Search the Community
Showing results for tags 'bridge currency'.
Found 4 results
Minimum search term is 4 characters long. Can't find what you want? Click here for the custom google search instead.
There was a brilliant explanation on Twitter about how to use XRP as a bridge currency. All he says just works already and can be used for so many amazing things. Anybody thinking this will not lead to anything should just go home. The bottom line is that transactions are atomic and nobody needs to know about XRP or even hold it when wanting to bridge as long as the market provides the necessary liquidity. To me personally this shows how superior XRPL is. See the tweet and the following. Spread the word folks.
In the paper, "Building Network Effects on Ripple", found here https://ripple.com/files/ripple_vision.pdf, they give an example of a liquidity provider having to quote up to 28 currency pairs on page 5, first image attached. I think I understand what's going on there, though maybe I'm being nit-picky and can't count but shouldn't it be 30 pairs? But regardless on page 6, they show how by using XRP as a bridge currency (second image attached), the liquidity provider can accomplish the same thing by only quoting 8 pairs. I've been trying to figure this out but, what are those 8 pairs they are referring to that can bridge all six different currencies in the example?
For newbies, "Forex" stands for "foreign exchange." It includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of trading volume, it is by far the largest market in the world. Pair Up Since currencies are always traded in pairs, the foreign exchange market does not set a currency's absolute value but rather determines its relative value by setting the market price of one currency if paid for with another. Ex: 1 USD is worth X CAD, or CHF, or JPY, etc.. Liquidity is Important On a global basis, to support a massive amount of foreign exchange trading of curreny, the exchanges can process very large volumes against set rates within a range. Liquidity in the exchanges helps support these large volume transfers of currency back and forth. The RCL is no different: it needs liquidity in specific currency pairs to support forex trading of those currencies. Large volumes is the goal. Do We Contribute to Forex and XRP Liquidity? Absolutely. Traders of currency pairs form the core of Forex liquidity. The Triennial Central Bank Survey includes the trading activity for currency pairs by dealers and institutions - institutions that would be considered equivalent to today's Gatehub or Poloniex. How Big is Forex? According to the Bank for International Settlements, the preliminary global results from the 2016 Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Markets Activity show that trading in foreign exchange markets averaged $5.1 trillion per day in April 2016. Did you catch that? 5.1 TRILLION PER DAY. Leading from the Front The RCL enables Forex traders to use XRP as a bridge currency with no counter-party risk, and it also will work with ILP, enabling other bank ledgers to connect directly. This ability for the RCL to use ILP to connect with any other ledger using ILP was a huge sea change in the use cases for RCL. Ripple is at the threshold of establishing the RCL as one of the most valuable Forex back-end network tools for connecting foreign currency trades, and if even a small piece of that gargantuan pie is traded on RCL, it will start to create a ripple effect as more and more trading is completed in under 5 seconds across borders. Using a crypto-currency digital asset for this purpose promises new opportunities for Forex trading, it's derivatives, and opens potentially new markets within Forex. Do you own XRP? You really should, because Ripple is just getting started. https://en.wikipedia.org/wiki/Foreign_exchange_market http://www.bis.org/publ/rpfx13fx.pdf http://www.babypips.com/school/preschool/what-is-forex/market-size-and-liquidity.html
There's an unfortunate myth going around about Ripple. Many people see Ripple as offering a competitor to Etherium, Bitcoin, et al., in the marketplace of cryptocurrency. Some see it as an attempt by the big banks to hijack the cryptocurrency movement. Others see it as a junk coin that hurts the community by striking a deal with the devil. They're all wrong. I'd like to offer a controversial claim for consideration: Ripple is going to be the best thing to happen to Bitcoin, Etherium, and all the other alt-coins since their inception. In my first draft, I originally typed that last sentence as "Ripple is going to be the best thing to happen to crypto since Satoshi Nakamoto", but then I realized that phrase failed to convey what I am trying to say here. I'm not merely saying that Ripple will be good for cryptocurrency in general. (Although, let me be clear, I think that is the case as well). I'm saying that all coins on the market -- be they Bitcoin and Etherium, on one end, or coins like Digibyte, Golem, Sia, and Doge on the other -- stand to greatly benefit from Ripple in general and XRP in particular. How? Stated simply, XRP's ability to act as a bridge currency can help give all the currencies greater liquidity -- not just fiat currency. Lets offer a hypothetical example. I have a small pile of Doge I've been holding onto since sometime back in 2014 (a close friend of mine is a hardcore Dogecoin enthusiast). Lets say I want to spend that Doge. At present, almost no one has any interest in accepting Doge as payment. Now imagine I find a site that is selling nifty coffee mugs, but they