sheet, instead of a DLT/blockchain ledger.
  18. KarmaCoverage

    Stablecoins and Banks

    Is serves as a connection between ledgers, much like an ILP Connector, but with a different business/financial model. The connection aspect is going to exacerbate a market downturn in the underlaying, it may also to a lesser degree amplify a market upturn. The "benefit" is for folks who want to transact on a fiat ledger or "in fiat", but do so based upon value denominated in crypto. They could also be used as a partial hedge.
  19. KarmaCoverage

    ILP, eli5

    The closest thing to that, is the video I made. The one that mostly describes a domestic economy settlement process in a world with CBDC, at the end I show how an international payment using CBDC and XRPLedger would work. I think the CB balance sheet is not involved in an ILP payment path. At most it is indirectly, because the commercial bank should be tied to it's Central Bank.
  20. KarmaCoverage

    ILP, eli5

    I can find a more detailed link later Basically ILP Connectors are the ones provisioning liquidity on 2+ ledgers (fiat or digital doesn't matter). When the Connector recievs a Prepare packet they set aside some liquidity... on credit There is a risk of loss of this liquidity which the Connector has set aside to fund the prepare packet. Both risk they will lose that capital (chance of loss), and that they may not lose their capital but will not succeed in collecting the spread for the payment (opportunity cost).
  21. KarmaCoverage

    ILP, eli5

    @Wandering_Dog Yeah I think/guess RippleNet uses ILP which uses payment channels on each exchange/bank's xCurrent ledger. So RippleNet is basically a souped up version of the IoV with the nodes (ledger operators) have additionally agreed to governance and legal contracts they have to sign to join the Ripple network. This thread may help with understanding ILP. It was only wrapped up 1 year ago.
  22. KarmaCoverage

    ILP, eli5

    I can draw a picture later, but while on mobile. To go from one xCurrent bank to another through both RippleNet (FX exchange) and XTPLedger... 1. Debit Bank ledger client account > credit Segregated account (this is the connection to the bank's private "xCurrent ledger", or Rippled) 2. Debit Segregated account > credit xCurrent ledger (onboarding the value to RippleNet) 3. Debit xCurrent ledger value > credit Exchange... sell fiat for xrp 4. On XRPLedger... exchange A sends XRP to exchange B 5, 6, 7... reverse steps 3, 2, 1 Without CBDC the Central bank's balance sheet is not party to the transaction. Only domestic interbank settlement would flow through it's balance sheet, which would cut out steps 2-6, and replace them with methods you know well. Just realized I left out the use of payment channel receipts which in reality would probably be used on step 4, rather than doing an on ledger transaction. This enables the 2 exchanges to do some clearing for a while and settle up on XRPLedger whenever the net positive exchange wants to cash in their paychan receipt
  23. KarmaCoverage

    Xrp 20's xrp 50's and xrp100's

    Money doesn't exist either... yet most people will look me straight in they eye and say, "look at this paper, this is real money". Crypto is not much different in that regard. Money and digital assets, are both just value accounted for on a ledger. It's kind of like trying to describe how two things, both of which are not well understood, can be combined to make an even better less understandable great thing.
  24. KarmaCoverage

    Stablecoins and Banks

    If you are asking questions like this you may want to just call Ripple directly. https://ripple.com/ripplenet/join-the-network/ 1. When a bank buys xCurrent and joins RippleNet, they keep their existing private ledger in place and spin up their own private Rippled ledger, a private "xCurrent ledger". The connection between the legacy ledger and their private xCurrent ledger is made by using a "Segregated Account" which is basically an account on the legacy ledger that is debited when value is credited to the xCurrent ledger. (you may debit a client account > credit Segregated Account ... then debit SA & credit xCurrent ledger) * I may be slightly off on some detail, as I have never seen the actual xCurrent software nor read the rule book for RippleNet, so I'm reading between the lines and guessing. I am guessing it works this way because ILP uses Payment Channels and I dont think that is a feature included with the legacy ledger tech solution. 2. You can download it all for free https://github.com/interledgerjs + https://github.com/ripple/rippled + some bank/"gateway" software https://github.com/stevenzeiler/gatewayd
  25. KarmaCoverage

    Stablecoins and Banks

    You also cant have a "stablecoin" without an underlying "base currency", which to date have been digital assets living on a blockchain. Remember Banks expand the supply of Fiat when they make a loan. Then they earn interest on the new money they created via the loan. That is how the fractional reserve business model works, and it is difficult to accomplish that with a DLT with a fixed supply.
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