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8 minutes ago, JoelKatz said:

I expect the role of IOUs on RCL to reduce over time. This assumes that there exist robust ILP exchanges that are at least as good as RCL's internal order book and pathfinding.

"I expect the role of IOUs on RCL to reduce over time" Doesn't that inherently mean reducing the role of XRP? or do you see XRP directly be traded to those other ILP exchanges?

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Just now, kanaas said:

"I expect the role of IOUs on RCL to reduce over time" Doesn't that inherently mean reducing the role of XRP? or do you see XRP directly be traded to those other ILP exchanges?

It will reduce the role of XRP in bridging RCL IOUs. RCL's role would shift more to grounding XRP. XRP"s role would shift more to bridging ILP transactions. If XRP is going to be the perfect bridge currency, then RCL will have to be the perfect ledger to ground a bridge currency. That's why you're seeing features like multisign and SusPay.

I don't see us removing RCL's order books, custom currency, or community credit features any time soon. But I do expect the role they play to shrink.

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42 minutes ago, JoelKatz said:

In the order you asked:

This is kind of like asking why music download services will succeed if musicians prefer to sell CDs. Ultimately, it won't matter what they prefer. Those who insist on options that cost more will lose market share to those who don't. The primary advantage of XRP over some kind of fiat is that it's jurisdiction neutral -- it doesn't require you to enter into an arrangement with one particular counterparty.

This is a cruciale point: why on ILP using XRP as bridge should be less expensive than using USD of a private ledger? I see the same costs. Or even lower risks in using USD associated to volatility for MMs (that transates into a cost).

About XRP neutral I agree but I don't know if that is and advantage or not when operating with banks.

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6 minutes ago, tulo said:

This is a cruciale point: why on ILP using XRP as bridge should be less expensive than using USD of a private ledger? I see the same costs. Or even lower risks in using USD associated to volatility for MMs (that transates into a cost).

About XRP neutral I agree but I don't know if that is and advantage or not when operating with banks.

What about irreversibility?

Another point is that USD requires an issuer, so for USD to work as a global bridge, there should be a common issuer for everyone (the Fed issuing directly in a ILP-enabled very accessible ledger). Otherwise there would be a lot of USD<>USD markets, and this fragmentation would increase friction and costs.

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Also a global counterparty-free bridging unit needs to be 24/7, 365. Private ledgers can't easily do this, there are associated costs, and speed/regulatory concerns. With XRP you at least always know what to expect; you don't need to rely on one issuer for uptime and that their private ledger won't freeze up for some reason e.g. in escrow.

Also thinking aloud here, but with XRP wouldn't you get the best pathfinding connection? E.g. right now, think abut autobridging. I asked the Ripple guys when it was announced whether it would be possible to use an IOU-only path. It would be, if I remember correctly them saying, but it's presumably an exponentially greater number of combinations/variables in doing so (and thus probably laggier), than in simply looking up XRP first, and finding connecting paths out from there. Well, wouldn't ILP function similarly? Except instead of looking at RCL books, you're "scanning" out via XRP across Interledger connections to find a suitable path. Which XRP will be ground-up perfectly designed to do.

Might be way off there...

Edited by rippledigital

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19 hours ago, tulo said:

This is a cruciale point: why on ILP using XRP as bridge should be less expensive than using USD of a private ledger? I see the same costs. Or even lower risks in using USD associated to volatility for MMs (that transates into a cost).

About XRP neutral I agree but I don't know if that is and advantage or not when operating with banks.

There are banks in India, China, Australia, and so on. If you use USD on a private ledger, it has to be someone's ledger and that someone has to have policies.

I'm sure there will be digital fiat that will be used as a vehicle currency. But I also think XRP can stake out a huge territory, particularly in a sort of "Goldilocks zone". For the very largest assets, the largest market makers in the world will use multi-billion dollar institutions to make very tight spreads. And the very smallest assets won't particularly matter. But there will be a huge middle zone of assets too small to invest billions in but too big to ignore where liquidity can be made effective and cheap through XRP. There can be many such assets for each currency.

Ultimately, it will come down to where the spreads are lower.

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The Ripple team has exceeded my expectations so many times over the past couple years that I am content to not try and micro-manage. It is a very well though out plan that is unfolding as it should. 

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Is it possible for Ripple to issue another new currency and route payments through it with the same level of efficiency as via XRP?

How much XRP is hard-coded into RCL?

Sorry, if the above already was answered before...

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2 hours ago, Duke67 said:

Is it possible for Ripple to issue another new currency and route payments through it with the same level of efficiency as via XRP?

How much XRP is hard-coded into RCL?

Sorry, if the above already was answered before...

Currently no. Some features work only with XRP or treat XRP in a special way (autobridging, suspended payments).

 

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13 hours ago, Duke67 said:

Is it possible for Ripple to issue another new currency and route payments through it with the same level of efficiency as via XRP?

How much XRP is hard-coded into RCL?

Sorry, if the above already was answered before...

Currently, the ILP features in RCL only work with XRP. Unfortunately, there are some complications to adding this kind of support for counterparty currencies, but if there's demand, we could certainly do it. I can't imagine any circumstances in which we would want to try to launch some other currency though.

The genesis ledger contained 100 billion XRP. A tiny bit of that has been destroyed, but about 99.997 billion XRP is left.

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On 8/20/2016 at 2:21 AM, JoelKatz said:

XRP"s role would shift more to bridging ILP transactions

How exactly does that process work, I envisioned MMs or FIs to use IOUs on RCL and XRP would bridge between them, but if MMs only hold XRP what relation does that have to external order books, private ledgers, or exchanges? I'm picturing private ledger 1 --> connector --> private ledger 2, pl1 sends USD to pl2 via connector, how and where is XRP used, or does it require a more complex path and different currency pairs? And obviously orders are held and coordinated on ripple order book and external market maker order books simultaneously.

 

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16 minutes ago, rippleric said:

How exactly does that process work, I envisioned MMs or FIs to use IOUs on RCL and XRP would bridge between them, but if MMs only hold XRP what relation does that have to external order books, private ledgers, or exchanges? I'm picturing private ledger 1 --> connector --> private ledger 2, pl1 sends USD to pl2 via connector, how and where is XRP used, or does it require a more complex path and different currency pairs? And obviously orders are held and coordinated on ripple order book and external market maker order books simultaneously.

 

See page 9 in this doc.

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Short answer: The source currency flows from the source to one connector who, in exchange, sends XRP to another connector. That connector, in exchange for the XRP, sends the destination currency to the recipient. The two connectors can be the same connector, in which case XRP ownership is just transferred from one trader/customer of that connector to another.

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