only accept Bytecoin as payment. I don't have any Bytecoin. What can I do? Well, eventually, I may be able to buy that coffee mug with with Doge, with XRP serving as the bridge currency between Doge and BCN. Stop and think about that for a moment. Rarely-traded currency pairs suddenly become more-easily exchangable. No longer would I necessarily have to go to the Mos Eisley Cantin- *I MEAN* - to Poloniex to trade my Doge in to Bitcoin and then my Bitcoin into Bytecoin. Every coin in the cryptocurrency market stands to benefit from this. Now, what are the larger implications here? First, this potentially opens the door for a great leveling. At present, Bitcoin mostly holds a hegemony over online purchases with crypto. Why? Establishing an ecosystem for a coin -- a community with both buyers and sellers of goods and services -- is hard to do, and Bitcoin got there first. Think of it like trying to open a second shopping mall in town. The sellers want to be where the customers are, and the customers are at the established mall. The customers want to be where the stores are... and the stores are at the established mall. If you open that mall and only have two storefronts out of 80 filled in the beginning, well... it's going to be hard to lure in customers, which means its going to be that much harder to lure in more vendors. Similarly, if not a lot of vendors accept your coin of choice, it's hard to get more users to treat that coin as anything other than an asset to buy and sell on the exchanges -- essentially a garbage coin to pump and dump, regardless of the actual merits of your coin's design. If, however, a bridge currency allows holders of that coin to freely purchase goods priced in Dollars or Yen or Etheium or Doge, the relative advantage of the established ecosystem is diminished. How does this lead to a leveling? Well, that means bitcoin can no longer rely on the "we got here first and cornered the market" approach to ensure it remains king of the mountain. Newer coins with better features will no longer be locked out of the market just because they were later to arrive on the scene. If you don't have to worry as much about spendability, you can pay greater attention to the other features of any given coin. Put simply: XRP's bridge function diminishes the advantage of having the greatest number of native vendors, thus leveling the playing field for competition from newer coins. Now, before I go any further, I can here some of you saying "but wait! You said at the beginning that all the coins will benefit, but now it sounds like you're saying Bitcoin will get dethroned!" Not so fast. Not only will the bridge function and the interoperability built into the system allow people holding Bitcoin to buy items priced in SiaCoin and Doge, but it could also allow holders of Dollars, Yen, RMB, and Euros to buy items priced in Bitcoin with greater ease. So while Bitcoin's percentage of the pie might shrink somewhat, XRP will help increase the size of the pie as a whole. Ask yourself: would you rather hold 50% of $10? Or 10% of $1,000? --- In the past, I've alluded to some of my reservations about investing in a currency that is in bed with the big banks, without going into details about how I've managed to resolve that ethical question for myself. This, I hope, sheds some light onto why I am all-in on XRP. Too often, the question is framed as a false dichotomy, wherein you're either for XRP and the big banks, or you're for other coins and anonymity. The choice is a false one, based on misunderstandings about what XRP is and what it can do. To my mind, I see no better way to spur widespread adoption of cryptocurrency -- of all stripes -- than by making it easier to spend. Empty your pockets right now, and set the contents on the table in front of you. I'm no Madam Cleo, but I'd be willing to bet you didn't set any gold bullion on that table. Why is that? It's a better store of value than dollars, euro's or yen. It doesn't rust, it won't ruin if you accidentally run in through the washing machine, and it has all sorts of nifty industrial uses besides. So why don't you have any in your pockets right now? Simple: despite the merits of precious metals, odds are, none of the grocery stores, gas stations, or strip clubs* in your area accept gold bullion as payment. Few people want to lug around coins they can't easily exchange for goods and services. If, on the other hand, it was easily spendable everywhere from your local indie book store to Starbucks™, more people would use it. The same is true for cryptocurrency. While spendability is emphatically not the only attribute users care about, it is a big one. And XRP can help with that. I realize I'm not the first to point this out: I've seen various aspects of this discussed in a number of different places -- including on these forums. And yet, for some reason, again and again I see newcomers and outsiders (and even the occasional older hand) treat the cryptocurrency market as a zero-sum game, wherein one coin's gain is another's loss. I wish more of our detractors understood this: Ripple's growth doesn't necessarily threaten Bitcoin and Etherium, any more than PayPal threatened the Dollar or the Euro -- if anything, it helped people spend more of them. We all have a chance for a win-win here. There's still room for the Bitcoin and Etherium enthusiasts on the Zerp Train. We just have to get out there and win some hearts and minds. So lets get out there and do it. *pro-tip: "making it rain" on a stripper doesn't work very well with gold bullion.