Exchange rate

[ScroogeMcDuck]

I was curious as to how the rate of exchange is determined with transactions.

Is this dependant on the current rate at the local exchanges?

I don't understand how the exchange rate is calculated presently anyway but can someone explain how Xrapid keeps this fair to both parties.

Thank-you.

[Baelish]

I can't find the video from the presentation in Tokyo(?). The one where was an Amazon and Uber logo which started a lot of speculation. In this video I seem to remember that this question was asked from the audience, and Ripple's answer was that they would provide the difference in value. As I said Im not sure what the exact answer was, but if someone has the link for this video you will have the answer.

[ScroogeMcDuck]

Thanks Lord Wee Finger.

Hopefully someone can explain it in layman's terms.

Edited January 23, 2018 by ScroogeMcDuck
Respec

[Baelish]

So I found the video after all. It was from the meetup in Seoul. Check 21:25-23:02

 

[ScroogeMcDuck]

Nope, they dodged that one.

Seriously?

[ScroogeMcDuck]

I'm only a duck so maybe I'm missing the point but if someone at ripple can't answer this simple fundamental question then I give up.

[Baelish]

Doesn't he in some way answer your question on 22:48?

[Guest]

I'm not certain but I believed the rates are merely the offers on the ledger.  So the market determines them.  Perhaps I don't understand your question but it seems simple and straightforward to me...  that bit of it anyway.  Am I missing something?

[Baelish]

12 minutes ago, Tinyaccount said:

I'm not certain but I believed the rates are merely the offers on the ledger.  So the market determines them.  Perhaps I don't understand your question but it seems simple and straightforward to me...  that bit of it anyway.  Am I missing something?

Example (with imaginary numbers)

100 XRP in XRP/KRW = $200
Sends the XRP to a bank in the US
100XRP in XRP/USD = $180

Now the bank in the US received XRP which is worth $20 less in the US.

[ScroogeMcDuck]

He said they will make up the difference but offered no explanation how that works.

 

[ScroogeMcDuck]

3 hours ago, Baelish said:

Doesn't he in some way answer your question on 22:48?

He doesn't explain how. He said that it's one of the things they are looking at doing.

 

[Guest]

9 hours ago, Baelish said:

Example (with imaginary numbers)

100 XRP in XRP/KRW = $200
Sends the XRP to a bank in the US
100XRP in XRP/USD = $180

Now the bank in the US received XRP which is worth $20 less in the US.

Ah....   thanks...   the question is about the arbitrage opportunities.  Oh ok....    got it.

The answer I believe is the 'war chest' and the Ripple Accelerator program.  They have advised that they will be incentivising real world usage with XRP from their stock.   I have no sources to quote but the impression I've gained is that they will be initially basically guaranteeing a lossless experience for the FI's that adopt first.  Indeed it seems that the earlier and bigger players will be getting a reward for usage.  Ripple website has some basic details.

Sensible thing to do until the markets themselves settle down and mature and the arbitrage opportunities are traded away.  Ultimately it's massive XRapid utilisation that will flatten out these price variations.